The Hidden Costs of Middle East Oil

Discussion in 'Economy & Infrastructure' started by Vishwarupa, Oct 12, 2012.

  1. Vishwarupa

    Vishwarupa Senior Member Senior Member

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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
     
    Last edited: Oct 12, 2012
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  3. Bangalorean

    Bangalorean Stars and Ambassadors Stars and Ambassadors

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    ^^ Heh. According to me a more appropriate headline is "the hidden costs of being a superpower and global policeman" :heh:
     
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  4. amoy

    amoy Senior Member Senior Member

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    That's why US dollar is the world reserve currency. And America enjoys enormous gains from seigniorage. Why US Dollar will remain as World Reserve Currency! - TRCB

     
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  5. sesha_maruthi27

    sesha_maruthi27 Senior Member Senior Member

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    The adamant world must be taught a lesson for ill-treating the Asians........
     
    Last edited: Oct 12, 2012
  6. SADAKHUSH

    SADAKHUSH Senior Member Senior Member

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    Let us not forget the writer has personal financial interest in the gas wells and that is one of the reason in my opinion he has been advocating switch to natural gas for its use in the automobiles. O the other hand it is in the news today that USA has given permission to BP to export oil to Canada for refining from their massive shale oil wells
    in the Colorado area. USA has already achieved natural gas surplus and will be in surplus in petroleum which in turn will lower the cost of manufacturing overall. India is playing major role in the petroleum industry and helping USA to achieve the goals of self sufficiency.
     
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  7. Ray

    Ray The Chairman Defence Professionals Moderator

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    Sadly, because of a variety of reasons, Asians continue to accept the ill treatment.

    First of all, we ill treat each others.

    Others join in to have fun!

    And the cycle is complete.
     
  8. SADAKHUSH

    SADAKHUSH Senior Member Senior Member

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    They would not be mistreated if they stand up and fight back for their rights. That means the mindset of the leaders of the time has to change and negotiate as equals and only compromise if the return is better for the long run. What, I am trying to say is we in Bharatvarsh have to encourage the innovation and learn the positive ways of doing the things for the sake of the nation instead of being mired in never ending cycle of scandals.

    We have been operating the nations business without being accountable for our (politicians and bureaucrats) actions. We should accept the punishment for the wrongs we do to our own people instead of using influence to get out of the situation. It has to start with the each and every Bhartiya and no one should be let go ust because they know someone higher up.

    I am firm believer in Military style discipline in our daily life as well.
     
    Last edited: Oct 12, 2012
  9. Nagraj

    Nagraj Regular Member

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    I long for a world where we don't depend or need fossil fuel.
     
  10. amoy

    amoy Senior Member Senior Member

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    The dependence can be hugely eased. This moment nuclear takes around 2% of China's power supply and India <3% probably vs. 20% in the US.

    And below is a wind mill / seaside of my hometown
    [​IMG]
     
  11. panduranghari

    panduranghari Senior Member Senior Member

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    Nuclear is the only way. Have you seen the movie 'Collapse' ?



    I followed the financial sector seriously from 2005 until the crash of 2008. When I saw this movie in 2009, everything clicked.

    Watch the full or start watching from 4.30
     
    Last edited by a moderator: May 10, 2015
  12. panduranghari

    panduranghari Senior Member Senior Member

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    Last edited by a moderator: May 10, 2015

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