There’s only so much oil in the ground

Justin asked, “If the countries of the Middle East can change the price of oil by how much they produce, then why can’t the United States make them change their price by changing the amount of oil we buy from them and using our reserves or our own wells?” This is an EXCELLENT question! This is a topic of hot debate in our country right now and is a prominent issue in the presidential race.

The countries of the Middle East (and Venezuela) have formed a conglomerate called OPEC or, Organization of the Petroleum Exporting Countries. They meet periodically to decide what price to set oil. Recently those prices have begun to rise and there are several reasons for that…

1. The US Dollar. Barrels of oil are priced in US dollars. With the recent slump in the economy here in the US the value of the Dollar, compared to other world currencies, is dropping. Thus, the price in US dollars goes up.

2. Newly industrializing nations. As highly populated countries rapidly develop their people are attaining more wealth than ever before. That is increasing the demand of oil to countries like India and China. As demand for something increases so does its price.

3. Natural disasters. Many natural disasters have occurred, such as Katrina, which has made the processing of oil to gasoline more expensive, making prices go up.

There have been many ideas put forth to solve this crisis.

1. Force. Your idea of making the countries make more would be difficult. Many of the countries are extracting oil at full capacity and are drilling in more places to attempt to extract more oil, it just takes time. It is also against international law to invade a country to force it to produce more natural resources and our military is already strained fighting in two wars.

2. Use our reserves. That will only last as long as our reserves last. Those reserves are also for emergencies. If our nation is attacked and our supply of oil is cut short, our military will still be able to function. If we use our reserves our nation will be more vulnerable than ever to attack.

3. Drill for more. Many have suggested we simply drill more oil here at home, especially in Alaska. One problem with that is environmentalists do not want to hurt the landscape. Another problem is the amount of time it would take to drill for and process the oil would not help us for 5-10 years. And finally Oil is a non-renewable resource. If we simply drill for more oil it will only delay the inevitable result of no more oil. Some experts predict that we are already at full capacity and will only maintain that for 20-30 years. After that the amount of oil the world can produce will drop, raising prices. Experts estimate that the world will run out of oil within 50-250 years, possibly in your lifetime.

3. Find alternates to oil. Both Democrats and Republicans agree we need to find an alternate to oil. Because no matter what we do, the world will (not might, WILL) run out of oil, and in the not too distant future. There have been several opinions on how to do that…

A. Hybrid Cars. Hybrid cars increase the mileage on the cars by using electric and gas power sources. That is great but it still just delays the inevitable of the world running out of oil by several decades at the most.

B. Ethanol vehicles. These vehicles use ethanol made by crops (corn in this country, sugar in others). I am sure you have seen the E85 gasoline at Spinx (it means Ethanol 85%). This has had some adverse effects lately that many were not ready for. As staple crops such as corn are used to produce gasoline the price of food has started to rise worldwide (along with the increased cost of moving it around using gasoline powered vehicles). This is the “food shortage” the news has been talking about. It is not really a food shortage, it is just that with higher demand comes higher prices (this is called inflation) and it hurts the poorest countries the most. As result warfare and riots have broken out in some of the poorest countries where people are starving. Another problem is that it is still burning fuel adding to environmental concern.

In addition to those problems Ethanol prices are deceptive. On the big board you see on the highway the ethanol gasoline looks less expensive. Priced by gallon it is cheaper, but it burns faster and thus you need to buy more, costing you more money.

C. Veggie Cars.Veggie cars use cooking grease. You know all that greasy food you eat at fast food restaurants and anywhere fries or fried food is made? Well, the oil that is used (an thrown away every day) can be used to power cars. The upside of this idea is that we are already producing the oil. All you need is a diesel engine. Filter the used vegetable oil (get out all the bits of food left over) pour it into the gas tank and voila! you can drive away not using any gas. The down side to this alternate is that it still involves burning fuel omitting pollutants into the atmosphere. In addition it would also continue to drive up food prices causing inflation.

C. Electric Vehicles. These vehicles are plugged in and charged at home. There is a down side to this as well. Our electric system is already strained as it is. Adding the amps that it will take to power an entire country’s worth of vehicles will take some major construction. If we build more wind power and solar power plants we will be alright. But if we simply stick to the old coal and nuclear power we will just continue to pump pollutants into the planet to power our cars, but it will come from power plants not our exhaust pipes. They also take a long time to charge and only have about a 400 mile range before needing a power up. That is a little too restricting to the lifestyle Americans are accustomed to.

C. Fuel Cells. Fuel cells produce electricity by combining liquid hydrogen with oxygen from the air. The result is power and the only omission is water vapor. This seems great but there is a dark side to fuel cells. As the technology stands right now the cheapest way to produce liquid hydrogen is by separating it from natural gas. Natural gas is a non-renewable resource, like oil, and the country with the largest natural gas reserves in the world is Russia, and many would not like to see that country get wealthy from gas sales. If we can find another, way to get hydrogen (and there are, just very expensive) then that would help the case for fuel cells. Another down side is that it would cost a massive amount of money to switch the entire countries system of gas stations over to liquid hydrogen from gas.

D. Solar Power. Another alternative would be to use solar powered cars. This would produce no pollution into the environment and would not cost anything to run. The downside to this right now is that we are not very advanced in our solar power generation. Solar powered cars do not go very fast right now, and they need a very large number of solar panels to power a minimal amount of weight. This does not work well for anyone that wants to drive a car with more than one seat. This is another technology that with more research and development we may very well see being used.

 Oil companies need to be held responsible as well as OPEC nations. Oil companies have seen record profits at a time when people are paying record prices. Both Democrats and Republicans are investigating oil companies right now to see if they have done anything less than honest during these hard times.

I hope this was helpful. I tried to show all of the arguments by both democrats and republicans to fix the problems, as well as the arguments against the proposed solutions.