Candidates off on oil by $350 billion ... or so

In all likelihood, the number had its genesis with Pickens. Since June, he has promoted his “Pickens Plan” for U.S. energy independence; it relies heavily on expanding domestic wind energy and natural gas projects.

Pickens has cited the $700 billion figure for imported oil on his Web site, in TV commercials and testimony before Congress. He plans to invest $58 million to promote his plan to build wind farms and expand natural gas production with an aim to reduce reliance on foreign oil. He has leased hundreds of thousands of acres in West Texas where he plans to erect 2,700 wind turbines to produce power for Dallas and Fort Worth.

But his Web site makes clear the oil reference is to all petroleum imports, not just from nations that, according to McCain, “don’t like us very much.”

According to the federal Energy Information Administration, last year the U.S. imported nearly 4.9 billion barrels of oil and refined products, 16 percent of it from the Persian Gulf and 10 percent from Venezuela, whose president has been hostile to the United States. Neighbors Canada and Mexico, by comparison, accounted for 30 percent of all such imports with Canada at the top.

Brian Bradshaw, who works with Pickens in Dallas, confirmed that the Pickens group produced the $700 billion figure to “draw attention to how big a problem this is.”

Pickens’ analysis is based on calculations that sharply overstate the cost of petroleum imports, both crude oil and refined products.

For example, the calculation used a crude oil price of $145 a barrel — the peak price of premium, light crude on the New York Mercantile Exchange late last June. Oil prices on that exchange hovered around $70 a barrel Thursday.

The Pickens group simply multiplied the $145 a barrel New York exchange cost of crude oil and daily costs of refined products by 365 to get an annualized number. The result was about $670 billion and “we rounded up to the even number,” recalled Bradshaw.

But much of the country’s imports are heavier crude that doesn’t cost nearly as much as the West Texas premium crude traded on the New York exchange. The price of imported oil last June, for example, often was $13 to $28 a barrel cheaper than what was traded on the New York Exchange, the AP found.

At the time the Pickens group made its analysis, at the peak in June, actual spending on oil and refined product imports for that month was $46 billion, according to government import figures, equivalent to an annual $552 billion.

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