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Where does gasoline come from? Why does it cost so much??

First let me state right up front that I’m about as far from an oil expert as you can get. I’m just a Southern California car guy who owns ’34 Ford hot rod that gets about 8 miles to the gallon  . . . and that’s Premium! Four bucks a gallon!!

So I let Google’s search engine do the walkin’. I still don’t have an ‘answer’ . . . but I found that I had a lot of misconceptions and I found that a lot of things just don’t make sense.  . . . as follows:

• The largest exporter of oil to the United States isn’t Saudi Arabia . . . it’s Canada. Canada exports more oil to the US than Saudi Arabia, Iraq, and Kuwait combined.
• Saudi Arabia does have the worlds largest ‘proved reserves’ . . . but at current production rates Canada has the worlds highest ‘reserve life’ . . . 182 years for Canada vs 81 years for Saudi Arabia.
• On the ‘reserve life’ list of ‘proved reserves’, the United States is 11th out of 12 of the major oil producing countries. At current production rates the United States will run out of it’s own oil in just 12 years!
• BUT . . . the definition of ‘proved reserves’ is very slippery. Canada has the worlds largest ‘oil sands’ reserves. Because Canada is actively engaged in producing commercial quantities of oil from oil sand, these reserves are considered ‘proved reserves’. The United States has the worlds largest ‘oil shale’ reserves. Although the technology exists to extract oil from oil shale, the Unitied States IS NOT actively engaged in producing commercial quantities of oil from oil shale. Oil shale is not considered ‘proved reserves’.
• If the United States were to promote oil extraction from oil shale to a commercial level and oil shale became considered ‘proved reserves’, the United States would have the largest ‘proved reserves’ on earth. The United States would have more ‘proved reserves’ than the rest of the world combined. Or, as a practical matter, the United States would have enough oil to supply ALL of it’s own oil (at current rates) for over 100 years.
• Most of the oil shale in the US is located on federal lands in Colorado, Utah, and Wyoming. There is currently a CONGRESSIONAL MORATORIUM on enacting rules for extracting oil from oil shale on federal lands. The Senate Approprations Committee recently voted to continue the moratorium with a vote 15 to 14. That is 15 Democrats voted to continue the moratorium and 14 Republicans voted to discontinue the moratorium.

I haven’t been a Democrat or a Republican for years. It seems to me that both parties are so wrapped up in ’special interests’ that common people are left completely out of the equation . . . BUT, if the democrats don’t understand that the United States can’t afford to spend a BILLION DOLLARS PER DAY on foreign oil . . . well, this is an election year and that’s a deal killer. The US currently buys over 11,000,000 barrels per day from foreign countries . . . this includes over 1.5 million barrels from Saudi Arabia (birthplace of Osama Bin Laden) and 1.2 million barrels from Venezuela (birthplace of Hugo Chavez). At $95 per barrel this is BIG money. Money we could certainly use right here in the US. Am I wrong?

A couple of links to more info. These folks seem as dumbfounded as I am but they also seem to be Republicans. I haven’t been able to find anything about this from the Democrat side . . . maybe the Democrats were just voting against the Republicans because they’re on the ‘other’ side? Anyhow . . . :

http://money.cnn.com/2008/06/06/news/economy/birger_shale.fortune/index.htm

http://hatch.senate.gov/public/index.cfm?FuseAction=PressReleases.Detail&PressRelease_id=50f239df-1b78-be3e-e054-f692eaefa0a6

Seems I got a little off track on this one . . . I still don’t know why the price increased so quickly . . .

Thanks for visiting.

Fred Mangel