The Fault Lies Not in Our Stars

Here's the deal. The reason we are drilling in dangerous places like the deep water GOM is because oil is above $60 a barrel. Actually now it's close to $80 and probably headed to $100. Drilling in deep water is very expensive, and if the price of oil were, say, $40 a barrel, it wouldn't be worth it. Why is the price of oil above $60? Global demand is above 80 million barrels a day but the U.S., with 5% of the world's population uses a quarter of that. If our oil consumption per capita were like that of the EU, world demand would be about ten million barrels a day lower. This would mean the world price would probably be lower than $40 so nobody would be drilling in the GOM. For example, it costs about $12 to get oil out of Prudhoe Bay in Alaska and a few bucks a barrel to ship it to refineries in Washington and California. It costs about $4 to get a barrel out of the supergiant Saudi fields but they can't really ramp up production that much.

So the next time you get in your SUV to drive to the convenience store a mile away to get a six pack, a pack of weeds or a gallon of milk, think about your own culpability in the disaster in the Gulf. As Hamlet said, "the fault, Horatio, lies not in our stars, but in ourselves."