Addictive Crude Oil from Unstable Nations
Here's a quiz: Which country provides the United States with the largest single source of imported oil? If you said Saudi Arabia or Iraq -- or anywhere else in the Middle East -- you would be wrong. The answer? Canada, followed by Mexico, and then Saudi Arabia.
"I thought the Middle Eastern part [of President Bush's State of the Union speech] was grossly exaggerated, given the percentage they supply," says Frank Verrastro, an energy analyst with the Center for Strategic and International Studies. "It's hard to pick out one part of the world as being more unstable than another part, especially if you're projecting 20, 25 years out."
The United States gets about 17 percent of its oil from the Middle East, a portion that has remained more or less steady over the past few decades. Increasingly, the United States is turning to countries like Venezuela for oil. In fact, Venezuela is now America's fourth-largest source of imported oil, a fact that Venezuela's populist President Hugo Chavez is well aware of -- he uses oil as a stick with which to threaten the United States.
Another major source of imported oil is Nigeria. We get about a million barrels a day from that country, a figure that is increasing all the time. Nigerian oil is high quality, light sweet crude particularly good for producing gasoline. But Nigeria has been fraught with tension -- militants have attacked oil refineries and kidnapped foreign oil workers.
"You've seen these local militias increase in strength and for a long time there has been smuggling of oil supplies to the tune of 70,000 barrels a day," says Frank Verrastro. At $60 a barrel, he says, that amounts to "a chunk of change."
The militias use that money to buy arms. Sometimes, in fact, the militias are better armed than the police. The bottom line, analysts say, is that Nigerian oil is no more stable than oil from the Middle East. And the larger lesson, some say, is that today's stable source of oil is tomorrow's nightmare.
Frank Verrastro applauds President Bush for, as he puts it, "finding religion" when it comes to finding alternative sources of energy. He just wishes the president had found that religion a bit sooner...
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