The United States uses more oil than any other country. We're so hung up on the stuff that the 8 million barrels we produce each day aren't enough. So every day we import another 12 million barrels, says Matthew Yeomans, author of the new book Oil: Anatomy of an Industry, and editor of www.petropulse.com. From his home in Wales, where he lives with his American wife and their 18-month-old son, he talks about the relationship between the United States and Saudi Arabia, how prices at the pump could affect the election, and the "magic of gasoline."
Why did you decide to write the book?
I had been writing about oil [for the Industry Standard and other publications] for years and thought I knew quite a bit about it. But the more I thought about it, the more I realized it was such a huge, amorphous subject that touches nearly everything we do, and that because it's such a big topic, people tend to glaze over on it. So I decided to write a handy, straightforward Oil For Dummies -- without it being Oil For Dummies, if you know what I mean.
How did Dan Yergin's book The Prize: The Epic Quest for Oil, Money & Power influence you?
The Prize is the mother lode of oil history. And if you have a great deal of time to get through 800 pages of oil history, it's fantastic. I waded through it twice, but I thought I could draw on it and help people who don't have time to go through all of that.
You write a lot about Saudi Arabia, of course. How much oil do they really have? And what is our relationship with them?
Saudi Arabia has more oil reserves than any other country in the world. And, historically, the relationship between the U.S. and Saudi Arabia has been very tight, ever since the wooing of Saudi King Abdul Aziz ibn Saud in the 1940s. There's a famous scene where President [Franklin Delano] Roosevelt and [British Prime Minister Winston] Churchill both go to Saudi Arabia within a week of each other to court King Saud. Roosevelt wins because King Saud has a colonial distrust of the British. There is this apocryphal, maybe true, story of a pledge Roosevelt gave: The U.S. will always protect the Saudi kingdom in exchange for a steady flow of oil.
Is the relationship too tight?
You could argue that, yes, it has been too close. It's easy to criticize U.S. support of Saudi Arabia -- especially since it's an autocratic, fundamentalist nation that may or may not be seeking to undermine American interests. But if it weren't Saudi Arabia, it would be somebody else. The U.S. will have close ties with whatever country has a steady -- though not necessarily cheap -- flow of oil, because the U.S. depends on it.
Is the price of crude oil at an all-time high? And what does that mean for us?
The price is not at an all-time high when adjusted for inflation. It would have to hit $80 a barrel to reach the level during the Iranian revolution in 1979. But crude oil did reach the so-called all-time high of $49.50 a barrel on August 20 -- the highest it's been since it was first traded on the New York Mercantile Exchange in 1983. And yes, it could mean higher gas prices. At the moment, you pay an extra $5 if you take an international flight because of an emergency-fuel surcharge. We could see a prolonged period of high prices that could bring about an economic recession.
How does this affect domestic politics?
Obviously, it's very difficult for the Bush administration, which is basically the party of oil and big energy. Eight or nine members of the administration have solid oil and gas backgrounds. The Kerry campaign, on the other hand, has tried to encourage the use of alternative fuels. But as an example of how oil affects politics, you can consider that most experts say we could cut U.S. dependence on oil by raising fuel standards for cars and SUVs -- yet automobile manufacturers in states like Michigan and Ohio say raising fuel standards will cost jobs. So the issue is a political pariah. The Bush administration has tried to ignore the whole thing. The Kerry campaign says it would raise fuel standards on 2008 models of cars and trucks, making sure they get 40 miles per gallon. We'll see whether it's bold or foolhardy for [John] Kerry to embrace this policy.
Will gas prices have an impact on the election?
My suspicion is gas prices would have to exceed $3 a gallon before it affects the voting psyche of the electorate.
Tell me about the gas tax.
Political suicide; no one will ever do it.
Are we running out of oil?
In every decade in the short history of oil, people have said, "We're running out." And every time, the price goes up. Then more oil is found, and the price drops. So the answer is, no, we're not running out. There's enough oil in the ground to last for decades. The question, though, is how much will we pay for it? A recent report in Petroleum Intelligence Weeklysays we're not just seeing a spike in the price of oil; it might keep on going up
In your book, you quote an ad about the "magic of gasoline." There's a romantic allure of the road and gasoline in this country. How do you fight that?
The allure of gasoline was simply a marketing ploy. What's more fundamental is the American love of automobiles and the sense of individuality and freedom that come from them. But there's no reason why we can't create the next generation of automobiles that offers independence and a sense of the open road -- but that don't use fossil fuels.
What kind of car do you drive?
A secondhand Ford Scorpio. But I bike to work.
Is your son into cars?
Yeah, of course. Every 18-month-old is into "broom-broom."
Tara McKelvey is a Prospect senior editor.
