on February 2, 2007
As an environmental manager, I am so tickled when I find real discussion without an ideological agenda! (I call myself a radical moderate.) Ms. Margonelli is a true journalist. Her structure - Chapter One at the gas pump, back through the tanker trucks, refineries, drilling, geology--is a marvelous construct. Whle well-grounded in facts and engineering, this is somewhat a social history, and emphasizes profiles of people from the petroleum industry to illuminate the issues. I can't verify her extensive footnotes, but her lack of advocacy of a particular world-view (e.g., global warming, or faith in market forces) is refreshing. I am from West Texas so can verify the accuracy of these delightful depictions 'awl-fild trash'. Her statistics provide great insight into our energy challenges. Don't let her lose points in the non-fiction realm for her wry humor!
on August 19, 2008
I read this book as part of a review group associated with the petroleum industry. I have over twenty years of experience in the refining industry, so most of the information this book contains in that regard held little new information. However, it's important to point out that the book also didn't contain any misinformation. My experience with production and trading is limited, so I picked up a great deal of information on those aspects. If you are not familiar with the oil and gas industries, and would like to know the "how and why" of them, I would recommend this book highly. The author not only discusses domestic (US) production and supply, but also foreign areas, such as Nigeria. In short, I think this book represents the broadest, and easiest, source of information a lay person would find useful as a starting point for exploring an industry that affects all our lives.
For all its constant appearance in news of the business and political worlds, oil as an economic and chemically transformable commodity is remarkably little understood by the average person. Most of us have never seen a barrel of oil or an oil pipeline. Most of us have never watched oil being cracked in a petrochemical plant to produce gasoline or any of the dozens of other byproducts that permeate modern life. Most of us don't even know how much oil is contained in a barrel, or how much gasoline can be derived from a barrel of black gold. At most, we pull up at the pump and open our gas caps and our wallets. With OIL ON THE BRAIN, author Lisa Margonelli opens the doors into perhaps the most geopolitically and environmentally important world of the 21st Century, the mostly invisible world of oil.
Structurally, Ms. Margonelli starts at the familiar gas station pump and moves successively backwards through the distribution, production, and exploration chains. At the earliest stages of her exposition, most of which take place in the continental United States, she captures her subject matter through a personal prism - individuals who represents that particular stage in the process of bringing gasoline and heating oil to the end consumer. Thus, we learn about gas station profitability from Michael Gharib, owner of the Twin Peaks gas station in San Franciso, gasoline distributorship from the friendly folks at Coast Oil (owner David Mitchell, dispatcher Chris, and driver/hauler Roger), and refining from optimization manager Ken Cole at BP's plant in Carson, CA. Finally leaving California, we move on to lessons in drilling from fourth generation oilman C.D. Roper somewhere in the wilds of East Texas, the questionable economics of the Strategic Oil Reserve in Louisiana from some nefarious deep cover security types with names like Mike and Buddy, and the commodities futures market from Tom Bentz, a senior energy analyst with BNP Paribas in Manhattan.
Having apparently exhausted oil and gas operations in the U.S. Ms. Margonelli proceeds offshore to the non-domestic sources of crude -- Venezuela, then Chad, Iran, and Nigeria - before closing in China, the world's most voracious new consumer of oil and the U.S.'s perceived strongest new competitor for the world's energy resources. To her credit, the author moves from domestic operations to the global petroleum stage while still retaining a human touch with her subject matter. Rather than falling into an expository trap and producing a dissertation on global petroleum economics, Ms. Margonelli continues her story through that of individuals involved in, or affected by, the oil industry. Of course, one cannot talk about Venezuela without dealing with Hugo Chavez, nor can one talk about oil in Africa without addressing the manner in which people's lives and homes in those countries have been ruined by Exxon, the World Bank, and Royal Dutch Shell in the cause of providing cheap gas to American SUV drivers.
Throughout her book, and particularly in its later chapters, OIL ON THE BRAIN offers remarkable insights into the global war over access to oil. The Venezuelan chapter presents the disturbing concept of external locus of control, the feeling of powerlessness ("The world is so strong, and I am so weak") that overwhelms and paralyzes the victimized villagers in these countries whose lives and livelihoods are sucked dry while the crude is being sucked from the ground beneath them. The Chad and Nigeria chapters reveal the failures of petrostate formation, the utter inability of corporations and governments to turn resource extraction into meaningful national development models due to incompetence, corruption, or outright indifference, and the Iran chapter tells the little known story of the U.S. government's shameful involvement in Operation Praying Mantis, a military action whose justification as self-defense was denied in 2003 by the International Court of Justice.
