T. Boone Pickens: End the Mideast Oil Addiction

It’s high time we had a plan to replace imported oil with domestic natural gas.

My father once said that a fool with a plan can beat a genius with no plan. Well, when it comes to energy–especially oil–China is certainly giving the U.S. a drubbing.

The U.S. is the largest economy in the world, and, recession or no, it takes a lot of energy to fuel that economy. Despite having less than a quarter of China’s population, the U.S. uses two and a half times as much oil as China (20 million barrels a day versus 8 million) and imports three times as much. But China, the world’s second-largest economy, with a GDP growing at more than 7% per year, is the one trotting around the globe locking up oil reserves while the U.S. remains dependent on the kindness of exporting countries.

Prior to the U.S. invasion of Iraq, China had negotiated for a call on a significant percentage of the available oil from Iraq’s huge reserves. After the invasion, when those contracts with Saddam were nullified, China embarked on a worldwide buying spree to ensure it has the oil it needs to fuel its growing economy.

China understands the laws of supply and demand. World oil production is currently 85 million barrels per day. OPEC is holding some production to keep the price between $75 and $80 a barrel, but at some point the global economy will bounce back, and demand for oil will climb steeply.

Forbes