Que Bono Peak Oil?

A few weeks ago I received a mass e-mail from an old and dear family friend, of my parents generation, containing a passionate article about the discovery of a huge oil reserve in the Western United States.  It is in a formation known as the “Williston Basin” which is commonly referred to as the “Bakken.”  The article asked, quite reasonably, “Why aren’t we drilling for oil in the United States instead of overseas?  The e-mail further urged recipients to “spread the word” to their friends, elected representative, etc..

I thought this question deserved a little thought and some discussion but before I go into that, let me share the link to the US Geological Survey (USGS) website and an article there that seems to support the assertion there is about 2000 years worth of oil right under the Rocky Mountains: http://www.usgs.gov/newsroom/article.asp?ID=1911.  It also plays right into current discussions about “peak oil.”

The article I received also claims that this oil could be brought to the surface for around $16 barrel.  One comment lamented the lost opportunity for all the jobs involved in drilling, transporting, refining, etc. of all that oil.   It was pointed out that this discovery would relieve the United States of all dependence of foreign oil.  It made my mouth water, just thinking of our being able to tell OPEC to go jump in the lake.

Why isn’t this huge discovery being tapped?  The article blames the Environmental lobby, and further implies that OPEC is funding the environmental lobby in order to retain their monopoly on the planet’s oil markets.  And this seems to make sense that a few dollars spent by the OPEC countries to support the well-intentioned environmental lobby, could pay big dividends in the form of preserved oil sales and a high price.

Personally, I think everyone should be an environmentalist, but that shouldn’t mean we don’t use our resources.  Rather we should find and demand responsble use of resources.  Ever since my “White Out” correction fluid was summarily evicted from Fort Huachuca in 1994 by the Environmental Protection Agency (EPA) office there who, among other things, required the drivers of military vehicles to place commercial size cookie sheets under their vehicles whenever they stopped (in case they dripped oil), I have viewed the actions of the Environmental lobby with some skepticism.

One wonders if all the Humvee (and Tank, Truck, Armored Personnel Carriers, etc.) drivers in Iraq and Afghanistan lay out the cookie sheets whenever they stop to avoid polluting those countries, but I digress….

It would have been easy for me to jump on the bandwagon of protests demanding we tap this huge energy resource but something about this article didn’t smell right to me.  When I re-read the article, it hit me.  The discovery was made over two years ago!  You’d think a discovery like this would be all over the mainstream media (MSM), it clearly being a story of similar magnitude to the 1849 discovery of gold in California.

While I admit to not being all that well-read on the developments in the oil exploration business, I still have to wonder, Why is this the first I’ve heard of this?

For more than a century, whenever it’s been puzzled about which country was responsible for some mysterious activity, the British Foreign Office has asked itself the simple question, “Que bono?” which is Latin for “Who benefits?”  It has proven a reliable thought process to use in finding the responsible party or parties by simply asking, “Who benefits from this situation?”  The answer being a pretty good bet as to who are the responsible parties for a given set of circumstances.

In this case, we can use a similar process to find a very plausible answer to the question, “Why isn’t the Williston Basin being tapped?”

I believe this is so because we can ask ourselves some questions that will help lead us to the (in my opinion) most likely answer.  The first we’ve already asked, “Why is the MSM quiet on the subject?”  I mean if nothing else, why isn’t FOX NEWS beating us senseless about it every day?  If they were, we’d be arguing about it all over America in barber shops, beauty salons, coffee shops, and Internet chat rooms.

Furthermore, the American Oil Lobby is no lightweight.  We are talking about one of most (if not the most)  powerful sectors of American industry, with no small amount of  experience in politics and lobbying.  Suffice it to say this lobby has more battle streamers than the Environmental lobby and they’ve never been known to back down from a fight.  It’s hard to imagine American oil companies saying to themselves, “Well it would be nice to tap that 2000-year supply of oil in our own  backyard, but alas, the Environmental lobby won’t let us.”  Guess we’ll just stick to drilling oil in the Middle East, where it’s safer.”

If there really was an economically feasible (i.e. potential margins and profits greater than the oil they’re importing) deposit of crude oil inside the United States that they wanted to tap, logic tells us that they would be fighting tooth and nail for the opportunity to tap it.  I refer the reader back to “Carl’s First Rule of Human Behavior” (http://www.dailydiatribe.net/index.php/component/content/article/36-news-analaysis/57-airlines-and-the-magical-fruit).  If the oil companies don’t do what so obviously makes sense, then they simply must be working under different objectives, assumptions, and/or core beliefs than we think they are.

The lack of protest by the oil industry, equally puzzling dearth of cheerleading for drilling on the part of Fox News, and general “non-issue” status of this story tells me that the oil companies are satisfied, at least for the moment, with how things are.  If they weren’t, they’d be shouting from the mountain tops.  And one thing for certain, if they were even thinking about poking a hole in the ground in North America, the Environmental Lobby would be telling the story and making demands, now wouldn’t they?

So why are basically all sides of this issue silent?   Why aren’t the oil companies rushing to tap this huge resource?  Are they waiting until they exhaust all the foreign oil first?  Are they making more profit from the foreign oil than they would from the domestic oil?  (It sure would put some oil tankers out of business, wouldn’t it?).  Or is it not really the oil deposit we’ve been led to believe it is?

I think it’s unrealistic to think that the Oil Lobby in the USA is just quietly laying down and surrendering to the Environmental Lobby.

Thanks for reading!