WE WERE WARNED: TOMORROW'S OIL CRISIS

CNN Presents Airs: March 18 and 19 at 8 p.m., 11 p.m. ET

http://www.cnn.com/CNN/Programs/presents/

What if a hurricane wiped out Houston, Texas, and terrorists attacked oil production in Saudi Arabia? CNN Presents looks at a hypothetical scenario about the vulnerability of the world's oil supply, the world's remaining sources of oil and explores the potential of alternative fuels.

............

BEHIND THE SCENES: POWERING THE PLANET

By Frank Sesno
CNN
Friday, March 17, 2006

http://www.cnn.com/2006/US/03/16/bts.sesno.oil/index.html

WASHINGTON - This was, to be honest, simply a different kind of journalism. I've never done anything quite like it. It was time travel, globe-trekking and fact-checking all rolled into one. It was about oil and our addiction to it, how we keep it flowing and what happens if the supply is interrupted. At every turn, I discovered something new and saw the complexity and the global nature of it all.

My time travel revolved around a series of events we set in 2009 -- a hurricane followed by a terrorist attack that disrupts the flow of millions of barrels of oil, plunging the world into chaos. We devised the scenario after talking with experts who have gamed out this type of thing. As a journalistic experience, it was as instructive as it was chilling. Envisioning the future -- stepping into it -- made the hypothetical real.

As for the present, we just traveled the world.

It started with a helicopter ride -- 90 minutes over the choppy waters of the Gulf of Mexico, out to some of the deepest waters in the region. As I watched the sun rise in the distance and the dark water pass below, I realized how desperate we are. We are totally dependent on oil, and there's practically no place we won't go to get it.

In the distance, I glimpsed a speck. As we got close, its outline took shape. It was a drill ship called the Deepwater Millennium -- our first stop on a global tour that would impress upon me the dimensions of technology, determination and exploration now required in the high-stakes, high-profit quest for oil.

On this day, the ship was drilling in two miles of water and into the seabed below. It can go down a total of 30,000 feet -- nearly six miles. Using remarkable technology, the crew can home in on the precise spot where geologists think there may be oil or natural gas. The drill ship and the crew cost the exploration company, Anadarko, $300,000 a day.

But here's the number that became my real frame of reference: The world uses 84 million barrels of oil every day. Every day. And demand is expected to grow by 40 percent in the next 20 years as America's appetite grows and China and India modernize.

As I traveled, I kept asking myself, "Where will it come from?"

The answer: Everywhere.

It will have to come from the giant oil fields in the Middle East as well as remote locations producing what's called "unconventional oil."

So from the Gulf of Mexico off the Louisiana coast, my next stop was the frigid extremes of northwest Canada and Alberta's vast oil sands. This, too, is hostile territory. But now the region produces one million barrels of synthetic crude every day. The oil sands cover nearly 58,000 square miles. Geologists think the oil could last for 100 years and they've barely scratched the surface. But what a scratch it is.

The oil sands are extracted in huge open pit mines -- vast holes in the ground. In the mine I visited, there are miles of roads, hundreds of pieces of equipment and more places where they dig and dump than I could see. I kept picking up chunks of earth. It smells like asphalt. I stood down in the pit as the giant shovels clawed the earth. I climbed up into the cab of the largest truck in the world -- three stories high, able to haul 400 tons of oil sands at a time. Behind the wheel was a petite young mother of two. She works 12 hours a day. It's the best job in Fort McMurray, Alberta.

Again, I was struck by the vastness of it all, by the constant motion, constant work. It was like an ant colony on steroids -- indicative of an overwhelming instinct to toil and an insatiable demand driving it.

Are there alternatives? Yes, and I saw one of them in the most surprising place I visited: Brazil, where sugar cane covers millions of acres. "A green ocean" was how my Brazilian host described it. About half of it becomes sugar. The other half becomes ethanol for cars and trucks. "Alcool" was sold at every gas station I saw. It is cheaper than gasoline and when you fill the tank, it smells like molasses.

The real eye-opener: The car I drove, a made-in-Brazil Chevrolet, was a 'flex fuel' vehicle that can run on either gasoline or ethanol. Three quarters of the cars sold in Brazil are now flex fuel vehicles.

