Digging deep for America's oil riches

By Humphrey Hawksley BBC, Texas

President George W Bush's ambitious new energy policy - in which he states his aim is to reduce the amount of oil flowing in from the Middle East by 75% - is already stirring some of America's oil men to rise to the challenge.

Phil Kendrick remains optimistic about US oil reserves

The Texan sky was filled with a huge late afternoon light.

The land was arid with cactus and brown grass, and a wind so strong that the dust it whipped up stung your face.

Phil Kendrick, a big man in a dark red chequered shirt, bent down and dipped his index finger into a pool of ink-black liquid.

"Smell that," he said, "isn't that sweet? That's oil. I tell you this is going to be a good, good well."

"So does that make you an oil baron?" I ask.

"No. No. I'm not an oil baron. I'm an independent stripper well operator. I'm as low on the totem pole as you get."

He looked towards the small, creaking pumps which dotted the landscape.

"But there's a lot of us. Put us all together and we make a big contribution to what this country needs."

Import dependency

Phil is 79 and carries the glint of a gambler looking for the next big win.

On the wall of his living room is a long black and white photograph taken in 1918 of the first well his father dug.

"He worked for the Revenue at the time," Phil chuckled. "During the week he collected taxes and at weekends he went out looking for oil."

"America was worried about oil then. We'd only found it in Pennsylvania. Henry Ford said to John Rockefeller: 'I'll keep building those cars as long as you keep looking for the oil.'"

Suddenly, men like Phil Kendrick have become fashionable.

Oil companies have admitted that the easy-to-pump oil is running out. They are having to head for less accessible supplies.

Sixty per cent of America's oil is imported costing $12bn (£7bn) a month.

And the country has become aware that much of it comes from Islamic nations where many people are not exactly pro-American right now.

Addicted to oil

So in his State of the Union address, President Bush - who incidentally used to be an independent Texan oil operator himself - spelt it out.

There are 250 million cars in America... converting those to fuel efficient vehicles will take decades and cost billions Robert Bryce, Energy Tribune

"America is addicted to oil," he said, "which is often imported from unstable parts of the world."

He wants an end to America's reliance on oil.

"Hogwash," said Robert Bryce, managing editor of the magazine Energy Tribune, sitting in a deep leather chair in the Petroleum Club in Houston, which they call the oil capital of the world.

"All the talk from Washington about independent energy is just politics. It's not based on reality.

"There are 250 million cars in America," he said. "Converting those to fuel efficient vehicles will take decades and cost billions. Meanwhile, people still have to drive to work."

'The big elephant'

Just across town, another 79-year-old oil man, Gene Van Dyke, pored over a map of Africa where his company, Vanco Energy, owns deep water exploration leases.

Gene Van Dyke looks at the president's address as a new business opportunity

He is looking for a huge discovery which he calls "finding the big elephant".

"There's plenty of oil around," he says, "it's just more difficult to get to."

"What do you hope for?" I asked.

He turned over a sheet of paper and jotted down figures on the back.

"Best case is 12 billion barrels. Worst case, I reckon, is 1.2 billion. But even that at $50 a barrel, will bring in more than $50bn."

But 1.2 billion barrels would keep the US running for just over two months.

"So that wouldn't help the oil shortage much," I ventured.

"Maybe not," he said slowly, until his eyes lit up. "But it'll certainly make a lot of money for Vanco Energy."

Washington talk

The majors - that is Shell, Exxon, BP and others - do not do much wild cat exploration, as it is known.

Everybody wants a slice of the action Phil Kendrick

It is too risky and expensive.

They leave it to oil men like Gene Van Dyke and Phil Kendrick who sell the rights on once they strike it rich.

Thirty or so years ago, the majors pulled out of America because all the easy oil and gas had been found.

A few months ago, one of them - Shell - moved back into north-west Texas.

"They're like sheep," says Gene. "If one comes back, they'll all come back."

I went with Phil Kendrick to look at an exploration rig.

It was dirty, noisy and dangerous. Nothing much had changed since his father was drilling almost a century ago.

"You can't hire a rig in Texas now," said Phil, "they're too much in demand. Everybody wants a slice of the action."

"What do you think," I yelled above the noise, "about all this talk in Washington on... "

And the wind took my last words.

But Phil guessed what I was talking about.

"1950," he shouted. "That's when I first went to Washington, telling them they'd better look for more oil and gas here because those places overseas could be unstable."

"Did they listen?" I asked.

"No. They didn't." He roared with laughter. "But they're listening now."

From Our Own Correspondent was broadcast on Saturday, 4 February, 2006 at 1130 GMT on BBC Radio 4. Please check the programme schedules for World Service transmission times.