Portal for North America

Despite its great interest in doing so, the United States has little ability to affect the short-term price of oil. Its only option, as Dr Sands points out, is to find new sources of domestic supply (done, however, at great cost to the state and to the great profit of Big Oil) or promote alternative sources (also at a great R&D and implementation costs and fluctuating mid-term prices). We should also not lose sight of the fact that the U.S. continunes to be the Western Hemisphere's largest producer of crude oil, more than its NAFTA partners combined; by 2006 EIA figures, the U.S. produced 8.37 mmb/d, while Mexico is second with 3.71 mmb/d; and Canada just edges out Venezuela for third with 3.29 mmb/d. Even yet, the U.S. cannot control wild fluctuations in oil prices.

Turning to its North American neighbours for oil will not yeild dramatic results. Looking South, Mexico successfully avoided export quotas to the U.S. under NAFTA and is under no legal obligations to share in its diminishing supplies. And looking North, the nature of Canada's oil resources - and lack of on-site refining and upgrading - limits is ability to ramp-up supply when needed. Tar sands involve costly, environmentally-harmful extraction and refining techniques, where current capabilities are nearly maxed out. Again, without heavy investment (of tax dollars) and high prices (profit to Big Oil), the burden of oil/gas prices will be borne by the general public (aka tax-payers).

These realities will play out, no matter which Senator is sworn in on January 20th. Changing the energy conversation in America towards one that embraces series alternatives will come at a certain cost, economically but also in the electoral college. In fact, it is perhaps Mr Obama who has the most to lose, as his home state of Illinois acts as one of the main arteries of the North American oil pipeline infrastructure, specifically for upgrading of Canadian tar sands. The hub of Patoka, IL, is a main pinch point for both raw crude heading South to Texas for refining and for consumer-end product heading North to Chicago (and Ontario) and East to New York for consumption.