And an astounding 40 percent of the transportation fuel used in Brazil is ethanol. Brazilians say within the next year, they won't need to import a drop of oil. Independence. One official who was in on the ethanol program in its earliest days 30 years ago smiled impishly and told me, "We won."

In the U.S., ethanol represents only 3 percent of the fuel we burn.

I also saw prototype hydrogen vehicles, plug-in hybrids and other things. But at the end of it all, I realize we'll need oil for a long time.

There's a lot of it out there. But the supply chain is stretched thin and demand is growing rapidly. Environmental concerns deepen. We are vulnerable. We know we have to come up with another way to power the planet.

How long we have is the big question. It's time to get serious.

............

POLL: MOST AMERICANS FEAR VULNERABILITY OF OIL SUPPLY
From Frank Sesno
CNN
Thursday, March 16, 2006

http://www.cnn.com/2006/US/03/16/oil.poll/index.html

WASHINGTON - Although Americans don't believe the country faces an imminent energy crisis, most believe there are "major problems" --- from potential oil shortages to possible terrorist attacks -- and they are harshly critical of the leadership on the issue from the White House, according to a new CNN/USA Today/Gallup poll.

Despite President Bush's focus on energy in his State of the Union speech, in which he said America is "addicted to oil," those polled gave the president low marks on the issue.

Seventy-one percent said Bush is not doing enough to solve the nation's energy problems. Only 24 percent said Bush is doing enough.

And Americans believe there is plenty of blame to go around, with oil companies getting an even larger share of the blame than the White House.

Eighty-nine percent of those polled said oil companies deserve a great deal or some of the blame for current energy problems, compared to 81 percent who felt that way about Bush.

Nearly one in three said oil-producing countries deserve a great deal of the blame, while 27 percent put the blame on automobile companies. One in every four of those polled said American consumers bore the brunt of the blame.

The poll, which was released Wednesday afternoon, also indicates that roughly three out of four Americans -- 77 percent -- fear the supply of oil will not be able to keep up with global demand. Three in 10 said they believe the world will run short of oil within the next 25 years.

That perception is in conflict with forecasts from the Energy Information Agency, the official arm of the U.S. government that keeps energy statistics. The agency estimates that the oil supply will be able to meet the demand, which is expected to skyrocket by 40 percent in the next 20 years --- driven by rising U.S. consumption and booming economies in China and India.

The CNN/USA Today/Gallup poll found that 12 percent consider the current energy situation in the United States a crisis. At the same time, 49 percent said there are major problems in the industry --- citing the cost and availability of electricity, gas, natural gas and other forms of energy. Thirty-five percent said the industry has minor problems.

The poll also suggests that nearly three-quarters of Americans fear that terrorists will attempt a major attack on oil installations somewhere in the world within the next year.

The poll was conducted with 1,001 adults between Friday and Sunday. The questions about the current energy situation had a sampling error of plus or minus 3 percentage points. The question about Bush's handling of the issue and the others relating to who is to blame had sampling errors of plus or minus 4.5 percent.

The poll comes after top oil executives earlier this week appeared before Congress to defend their record profits and explain the consolidation that has taken place in the industry. The top five oil companies earned more than $100 billion last year.

Sen. Charles Schumer, D-N.Y., accused the oil companies of making America's energy problems worse.

"In his State of the Union address, we heard the president say that America is addicted to oil. If that's so, then these behemoth oil companies are some of our biggest dealers," Schumer said.

Shell Oil CEO John Hofmeister fired back, blaming Hurricane Katrina: "When supply is reduced and demand is not reduced, the consequence is higher prices. In a free market that's how it works."

..........

Watch: 'Living on an illusion' http://www.cnn.com/CNN/Programs/presents/

Watch: 'Long war of the 24th century' http://www.cnn.com/CNN/Programs/presents/

Watch: Are big cars irresponsible? http://www.cnn.com/CNN/Programs/presents/

Calculator: How much are you spending on gas? http://www.cnn.com/CNN/Programs/presents/

Gallery: Alternative fuel
http://www.cnn.com/CNN/Programs/presents/


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