The Blood of Victory.

Cotton may be the “fabric of our lives,” but oil makes everything run.

How much oil are we using? More and more each year: 60 million barrels a day in 1985, 84 million barrels a day in 2009; probably 114 million barrels a day in 2035. Oil use will probably accelerate as “developing nations” (Chinas, India), well, develop.

One problem is that there is a finite amount of oil in the earth. But how much is that? No one knows for sure. The current estimate is 1.2 trillion barrels. This is pretty hazy, actually. There may be lots more oil than people previously thought. Still, even “bullish” estimates suggest that we may have enough oil—produced at a rising cost—to provide oil for twenty or thirty or even forty years. So I’ll probably be dead before it runs out, but most people on the earth today will not. In the meantime, world demand for oil drives the exploration for new oil reserves into new areas.  As one oil company spokesman put it, “this is where nature put the oil.  You want to find oil, you have to go where it is.”

Some of the oil exploration sites are in extremely challenging environments.  There are undersea deposits in the Atlantic Ocean off the coast of Brazil, in the Arctic Ocean, and off the coasts of the United States. The American sites are problematic. People first started drilling for oil off-shore in the Gulf of Mexico in about 1950.  Success in the Gulf led to oil exploration elsewhere.  However, in 1969 there occurred a disastrous oil-rig blow-out in the Santa Barbara Channel in California.  The reaction put a stop to off-shore drilling wherever the oil industry was not already powerful.  Both the East Coast and the West Coast were soon out of bounds.  In contrast, Texas and Louisiana were already in the thrall of the oil industry.  Off-shore oil drilling became concentrated in the Gulf: there are about 4,000 oil rigs operating there now.

Since 2005 there has been a tremendous growth in the number of off-shore oil rigs world-wide.  There are about 2,500 off-shore oil and natural gas rigs around the world outside the Gulf of Mexico.  The number of the foreign off-shore rigs will expand.  Brazil claims a recently-discovered under-sea field 200 miles out in the Atlantic.  The oil deposits are estimated at 15 billion barrels.  Tapping into these fields would raise Brazil to the ranks of Canada and Nigeria among oil-producers.  For a rapidly developing economy with all sorts of needs and aspirations, this chance is too good for Brazil to pass up.  There are serious technical difficulties because the oil is four miles down.  The example of British Petroleum’s “Deepwater Horizon,” which blew up and blew out in Spring 2010, sends shivers down the spines of environmentalists.

Environmentalists go crazy over the risks. The “Deepwater Horizon” blow-out, and the resulting spill, gave them a lot of ammunition. How are you going to contain an oil spill four miles down if you couldn’t contain one a mile down? How are you going to contain a spill in the stormy Atlantic Ocean if you couldn’t control one in the comparatively tranquil Gulf of Mexico? Alternative oil sources don’t look much better. The Canadians have been extracting oil from “tar sands” in Alberta and the US is extracting oil from shale rock in the Western states. Getting oil out of tar sands requires six barrels of water for every barrel of oil produced. Water is nearly as scarce as is oil.

What to do? Well, if you’re running an oil company, you look in places that have weak environmental regulations and a corrupt government. “Nigeria is for drillers” bumper-stickers should start popping up all over the place. Ecuador, Peru, and Costa Guano should also start to figure in oil company reports.

See: “The search for oil,” The Week, 17 December 2010, p. 15; “Oil rigs: cities at sea,” The Week, 21 May 2010, p. 13.

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