EDITOR:It was inevitable.
The price of gasoline rises and you'll see something similar to what I saw the other day, a bumper sticker proclaiming: "Drill Here - Drill Now - Pay Less".
Once again, fellow citizens, I must be the bearer of bad news.
There's no such thing as a free lunch.
The check isn't in the mail.
Bad things happen to good people.
And - I hate to break it to you - Exxon doesn't love you.
Nope, there's no new miraculous source of oil, there's no big price drop on the horizon, there's no panacea. The cost may zig and the cost may zag, but the general direction is always the same - up.
Before I proceed, a word on the sources of the following facts and figures. Those sources are: the Associated Press (AP), Petroleum Insights, Bloomberg, Canadian Oil Sands (a Canadian corporation), and several U.S. governmental entities: the Energy Information Administration (EIA), the Department of the Interior, the United States Geological Survey (USGS), and the Central Intelligence Agency (CIA), which compiles an amazing amount of multifaceted data.
The United States is number 13 in known petroleum reserves, with 20.7 billion barrels. That is about 1.4 percent of the world's total. In 2011 we produced 2.86 billion barrels and used 6.87 billion. We use one and a half times as much as the European Union, twice as much as China, four times as much as Japan. We import 1/3 less oil than we did in 2005, and since 2008, we have increased production by 20 percent.
Now here's a fun fact. Last year, for the first time since 1949, the U.S. was a net exporter of gasoline, diesel, and jet fuel.
The Gulf coast refineries figured out they could make more money by selling to Mexico than to the Midwest, so bye bye (or perhaps I should say adios) gasoline.
Lets deal with a couple of popular there's-plenty-of-oil fantasies.
First, the Bakken formation, located in the Plains states.
The mean estimate for the total recoverable oil in the formation is 3.65 billion barrels, somewhat more than half an average year's consumption. It's embedded in shale. Shale is a rock. The method of recovering it is "fracking," exploding a charge which fractures the rock, and then pumping out the accumulated oil.
Second, the Canadian oil sands.
This oil source, which constitutes 97 percent of Canada's oil resources, consists of deposits of bitumen, "hard as a hockey puck" according to our Canadian friends. It must be heated, or boiled, or baked to become liquid. Twenty percent of it comes from open pit mines (think of U.P. iron mines on a gigantic scale). The remaining 80 percent is extracted by injecting steam into the ground and separating and pumping out the resulting oil and water.
If the processes described above sound difficult and time consuming and expensive, it's because they are. The easily discovered, easily recovered oil is gone.
For the sake of argument, suppose some loaves and fishes miracle occurs and we're able to double our production. It still wouldn't be enough to fulfill our needs. It wouldn't reduce the price you pay at the pump by any appreciable amount. All OPEC would have to do would be to cut back on the quanity they put out on the worldwide market.
It's the worldwide price of oil that determines how much you shell out. You won't get any break from the oil companies, no homefield advantage.
Because Exxon doesn't love you.
Time for the closing quote, this time from a fact expert.
Dr. Watson - "A proposition which I took the liberty of doubting."
Sherlock Holmes - "You did, Doctor, but none the less you must come round to my view, for otherwise I shall keep on piling fact upon fact on you until your reason breaks down under them and acknowledges me to be right." - Sir Arthur Conan Doyle, "The Red-Headed League" (1891)