Oil-based economy still rules

Worried about peak oil? Wait till you see west Texas. Bob Schmuke reports home from the panhandle.

'West Texas Intermediate, $58.78." How many times have we seen this figure on our daily news broadcasts or in our newspapers while not really registering what it means?

The quote is for a light, sweet crude oil produced in the panhandle region of west Texas and southern Oklahoma. It's a benchmark for oil pricing and futures contracts and its low sulphur rating allows it to be easily refined.

The west Texas panhandle region is not an area often visited by Kiwi tourists. Almost 1500 kilometres of featureless, barren plains broken up only by interstate highways, blowing tumbleweeds and pump jacks. Pump jacks, also called "nodding donkeys" after their unusual shape, are individual oil pumps that dot the landscape and bring up the light crude for their owners.

One sees thousands of pump jacks when driving along Interstate 20 in west Texas and the oil industry service cities of Odessa and Midland owe much of their commercial success to these ubiquitous devices.

West Texas is an area where many of the original wildcatters of the oil industry drilled their initial wells after the first big Texan discovery, Spindletop, blew in 1901 further east.

Oil transformed the Texas economy, turning what was an agricultural state into a financial powerhouse early in the 20th century. Texans concerned themselves with discovering new oil fields and building cities like Houston to refine and distribute the crude. Oil dollars lubed growth and the biggest state in the Union (at the time) prospered.

So it's no surprise that folk in Texas don't think oil will be replaced as the basic power source for the American economy in the near future. "Not in my lifetime" is a statement commonly heard.

America is still one of the top three oil producers in the world, after the Middle East and Russia, and the oil industry forms a major economic cornerstone of the country. And from oil production flows the associated vehicle manufacturing and support industries that employ such a big slice of American workers.

GM, Ford and Chrysler fail? Even Barack Obama wouldn't dare let that happen on his watch.

Besides the hundreds of thousands of auto workers, there are the millions who sell and service the vehicles, make the ancillary support products such as tyres and batteries, and work in the transport industry that moves America.

And if there is any doubt that America's economy exists because of the oil-fuelled transport system, just venture onto the interstate highway system. Initiated by the Eisenhower administration in the 50s, it is the largest highway system in the world and the largest public works project in history. It covers more than 75,000km of the USA and connects all the country's major cities by a system of freeways controlled by each state. If you are driving across America, you will appreciate this system, as drivers can cover large distances in minimum time.

However, if you are a peak oil/global warming-concerned person, you will find crossing the US on the interstate highways more than a little disconcerting.

Let's take that West Texas Interstate 20 we mentioned earlier. From Dallas to El Paso on the state's western border is approximately 1120km.

The speed limit here is 120kmh. If you drive at that speed, you will be constantly passed by hundreds of trailer trucks. The acceptable speed seems to be 16kmh above the limit. When we travelled that highway, I saw one traffic officer and no accidents it must have been our lucky day.

The truck drivers are uniformly very good and don't seem tempted into road rage behaviour because of stupid driving by their smaller brethren. They have dedicated truck stops to cater to their every need fuel, food and entertainment.

They basically live in their trucks, with quite sophisticated sleeping quarters, microwaves, DVD players and laptops but cellphones have replaced the Smoky Bear CB radios. A few years ago, a number of Kiwi drivers were recruited into the long-haul ranks in the US. They loved the dollars and were good at the job.

But the point is these trucks move America's output, many thousands of them are on the road at any one time, and the Fedex mentality of a package delivered in 24 hours anywhere in the country is alive and well. There isn't a Prius-type truck replacement anywhere on the horizon and there won't be for a long time.

So while we feel good lecturing Americans about energy savings in our letters to the editor column in The Nelson Mail, the fossil fuel situation there isn't going to change any time soon. New technology is the only saviour for the transport system but will it come soon enough?

Nelson resident Bob Schmuke has been doing a tour of his old home country, the US, and reporting back in this short series for The Nelson Mail.