Vishwarupa
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We all know how high gasoline prices have continued to rise, year over year. Higher gasoline prices are largely based on higher crude oil prices – likely to bounce between $90 and $100 per barrel for the foreseeable future – plus refining costs, transportation, labor, taxes and (dare we mention it?) profit.
But there is a hidden cost in what we pay for the oil we import from the Middle East. That is the cost of protecting the well sites, pipelines, and shipping lanes. We currently have two carrier battle groups stationed in and around the Persian Gulf to protect the oil coming through the Strait of Hormuz. According to a report from the Government Accountability Office, the annualized cost of keeping a carrier battle group at sea is $2.93 billion. Two battle groups cost about $5.86 billion per year. And there are discussions about moving a third group on station to deal with potential issues between Iran and Israel.
About 17 million barrels of oil move through the Strait of Hormuz each day. Two million barrels of that comes to the United States. The other 15 million barrels goes to China, India, Europe and elsewhere across the oceans.
We get just over 10 percent of the oil, yet we pay 100 percent of the costs of protecting it.
Oil is a very small player in the production of electricity – about three percent. Most of the oil we import is used as gasoline to run our national fleet of 250 million passenger cars and light trucks. More of it is used as diesel to fuel our eight million heavy-duty trucks.
It is too complicated logistically to try and create a massive base of natural gas-powered cars. However, heavy trucks – those 18-wheelers – tend to run the same routes week in and week out, so it is a relatively simple matter put natural gas refueling stations at enough truck stops along Interstate highways to handle their fueling needs.
If we converted all of our heavy trucks to natural gas we would reduce our need for OPEC oil by 75 percent. Without the need for Middle East oil, we would reduce the cost of protecting it by 100 percent. If the Chinese or French still need it, they can pay to protect it.
We need to get off OPEC oil and onto domestic resources. It can be done in about five years and would have a positive impact on our economy, our environment, and our national security.
Source: Article in Linkedin written by T. Boone Pickens
Founder, Chairman and CEO at BP Capital and TBP Investments Management
But there is a hidden cost in what we pay for the oil we import from the Middle East. That is the cost of protecting the well sites, pipelines, and shipping lanes. We currently have two carrier battle groups stationed in and around the Persian Gulf to protect the oil coming through the Strait of Hormuz. According to a report from the Government Accountability Office, the annualized cost of keeping a carrier battle group at sea is $2.93 billion. Two battle groups cost about $5.86 billion per year. And there are discussions about moving a third group on station to deal with potential issues between Iran and Israel.
About 17 million barrels of oil move through the Strait of Hormuz each day. Two million barrels of that comes to the United States. The other 15 million barrels goes to China, India, Europe and elsewhere across the oceans.
We get just over 10 percent of the oil, yet we pay 100 percent of the costs of protecting it.
Oil is a very small player in the production of electricity – about three percent. Most of the oil we import is used as gasoline to run our national fleet of 250 million passenger cars and light trucks. More of it is used as diesel to fuel our eight million heavy-duty trucks.
It is too complicated logistically to try and create a massive base of natural gas-powered cars. However, heavy trucks – those 18-wheelers – tend to run the same routes week in and week out, so it is a relatively simple matter put natural gas refueling stations at enough truck stops along Interstate highways to handle their fueling needs.
If we converted all of our heavy trucks to natural gas we would reduce our need for OPEC oil by 75 percent. Without the need for Middle East oil, we would reduce the cost of protecting it by 100 percent. If the Chinese or French still need it, they can pay to protect it.
We need to get off OPEC oil and onto domestic resources. It can be done in about five years and would have a positive impact on our economy, our environment, and our national security.
Source: Article in Linkedin written by T. Boone Pickens
Founder, Chairman and CEO at BP Capital and TBP Investments Management
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