Monday, December 01, 2008

Billions of Barrels of Oil

There is nothing like the long Thanksgiving Day weekend which allows us to relax with some light reading (when we aren't watching football games of course) such as this item I noticed in the November 29/30 Wall Street Journal:

"Proved Reserves, 2007, Top 10 Countries in Billions of Barrels"

Here is their top 10 list --

Saudi Arabia - 262.3
Canada - 179.2
Iran - 136.3
Iraq - 115
Kuwait - 101.5
United Arab Emirates - 97.8
Venezuela - 80
Russia - 60
Libya - 41.5
Nigeria - 36.2

Now this list can be viewed several ways. My purist free trade friends would say, "big deal where our oil comes from, we send them money and they send us oil, it works for everyone..........." However, I would note a few concerns with this list including the following countries where: we are involved in a war, there are local acts of terrorism against the oil industry, or we have very strained diplomatic relations with these nations -- Iran, Iraq, Venezuela, Russia, and Nigeria. This represents 5 of the top 10 owners of the world's oil reserves on this list. Libya might even have to be considered for this list given its past acts of terrorism but in today's new world Libya has renewed diplomatic relations with the Western nations but limited proved reserves.

While never a supporter of invading Iraq I did see the benefit of defending Kuwait from Saddam Hussein's invasion in 1990/1991 given the true threat he posed to the free flow of oil. Had Hussein fully integrated Kuwait as a province of Iraq the combined nation would have been second only to Saudi Arabia in oil reserves.

But why should we have expected Hussein would have stopped at Kuwait? Why not invade the United Arab Emirates at some point and then his old enemy - Iran - which would have made the "Iraqi Empire" the world's largest owner of oil reserves. At that point he could have invaded Saudi Arabia for a clean run of the table!!

Fortunately the USA-Canada border is the "world's longest friendly border" so a steady supply of oil seems assured but such a reliance on imported oil should force our nation to explore other options.

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