Oil on the Brain: Adventures from the Pump to the Pipeline

In the interest of full disclosure I want to remind everyone 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.

Rated at: 4.0