Oil Storm

Oil Storm: Made-for-TV Reality
A Daily Reckoning “Side Bar”
by Kate Incontrera

Life imitates art…or at least a made-for-TV movie…

Hurricane Dennis… Katrina…Willma…  all category 4 hurricanes, blew through BP’s oil and gas fields, destroying several of its deepwater oilrigslocated almost 200 miles southeast of New Orleans.

Does this situation sound familiar?

In a recent Daily Reckoning weekend edition, we looked at “Oil Storm,” an FX made-for-TV movie. This “mock-umentary” looks at a series of worst-case scenarios, one being a category four hurricane destroys a vital pipeline in the Gulf of Mexico, driving oil prices up to, at one point, $153 a barrel.

Oil Storm: Cutting Our Life-Blood

Oil has been called “the life-blood of America.”What happens if it suddenly runs dry?

That was the question posed by the cable network, FX, in a recent made-for-television movie, “Oil Storm.” Done in a “mock-umentary” style, “Oil Storm” depicts the consequences of America’s reliance on oil in a series of delectable “what if” worst-case scenarios.

If you didn’t see the movie (when it aired in mid-June), here it is in a nutshell: a category four hurricane destroys a vital pipeline in the Gulf of Mexico…panic sweeps of the nation…speculation drives the price of crude higher and higher…U.S. government turns to Saudi Arabia for oil…Saudi extremists commit terrorist attacks, killing 300 American oil workers…America sends troops to Saudi Arabia…still major lines at gas stations…Americans begin to turn against each other…the U.S. government decides to turn to Russia for oil…the Russians help in return for an investment in the upgrade of their pipelines…oil falls from it’s high of $153 a barrel down to around $77…and all is right with the world.

The steadily rising gas price results in major loss of American lives, a U.S. military expedition to the Middle East, a major depression, and martial law in effect across America. This is, of course, a gross oversimplification. Could these situations occur? Sure. Maybe not. We don’t know. But the chain of events was outlandish enough… we thought maybe one of the Daily Reckoning promotional writers might have had something to do with the plot!

The “mock-umentary” is a bit absurd. But it’s also fun. And the truth is, for the first time, given China’s demand for energy is growing by leaps and bounds (with India not too far behind), America has major competition for energy resources.

Oil Storm” reinforced one of our major themes here at the DR: the United States depends daily on the kindness of strangers to bail them out. The strangers, in this case, ended up being the U.S. long-time cold war foes Russia. Oh, the irony!

Oil Storm: Gloomy – Even For Us

But, we wondered, what would have happened if we had no other country to rely on?

What “Oil Storm” fails to mention are viable alternatives to oil. There are no mentions, for example, that U.S. companies are making huge leaps in “clean-coal technology;” a way for America to utilize a natural resource that we have 254 billion tons of to help ease the reliance on oil. Not a peep about the immense supply of uranium in the U.S and Canada, or on the technological advances and increased safety measures in nuclear power. Liquid natural gas? Yeah, right!

In a movie – that even your doom editors at The Daily Reckoning found to be “gloomy” – the United States’ dependence on oil was a fait accompli. Their solution? Get more oil.

Hmmm…and the final shot was a SUV nonchalantly driving down the street, relieved that gas prices had dropped. Did we miss something?

Kate Incontrera
The Daily Reckoning

P.S.The recent hurricane’s did not cause damage at the level of the disasters that ensued in “Oil Storm,” but the storm did force the evacuation of 445 rigs and platforms, according to a report from the U.S. Minerals Management Service.

The report went on to say, “The evacuations prompted the shut-in of 96.2% of daily oil production in the Gulf of Mexico, as well as 62.4% of daily natural-gas production.”

Daily Reckoning Commodities expert Kevin Kerrtold MarketWatch: ” [Although] workers should be returning to their rigs and platforms and production should resume pretty quickly, we are only at the start of hurricane season, so the worst may be yet to come for the Gulf Coast. The potential for a catastrophic hurricane is very high.”

“Imagine if this were a category 5 hurricane. This was only a minor hit… the Daily Reckoning article and FX TV movie are more realistic than some want to say.”

Oil Storm –Directed by James Erskine and written by Erskine and Caroline Levy, it originally aired on FX Networks on June 5, 2005, at 8 PM EST.

Related Articles:

An Oil Boom – Without The Oil
by Byron King “I cannot speak for the Almighty, but I believe that this boom has more to do with the monetary expansion of Mr. Alan Greenspan, and the predictions of a fellow named Dr. M. King Hubbert, than with the Big Guy upstairs.”
In The Aftermath, Part I
by Justice Litle “The assessment of the situation is a little less pessimistic. It looks like damaged ports and refineries may be brought back on line faster than feared, and worst-case scenarios may yet be avoided.”
To Pause, or Not to Pause
by John Mauldin “There are more and more calls for the Fed to pause in September. Clearly the markets are expecting them to do so, and this has given a boost to the stock market.”

Other Useful Links:

Oil Storm (2005) (TV) – Cast, Crew, Reviews, Plot Summary, Comments, Discussion, Taglines, Trailers, Posters, Photos, Showtimes, Link to Official Site, Fan Sites.
Oil Storm – Wikipedia, the free encyclopedia – Oil Storm is a 2005 television docudrama portraying a future oil-shortage crisis in the United States, precipitated by a hurricane destroying key parts of …
The History of Investing in Oil – A Daily Reckoning White Paper