Oil hits $100 a barrel

Sarah Gardner Mar 2, 2011

Oil hits $100 a barrel

Sarah Gardner Mar 2, 2011


Kai Ryssdal: Should you have wanted to purchase a barrel of crude oil this morning at the New York Mercantile Exchange, it would have set you back $102.23. The trouble in Libya is the immediate cause.

But every time a squeeze like this happens, we start hearing about our dependence on foreign oil. A long line of presidents has bemoaned our addiction. Why haven’t we been able to break the habit?

Sarah Gardner reports from the Marketplace Sustainability Desk it’s because we don’t really want to.

Sarah Gardner: OK, it’s not exactly that we don’t want to get off foreign oil. Richard Nixon certainly did. Or at least he said so in 1973 after the Arab oil embargo.

Richard Nixon: Let us set as our national goal that by the end of this decade, we will have developed the potential to meet our own energy needs without depending on any foreign enemy, eh, eh, foreign energy sources.

Later presidents may not have made that particular slip of the tongue, but they echoed the sentiment. Listen to George W. Bush in 2007.

George W. Bush: Tonight I ask Congress to join me in pursuing a great goal. Let us build on the work we’ve done and reduce gasoline usage in the United States by 20 percent in the next 10 years.

Not as ambitious a goal as Nixon’s, but Bush told us it would cut oil imports substantially. And imports have fallen in recent years, thanks in part to homemade biofuels. But imports still make up half of all the oil we consume. We still use lots of gasoline and we expect it cheap. That’s partly why Congress would rather drink diesel fuel than raise gas taxes.

And Bob Deans at the Natural Resources Defense Council says the oil industry likes it that way.

Bob Deans: If you look at the top five largest privately-owned oil companies they made $950 billion in profits just over the past decade, and these companies take care of themselves. Here in Washington they’re served by an army of lobbyists almost 800 strong.

But it’s not just our expectations of cheap gas and oil industry muscle. Rice University’s Amy Myers Jaffe says we’ve also pandered to the auto industry. Reached at an energy conference in Tokyo, Jaffe says we could have asked a lot more of carmakers.

Amy Myers Jaffe: And it’s really disgraceful because other countries have had a very pro-active policy. There are better efficiency and mileage standards in China than there are here in the United States.

But our dependence on foreign oil also stems from a reluctance to produce more here at home. We’ve restricted our offshore drilling out of concern for the environment and rightly so, said critics, following the BP disaster. Those same critics say we’ve also skimped on research funding for alternatives to petroleum.

But oil expert Philip Verleger believes there’s a reason for that.

Philip Verleger: The government has proven to be horrible at picking winners.

So is Nixon’s goal of U.S. energy independence a mere dream? Daniel Yergin is author of “The Prize: The Epic Quest for Oil, Money and Power.” He says energy independence has always been an elusive goal, given our lifestyle and the breadth of the American economy. Until we all start driving cars fueled by some economical alternative to oil, Yergin argues we should set more practical goals.

Daniel Yergin: Diversification of where our supplies come from, increased efficiency of automobiles and a balance between domestic production and imports.

Which we might have by 2016, when automakers have to meet new fuel efficiency standards, albeit not near as tough as Europe’s or Japan’s.

I’m Sarah Gardner for Marketplace.

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