The True Price of Oil

Written by Sylvia Prehmus, ESLLC 2015-2016

Every time you fill up your car or in many places turn on your lights, you give a little more money to the oil industry. When regular gas cost $4.00 and more a gallon, the price seemed reflect the effect of oil on the world. However now, with gas just over $1.80 in Denver it is easy to forget how terrible oil can be. Without high prices driving people away from the pumps and encouraging car pools and hybrid vehicles it is easy to ignore what the true price of oil is.

Let’s start very basic. A barrel of oil today costs $39.78 according to NASDAQ, which is less than half of what it cost this time last year. That may sound like a great deal for consumers but that, as with gas, is not the real price.

First there is transportation. Most oil these days is shipped either through pipelines or by rail. Though the engines often run of diesel fuel and are therefore not nearly as polluting as gas driven trucks, pipelines are hardly environmentally friendly either. Pipelines disrupt more habitat than any other method of transportation except boats even though boats spill the least oil per ton-mile, the common unit by which oil transportation is measured. On that lovely segue let’s talk about oil spills.

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Oil spills occur on land and in the water. While the death toll tends to be higher for spills on land, the environment price is far more significant for the spills such as those in Prince Edward Sound in 1989 by the Exxon Valdez tanker and the 2010 Gulf Spill. Though over time the size and number of oil spills has decreased the effect on the environment is still incalculable.

For the Exxon Valdez, then the largest environmental disaster in US history, estimated at more than $7 billion dollars was spent in clean up efforts of which Exxon $4.7 billion in clean up and punitive damages. The rest of the money came from environmental and governmental agencies trying to mitigate the disaster’s impact. Nevertheless, the spill continues to have an impact in the sound today. The accident devastated tourism and fishing industries causing locals to loose more than $300 million dollars in economic revenues. Loses in recreational fishing two years after the spill were estimated at $30 million. These numbers do not include the hundreds of thousands of sea birds, hundreds of sea otters, seals, and bald eagles, as up to 22 killer whales killed because of the toxic crude oil.

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The BP Gulf spill was even bigger with more than 300 million barrels of oil thought to have leaked into the sea. Though the US government has tried to come up with a monetary amount to account for all the damage a “report from the National Research Council said the… efforts to put a price on damage… failed to capture the full extent of the environmental and economic losses in Gulf waters and coastal areas, fisheries, marine life, and the deep sea caused by BP’s runaway well.” Though BP has spent $25bn in clean up and owes as much as $47bn in fines and economic settlements, this hardly accounts for the hundred of die-offs in protected species including dolphins or the damage done to protected wet-land and coastal habitat.

So far this cost still ignored the projected cost to agriculture and fishing due to the carbon dioxide produced by burning oil either in cars or for electricity generation. These depend much on individual choices about energy consumption, but the net accumulation of carbon dioxide will devastate the planet for the next generation. And still this ignores the human cost of oil, in that much of the oil that the US buys comes from countries with at best poor human rights records, where dictators stay in power thanks to their country’s supply of the natural resource.

In short, next time you reach for the nozzle to fill up your tank, remember that you are not paying $35 bucks to get to work. You are paying with the lives of millions of animals and people and destroying the environment for the next generation. It is a price beyond pure dollars and the cost is growing every day. Are you still willing to blindly pay it?


“Commodities: Latest Crude Oil Price & Chart.” NASDAQ.com. NASDAQ, 18 Apr. 2016.           Web. 18 Apr. 2016.

Conca, James. “Pick Your Poison For Crude — Pipeline, Rail, Truck Or Boat.” Forbes.    Forbes Magazine, 26 Apr. 2014. Web. 18 Apr. 2016.

Goldenberg, Suzanne. “US Government Assessment of BP Oil Spill ‘will Not Account   for Damage'” The Guardian. Guardian News and Media, 11 July 2013. Web. 18   Apr. 2016.

“How Does GasBuddy Work?” Denver Gas Prices. Gas Buddy, n.d. Web. 18 Apr. 2016.

Lyon, Susan, and Daniel J. Weiss. “Oil Spills by the Numbers.” Name. Center for          American Progress, 30 Apr. 2010. Web. 18 Apr. 2016.

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