Hooked on Oil

Published September 13 2005
The Daily Targum

I have little doubt that everybody who drives a car is woefully aware that gas prices in the United States, a meager $1.86 a gallon just a year ago, have jumped over a dollar since then to around $3 a gallon today. I don’t drive a car, fortunately for the environment and not so fortunately for me in the middle of highway-clad New Jersey suburbia. But I’ve been assaulted left and right, nevertheless, by cries and sighs of indignation over the phenomenal price of oil these days.

Hurricane Katrina’s devastation of the US Gulf Coast explains the recent hike in prices – more than 83 percent of gas production and 95 percent of oil production in that region has been shut down over the past week because of the damage to oil rigs and refineries, according to the BBC.

The BBC reports that about 30 percent of the country's entire crude oil output - is out of commission.

The price of oil per barrel broke records, rising to around $70 a barrel on August 30^th this year, just after the hurricane. This is the highest price of oil ever recorded, but still falls short of the oil crisis of the late 1970’s, where, adjusted for inflation, the black gold was selling for about $90 a barrel. So cheer up, things have been worse.

Oil prices are already slowing falling, partially because various oil producing countries have offered to provide the US with oil to buffer the shortage caused by the hurricane’s impact.

The International Energy Association, for example, has offered to release 2 million barrels of petrol a day (the amount Kuwait puts out) to the US. Consisting of 26 countries including France, Germany, Japan and the UK, the IEA holds a combined stockpile of 4 billion barrels of oil, 1.4 billion of which are available to these governments for emergency use.

While this buffer supply is yet to arrive in the US, the American government is already using its own Strategic Petroleum Reserve stocks to counter a sharp rise in gas prices, according to the BBC.

Prices fluctuate, however, not only with actual rises and falls in oil availability, but with speculation on disaster and how much damage will arise. This explains why the price of oil leapt from about $66.86 (set on August 12 on the New York Mercantile Exchange) to $70 before demand for oil outstripped the interrupted supply from the Gulf Coast.

The price of crude oil has been steadily rising for other reasons, since far before Hurricane Katrina struck refineries on the Gulf Coast.

Upsets in oil supply from major oil-producing nations such as Niger (undergoing internal political strife), Iraq (undergoing an externally induced chaotic cataclysm and recently a rebellious sabotage of the power grid) and Venezuela (where strikes interrupted oil export) also contributed to the edging up of oil prices.

If that’s not enough of a complication of the usual media-pulverized, mushy public-feed that oil prices are up plainly because Katrina struck, here’s another one: an overall rise in demand for oil has driven up prices in recent years because the supply of oil is restricted (both by what the poor earth has left in her tired loins as well as by oil producing cartels like OPEC).

China, the new oversized kid on the block, consumed about 6.7 million barrels of oil per day last year, 3.2 million of which came from imports. Its consumption is speculated by the various bespectacled cogitating oil gurus to increase as its economy expands.

The US and Europe have also increased demand over the last few years, putting more of a strain on oil supply.

While North America contributes about 4.8 percent to global oil production at just over 14 million barrels a day, oil greedy America boasts the highest consumption in the world and has to import an addition 11 million barrels a day to support its needs.

The fact of the matter is that this precious commodity that keeps the United States on its knees before Saudi Arabia and Kuwait while it kicks Iraq and Iran in the pants for Islamic fundamentalism (bred largely in Saudi-funded madrasas) is a slippery fish that will never leave us with our bellies (or rather, our gas tanks) full. So why do we so desperately cling to it? What on earth do we use all this oil for?

Perhaps the national obsession with Sports Utility Vehicles (SUV’s), Hummers and other generally colossal, compulsively oil-guzzling American-made cars has something to do with it.

One online news source (yes, the BBC again, sorry) tries to convince us that sales of the SUV, “the nation’s top selling car,” are “sluggish with a disappointing 4.1% increase for the year.” That’s a sluggish increase, by the way. Hummer sales, however, declined by 21 percent, and the Hybrid, a more environmentally-friendly car that combines petrol and electric power, is basking in the sun of celebrity endorsements by the likes of Cameron Diaz and Leo Di Caprio. American registrations for Hybrids rose over 25 percent last year, apparently, to nearly 44,000. That number may seem impressive on its own (even then, not really), but when compared to just one car company’s - Toyota’s - 675,809 American light-truck sales (SUVs, vans and pickups) last year, the number of Hybrids on the road in the U.S today is, in fact, insignificant.

Decades of environmental activism, warnings from international conservation groups, and even oil companies like Shell and Chevron, that the current levels of fuel consumption are ruining the environment and exhausting a non-renewable natural resource, haven’t curbed our consumption of oil. Maybe the only thing that will is astronomical gas prices. If this is the case, I say hitch up the price a few more dollars, OPEC!

There are viable alternatives to driving huge cars back and forth across the vast smoggy expanses of America. Bicycles (two-wheeled, non-fuel-consuming and human-powered machines) are one great way to traverse short distances and jettison those two pounds you’ve been trying to lose since the 90’s. Walking is another.

If exercise isn’t your thing, other alternatives such as trains (NJTransit is offering FREE trips to and from New York all this week), busses and car-pooling in regular or hybrid cars do exist.

Gas prices may descend eventually, but in the meanwhile, I suggest taking this opportunity to leave the car in the garage and explore the world of the bipedal!