Saturday, May 14, 2011

The Global Gas Wars

Global American Series

13 May 2011

One major change is happening in the mother-of-all-oilfields, Saudi Arabia. Currently it is exporting 8 million barrels of oil/day, much of it to the U.S. However, by 2028 that oil will no longer be available for export. Why?

There are startling changes going on across the world that are impacting gasoline prices not only today but possibly for decades to come. This week on Global American™ radio we cover the “Global Gas Wars” and what it means for Americans as gas prices hit record highs. Is this temporary -- or is this the “new normal”?

Our guest is Loren Steffy, business columnist for the Houston Chronicle who recently traveled to Dubai and Saudi Arabia and saw firsthand the changes going on in the Middle East and the challenges for America in maintaining our oil supplies. We are 5% of the world’s population and we consume 25% of the world’s energy.

And why is it that Saudi may not be able to increase production to offset higher prices as it has done in the past?

Another factor contributing to oil prices is the rise of China and India – China alone will put another 170 million cars on the road in coming years. Streets once filled with bicycles when I first traveled there in 1982 are now jammed with cars in gridlock.

Even the “Arab Spring” will have an impact on available oil – because of the economic changes that it will bring to the Middle East (and we are NOT talking an embargo like we had in the 70’s).

What does gasoline cost in other countries? Where is it the cheapest? Most expensive? U.S. gas prices are neither the cheapest nor the most expensive by far. One country sells it for 22 cents/gallon! How can they manage that? Is it a place you would want to live?

Mr. Steffy also points out some worrisome trends when it comes to “deepwater wells” like Thunder Horse in the Gulf of Mexico. For some reason the production has “collapsed” after a short time, putting at risk the the $1 billion it costs to drill these monsters (like the “Deepwater Horizon”). He addresses whether “Drill Baby Drill” would solve our energy shortages even if we go ‘full throttle.’

Tune in Saturday at 9 am Central time on Business 1110 AM, streamed on and --if you miss it -- podcast 24/7 at (click on ‘favorite program’ and look for the above title).

Is this the “new normal” or not?

Michael Fjetland

Global American Series

Comments welcome.

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