Oil Storm

Earlier this week I saw an interesting movie on the FX network called "Oil Storm." It was a fake documentary about an oil crisis in late 2005-2006. Essentially, several factors led to a worldwide spike in oil prices, leaving gasoline at up to $8.00 per gallon and Oil at $200 per barrell.

The story goes like this:

• Fall 2005: a category 1 hurricane hits the oil refineries of Louisiana, crippling America's refinery capacity. Gas hits $4.00 per gallon.
• The Bush administration reacts by pressuring our Saudi "allies" to step up production. I'm not sure how increased Saudi production of oil impacts a refinery capacity problem, but I was skipping back and forth to Chappelle's Show reruns on Comedy Central. I assume the Saudis were refining the oil then sending the gasoline over to the US. I don't know if it is ever done that way, but I'd assume it is possible.
• Terrorists destroy the Saudi pipeline to the refinery, sending gas prices skyrocketing. Gas hits $6.00 a gallon. Americans begin to lose jobs and the economy begins to crash.
• Bush reaches out to other oil producing nations, cutting a deal with the Russians.
• Just as four Russian supertankers are about to pull into US ports, they back off. It seems the Chinese outbid the US at the last minute. The economy goes into depression. Gas hits $8.00 per gallon. Everyone blames Bush, since he is solely responsible for the nation's dependence on oil.
• Eventually the US repairs the refinery and prices level off. But much damage has been done, all because you drive an SUV.

While this story has many fundamental weaknesses, parts are compelling. A hurricane could damage refinement capacity. Terrorism could restrict a portion of the mideast oil supply. A Goldman Sachs analyst recently suggested oil could hit $100 a barrell. If there were an oil crisis, Americans would undoubtedly blame Bush.

I have two favorite scenes in the movie. Both deal with the Russian tankers diverting toward China. First, the narrator mentions that the markets panic as this happens. Now I know that four supertankers hold a lot of oil or gas or whatever. But for Pete's sake, four supertankers probably carry enough oil to satisfy 0.01% of US demand on any given day. Attention King Banaian: have I overestimated? My second favorite scene is an interview with a Joe Sixpack character at this point. He tells the camera how at that point he called his 9-year old over to tell him how he can tell his grandkids that he remembers the day the USA became a piss-ass country. He says as if he is proud that it happened. Other fun scenes include a group of farmers protesting the lack of increase to their federal subsidies to keep up with gas prices (they call them cuts!)

Despite the patently ridiculous arguments, it is worth considering what would happen if a perfect storm doubled oil prices. However, this movie made "The Day After Tomorrow" look fair and balanced. I thought FOX was supposed to be the right-wing lunatic network.