For all these details about the world of oil, Ms. Margonelli's most telling chapter may well be her last - China. Not because of China's seemingly insatiable new appetite for oil, but because of a concept car called the Asprire and Project 863. While the West remains stubbornly locked into a psychology of oil dependence that can barely see past corn-based ethanol, China's young entrepreneurs are working feverishly to develop the car(s) of the future - electric, hydrogen, or hybrid. In three intense months and with just $60,000, a group of students from Wuhan Institute of Technology developed a prototype, two-person commuter car that, as the author describes it, "is for the other 88 percent" of the world's population who don't already own cars. As Ms. Margonelli makes eminently clear, the real "China threat" isn't competition for scarce oil, it's having the entire auto industry be leapfrogged by some bright young engineering students in Wuhan.
"Oil on the Brain: Adventures from the Pump to the Pipeline" is the story, from beginning to end, of how oil is pumped, traded, refined, distributed and sold to the public. In addition, the book covers the conditions, both political and cultural, in a number of oil producing countries.
The book is divided roughly in half. The first half follows the flow of fuel from its start in the ground through the various handlers until it is pumped into your car. The author, however, doesn't just recite a litany of facts. She narrates well and adds information about the processes that are not common knowledge. The second half of the book is a look at where oil originates and the conditions in those countries as they relate to oil. And, the reality is that there is a socio-economic result of discovering and pumping oil from the earth.
The author does a wonderful job of weaving a story out of a number of rather dull facts and makes the book interesting, as well as informative. Her writing style reminded me of the books by Eric Schlosser or Barbara Ehrenreich.
After reading the book I found myself looking at gas stations in a new light and thinking about what I was doing every time I pulled up to the pump. I also noticed I was taking a few extra steps to try to cut my consumption a little. I think this book has a powerful message that needs to be read by the oil consuming public which may help to change their purchasing habits.
on April 24, 2007
This was an enjoyable book to read because it presented an intriguing subject, it presented the subject in an even-handed manner, and it was well-sourced. Each chapter contained numerous footnotes that provided the reader the opportunity to consult other publicly available resources to learn more about the subject. I personally enjoyed the behind-the-scenes look at the independent gas station, refinery, delivery business, and Strategic Petroleum Reserve, as it provided a comfortable understanding of how these businesses operate and corrects mischaracterizations that could have easily formed about these entities. I learned especially of the chemical similarities of branded gasolines, as well as the tiny profit margin earned by gas stations. I recommend this book with pride.
on September 7, 2009
If you think the Strategic Petroleum Reserve sounds deadly dull, read this book and be surprised. Along with the chapters on Venezuela, Chad and Nigeria, this material will give you a more connected understanding of how oil influences global politics and economics.
This is my favorite type of book: a painless and fun way to learn important stuff. It's comprehensively researched and usefully annotated, and the perspective is balanced.
There is no particular failing that causes me to give 4 stars rather than 5. I would only give 5 stars to one of my dozen or so favorite books of all time. This book is merely excellent.
on July 11, 2007
In President Bush's 2006 State of the Union address, he spoke of America's "addiction to oil." In "Oil On the Brain," author Lisa Margonelli explains how we feed this addiction. Working backward from the gas station through the pipeline to the drilling rigs, and the oil fields of Venezuela, Chad, Iran and Nigeria, Margonelli narrates this journey all the way to China, which has become the new challenger to America's addiction with its "go-go growth" and its rush to put its 1.3-million population behind the wheel.
The early chapters of the book, before Margonelli turns to America's intervention in overseas petro-states, are my favorites, particularly the chapters on the California refinery and the East Texas drilling rig. The author has an uncanny ability to take a complicated process and boil it down for the lay reader. I now understand it's the size of the molecules in the crude that determines the octane, and how a shutdown at a refinery happens and why. I learned about the invisible penny that's built-in the price of gasoline, the 9/10 nobody sees that is worth $1.26-billion a year to the oil industry.
As Margonelli rides along on an oil tanker, she explains the strict regulations under which these drivers operate. In these chapters, I discovered how slowly oil moves inside a pipeline, less than eight miles per hour through the 161,000 miles of pipeline inside the United States. She arrives on the drilling rig in Freestone County, Texas, just in time to watch the ballet dance called "tripping the bit" where the driller, the tool pusher and the hands pull up a worn-out drill bit. The process can take as long as four hours. It's in this section that I also learned Florida and California have banned offshore oil rigs on their coasts, so Texas and Louisiana take up the slack.
