The Oil and the Glory
The Weekly Wrap — March 30, 2012
Energy Independence Edition How do you know you are living in a petro-state? With all the talk of a historic U.S. oil boom, I wondered how Americans can truly know whether and when they are again residing in an official petro-state, like in the days of John D. Rockefeller. Given the invective-laced presidential election, I ...
Energy Independence Edition
How do you know you are living in a petro-state? With all the talk of a historic U.S. oil boom, I wondered how Americans can truly know whether and when they are again residing in an official petro-state, like in the days of John D. Rockefeller. Given the invective-laced presidential election, I wondered whether we might see either Barack Obama or Mitt Romney, shirtless, hunting a tiger while hurling curses at one another. Then I turned to a few regular O&G readers. Here is a smattering of their responses:
**"Hollywood celebrities attach Texas longhorn bull horns to the hoods of their cars. ExxonMobil acquires Saudi Aramco. The American Petroleum Institute buys out the Center for American Progress, Sierra Club and the Natural Resources Defense Council."
John Hofmeister, author and ex-president of Shell USA
**"Barack Obama discovers ancient urns while inspecting oil spill damage on the Gulf Coast."
Michael Levi, Council on Foreign Relations
**"Secessionist movement breaks out in North Dakota."
Ed Chow, Center for Strategic and International Studies
**"Americans see buying an electric vehicle as unpatriotic, vilify companies that make them as government stooges, and proudly fly the flag from the top of their new 16 mile-per-gallon SUVs."
Andrew Holland, American Security Project
**"When did the US *stop* being a petro-state?"
David Biello, Scientific American magazine
Go to the Jump for the rest of the Wrap.
Dogs and energy independence: According to the perspicacious Sherlock Holmes, the most curious clue sometimes is when the dog does not bark. We may have witnessed such a moment in the U.S. Senate yesterday, when some of America’s key oil industry analysts testified before the Committee on Energy and Natural Resources. Against the giddy hyperbole to which we have been subjected in recent months, none of their opening remarks included the phrase "U.S. energy independence," the political goal referred to in the previous item. (Industry consultant Daniel Yergin did make a stab at re-tooling the phrase to press the reverse conclusion: "All this does not add up to energy independence for North America, but it does add up to ‘energy less-dependence.’") As a taste of what the experts did say, Frank Verrastro, director of energy at the Center for Strategic and International Studies, concluded that the U.S. can hope to "substantially reduce … oil imports, achieving a significant reduction in our balance of payments." Why the outbreak of circumspection? Perhaps that itself is the most meaningful message.
The art of talking independent: When the world of oil seems intent on going seriously haywire, a time-honored option is to try to talk it off of the ledge. So we are witnessing from our leaders. French Prime Minister Francois Fillon said his country, plus the U.K. and the U.S., are on the verge of flooding the market with volumes from their strategic petroleum reserves. There is talk of Japan and South Korea joining them. But a stern Saudi Energy Minister Ali Naimi went the furthest. High oil prices are bad, bad, bad, he wrote in a scolding bylined piece in the Financial Times — "bad for Europe, bad for the U.S., bad for emerging economies and bad for the world’s poorest nations," not to mention "bad for all oil-producing nations, including Saudi Arabia, and … for the energy industry more widely." Saudi Arabia is prepared to do everything it can to bring an end to all this badness, Naimi suggested. Traders responded to this nervous chatter the last two days by selling their oil positions, and taking some profit built up in the oil-price runup. Oil prices dropped. If history is any teacher, they will be back at the tables tomorrow. Nothing anyone said eliminated the biggest contributor to high prices — destabilization over the Western-led confrontation with Iran.