The chapter on the U.S. Strategic Petroleum Reserve segues into the importation of oil. Sixty percent of American oil is brought in from other countries, often from places that are hostile and strife-torn, run by governments corrupted by the oil it exports. It is in this section of the book that the reader begins to understand the true price of oil and how it compromises our country both ethically and economically. Not only are wars being fought globally for the precious few oil reserves still available, but big oil companies are building hospitals and schools in exchange for a chance to drill in certain promising areas of Africa and the Middle East.
On a smaller scale, villages and tribes are at war against each other over mineral rights, piracy is abounding and terrorism is growing, all with the oil industry and the incredible sums of money it involves at the root. In Nigeria, one terrorist is quoted as saying, "What I believe is that one gunshot is wordier than a thousand words."
This is a remarkable book with a powerful message, but written in a smart, open-minded, entertaining style that makes it a real page-turner. It should probably be read by anybody who stops for a fill-up, if for no other reason than to understand what all has gone into getting that gallon of gasoline into your tank.
on August 20, 2007
In the interest of full disclosure I want to start off by saying that I worked in the oil industry for 36 years and, in fact, my school years were spent in a community that was very largely dependent on oil refining for its livelihood. So, when it comes to the industry, I admit to being a little bit prejudiced in its favor and more than a little defensive when I sense that it is being unfairly criticized. The industry most certainly deserves some criticism when it comes to its past and to its present and I don't deny that. It's all of the nutty conspiracy theories that raise my blood pressure at times.
Lisa Margonelli's Oil on the Brain is the author's attempt to explain the price of a gallon of gasoline at the pump by tracing that refined product all the way back to its source. Margonelli came to her subject with the very limited understanding of the oil industry that the average American consumer has but, by spending time with industry people working in all of its many branches, she gathered enough information and insight to write an entertaining explanation of how gasoline is priced in today's market.
All of us, even oil company employees, shake our heads and cringe when we roll up to the gas pump for another painful purchase of enough gasoline to refill our tanks. That's why Margonelli begins her story at one of California's multi-pump convenience stores where she spent enough time to get a good feel for what it is like to be the retailer of a necessity for which the consumer feels gouged at every purchase. From there, she traces the flow of gasoline backward to the distribution system that includes truckers and pipeline systems, even riding with one trucker as he carried his dangerous cargo from its collection point to several California retailers.
Of course, she was still nowhere near the ultimate source of the gasoline, so she continued her backward journey and spent several days inside a California refinery where she watched the process of turning crude oil into its various finished products, including gasoline. She completed her journey by traveling to Freestone County, deep in East Texas, where she was welcomed onto one of the dozens of drilling rigs in the area.
Oil on the Brain does a fine job of simplifying and explaining the extremely complicated process of finding and producing oil and gas and I believe that most readers will gain a new appreciation for the complexity of such a risky undertaking. Margonelli also spent some time at the Strategic Petroleum Reserve located on the Texas Gulf Coast and in New York with the oil traders on the floor of the NYMEX. Those are particularly interesting chapters, especially the one concerning the NYMEX traders because it goes a long way in explaining why the price at the pump fluctuates as drastically and as often as it does.
The second half of Oil on the Brain recounts Margonelli's travels to Venezuela, Chad, Iran, Nigeria and China. All of these countries other than China are oil exporters and Margonelli details the effects, both good and bad, that impact the citizens of those countries when their governments become so dependent on the exportation of oil for their survival. Needless to say, the promises made to those citizens seldom morph into anything resembling the benefits listed by the oil companies because the local governments manage to squander and steal for themselves a large percentage of the new money that flows into the producing countries. Margonelli visited China to see for herself the rapid economic growth there that is causing the huge demand in oil imports that is so adversely impacting today's oil price.
I recommend this book to anyone who wants to understand how the search for a predictable oil supply impacts world politics and the lives of all of us. As Margonelli says in one chapter, the hidden cost in each gallon of gasoline might be as much as $5 per gallon if one includes all of the tax money being spent by the United States to make it possible to keep the oil flowing in this direction. That includes money spent on the military, foreign aid, and homeland security spending that has largely become necessary because of this country's presence in the Middle East in search of oil.
on May 8, 2007
Margonelli spent three years traveling around the world documenting different stages in the oil flow. The book can be divided in two parts, the first part in the USA in six chapters: 1) gas station, 2) oil delivery trucks, 3) oil refinery, 4) oil drilling, 5) oil futures market, 6) strategic oil reserve. The second part examines overseas oil sources: 7) Venezuela, 8) Chad, 9) Iran, 10) Nigeria, 11) China. Within each chapter is a human-interest story with Margonelli interacting with a main character (gas station owner, drill operator, oil warlord, Iranian minister of oil, etc..) and tangents to highlight encyclopedic facts about the history of the place or institution in a sometimes overly-stylized magazine-prose.
I found the later overseas chapters the most interesting, to learn about the history of oil states and how interconnected everything is. The vast majority of the worlds oil is owned by governments, and not by the Exxon's of the world which only have about 20%, thus Margonelli's focus on the oil states was spot on. In regards to who is to blame for high gas prices in the US, the best theory was from a oil trader in NYC who says its simple supply and demand, China and other countries are demanding a lot more oil.
4 stars: stylistically the prose was inconsistent. At times it flowed well, other times it was choppy with halting sentences, or tried too hard to be clever and endearing (how many ways can you say "the bolt is as big as (fill in the blank)") - it felt like two different people worked on it. I also thought some of the human interest stories were unnecessarily unsympathetic. The excellent information about oil made it worth the trip, Margonelli's three years traveling around the world to remote and often dangerous places (and probably often boring) has been a great help in understanding first-hand what is happening.
Lisa takes readers on a three-year 100,000 mile roundabout trip from the oil well to the pump. During this trip she not only keeps readers' interest, but is informative as well.
At the pump we learn that 20 lbs. of pull takes the nozzle off the pump (preventing disaster to those forgetting to hang up the nozzle), backing over the pump causes it to easily break off at the base and automatically shut off, cell phones do not set off explosions, and sliding across the seat before getting out is not a good idea.
At the tank farm, we learn that many refineries making California's uique blend are at least 20 days away by tanker - Trinidad, Finland, and Newfoundland. Pipelines are now at 90-96% capacity; the fuel moves at only 3-8 mph. We will need 37% more gasoline by 2025, but only 8,000 of our 16,000 miles were built within the last 20 years - probably because another 10,000 miles will cost an estimated $1 trillion.
Next at the refinery, readers find out that those tall towers (fractioning) separate components by boiling point into 40 different trays; steam is the key ingredient in the process - 1.5 gallons of water is required for every gallon of crude. The Carson refinery near L.A. supplies nearly 40% of the city's needs and is investing $1 billion to store CO2 in underground wells; other environmental investments will cost another $300 million. Reducing gas flaring increases profits and helps the atmosphere. Worldwide, refineries are at 97% capacity - a major reason new ones are not being built is that profits are much greater for acquiring oil and refining it, though BP still earned $11.22/barrel in '03 on the West Coast.
Ninety percent of U.S. drilling rigs are looking for gas. Diesel train engines (usually multiple) are used to power the drill, and the unit costs $70,000/day. Twenty years ago only 10% of holes were successful; now 90% are - aided by detailed seismic maps and near real-time analysis of bit location. Workers are paid $13/hour, work 12 on, 12 off for 14 days, then 14 off; turnover is high. The International Energy Agency estimates raising the average well recovery rate from 35 to 40% would create more new oil than now in all of Saudia Arabis. Persian Gulf pumping costs can be as low as $3/barrel, vs. up to $35 in the Gulf of Mexico; another study concluded U.S. oil is 69X as expensive to obtain as that in Saudi Arabia.
Major oil-producing states tend to not invest in other industries, avoid taxing the populace, and are autocratic and corrupt. (So much for "trickle-down" economics?)
In 1970 the U.S. supported the Shah's plan to build nuclear power plants in Iran; in 1976 we also supported them obtaining a nuclear reprocessing facility for plutonium. Fifty-eight percent of Iran's budget goes to organizations headed by clerics answering to the supreme leader - they have the ability to start protests, provide patronage, and suppress dissent. The poor (30-50% unemployment) receive subsidized food; all have access to subsidized fuel. Forty percent of the world's traded oil passes through the Straits of Hormuz. U.S. sancionts keep U.S. companies from helping Iran maintain and expand oil production, while giving China free access. And then there are a few problems in Iraq as well!
Finally, on to China. By 2025 it will import possibly as much as the U.S. today. Meanwhile, it has set auto efficiency standards 5-10% higher than the U.S. (also boosts ability to sell autos in Europe), just developed a hydrogen-powered mini-truck for a cost of $7,000-$9,000, and set another goal for 15% of its energy from renewables by 2020.