My mom out in California is elated -- gasoline prices in her neighborhood are below $4 a gallon for the first time in four months. Less so are the world's petro-rulers, who are watching the price of oil -- their life blood -- plunge at a rate they have not experienced since the dreaded year 2008. Industry analysts are using phrases such as "devastation" and "severe strain" to describe what is next for the petro-states should prices plummet as low as some fear. No one is as yet forecasting a fresh round of Arab Spring-like regime implosions. But that's the nightmare scenario if you happen to run a petrocracy.

To understand why your average oil king is right to be worried at the moment, grab your calculator. The price of U.S.-traded oil fell to $83.27 a barrel on Monday, and global benchmark Brent crude to $96.05 a barrel; now juxtapose that against the state budgets of Iran, Russia, and Venezuela, which require more than $110-a-barrel Brent prices to break even, according to generally accepted estimates, and you'll see the problem.

Given this already-existing revenue gap, one might fairly wonder what would happen if, as Citigroup's Edward Morse says is possible, prices drop another $20 a barrel for an extended length of time. Oil economist Philip Verleger's forecast is even gloomier -- a plunge to $40 a barrel by November. Or finally, what Venezuelan Oil Minister Rafael Ramirez fears -- $35-a-barrel prices, near the lows last seen in 2008. In Russia, for instance, "$35 or $40, or even $60 a barrel, would be devastating fiscally," says Andrew Kuchins of the Center for Strategic and International Studies. That could damage the standing of President Vladimir Putin, since his "popularity and authority are closely correlated with economic growth," Kuchins told me in an email exchange.

With few exceptions, the same goes for the rest of the world's petro-rulers, whose oil revenue supports vast social spending aimed at least in part at subduing possible dissatisfaction by their populace. Saudi Arabia can balance its budget as long as prices stay above $80 a barrel, according to the International Monetary Fund, although projected future social spending obligations will drive its break-even price to $98 a barrel in 2016.

Oil king Venezuela? Is Saudi Arabia's mere possession of much oil the central reason it is the most pivotal energy player on the planet? Observed through the prism of Venezuela, the answer is no. BP's 2012 Statistical Review of World Energy, the bible of the energy industry, was released this week, and makes official something that OPEC asserted months ago -- Venezuela has surpassed Saudi, and become the world's largest reserve of oil. With 296 billion barrels, Venezuela has 18 percent of the oil on the planet; Saudi Arabia, with 265 billion barrels, has 16 percent (Canada's 175 billion barrels make it third, with 11 percent of the global total). Yet, oil is one sphere where possession is not nine-tenths of the law. Saudi Arabia remains king because of what it does and, more important, can do with its oil. For starters, the Saudis are the world's biggest oil exporters (10.1 million barrels a day in April); Venezuela exported 2.1 million barrels of oil a day, the seventh in rank, according to OPEC. But the more salient factor is Saudi's residual capability -- it is the sole country able to add meaningful daily volumes to global production in a pinch; Venezuela's spare production capacity is effectively zero. And that factor -- spare capacity -- is pivotal in the stability, or lack of, in global energy. When the world knows that there is oil to be had regardless of what calamity ensues, it can go and worry about other matters. Conversely, when spare oil production capacity becomes razor-thin, the world fixates on petroleum; prices go through the roof. Conclusion: Little sleep was lost this week in the kingly palaces of Saudi Arabia.

Go to the Jump for the rest of the Wrap.

Is Barack Obama sufficiently dirty to win re-election? Not according to presumptive Republican nominee Mitt Romney, who says the president is too spic and span.

Calculating that clean energy is passé among Americans more concerned about jobs and their own pocketbooks, Romney is gambling that he can tip swing voters his way by embracing dirtier air and water if the tradeoff is more employment and economic growth.

Romney's gamble is essentially a bet on the demonstrated disruptive potency of shale gas and shale oil, which over the last year or so have shaken up geopolitics from Russia to the Middle East and China. Now, Romney and the GOP leadership hope they will have the same impact on U.S. domestic politics, and sweep the former Massachusetts governor into the White House with a strong Republican majority in Congress.

A flood of new oil and natural gas production in states such as North Dakota, Ohio, Pennsylvania, and Texas is changing the national and global economies. U.S. oil production is projected to reach 6.3 million barrels a day this year, the highest volume since 1997, the Energy Information Agency reported Tuesday. In a decade or so, U.S. oil supplies could help to shrink OPEC's influence as a global economic force. Meanwhile, a glut of cheap U.S. shale gas has challenged Russia's economic power in Europe and is contributing to a revolution in how the world powers itself.

But Romney and the GOP assert that Obama is slowing the larger potential of the deluge, and is not up to the task of turning it into what they say ought to be a gigantic jobs machine. The president's critics say an unfettered fossil fuels industry could produce 1.4 million new jobs by 2030. They believe that American voters won't be too impressed with Obama's argument that he is leading a balanced energy-and-jobs approach that includes renewable fuels and electric cars.

The GOP's oil-and-jobs campaign -- in April alone, 81 percent of U.S. political ads attacking Obama were on the subject of energy, according to Kantar Media, a firm that tracks political advertising -- is a risk that could backfire. Americans could decide that they prefer clean energy after all. Or, as half a dozen election analysts and political science professors told me, energy -- even if it seems crucial at this moment in time -- may not be a central election issue by November.

Yet if the election is as close as the polls suggest, the energy ads could prove a pivotal factor. "Advertising is generally not decisive. Advertising matters at the margins. ... But ask Al Gore if the margin matters," said Ken Goldstein, president of the Campaign Media Analysis Group at Kantar Media. "This is looking like an election where the margin may matter."

I sat down for a chat about the new golden age of oil -- the subject of a cover story this week here at FP -- over at the New America Foundation with Jamie Holmes and Elizabeth Weingarten. Here is the podcast.

Australia's lop-sided economy: Given the jobless, growthless doldrums affecting most of the world's economies, does it pay to rev up your economy and employment rolls with the engine of natural resources, as long as you are careful to avoid the dreaded resource curse? As it happens, this experiment -- being pushed by loud voices in the United States -- has been under incubation for several years in Australia, the leading producer of coal, iron ore and (in coming years) liquefied natural gas for booming Asia. As I write this week at EnergyWire, this raw materials juggernaut has resulted in a 51 percent Australian economic expansion over the last two years alone. And the plans are to go even bigger. The country plans a 20 percent, $23 billion expansion in coal production, adding some 75 million tons a year to the current production of some 350 million tons. On top of that, mining companies have proposed $46 billion in added coal projects that would more than triple current production to some 1,100 million tons.

As one might suspect, there are some problems with these numbers. First, the raw materials boom has not led to economic nirvana for Australia. According to the country's Bureau of Statistics, mining has added 103,000 jobs to the Australian economy over the last four years, but almost an identical number -- 97,200 jobs -- has been lost in manufacturing. Almost all the mining jobs have come in just two provinces -- Queensland and Western Australia. The rest of the country has largely stagnated. Meanwhile, Australians have turned profligate. As the boom has built, Australians have gone into debt -- last year, they owed an average of 156 percent of their disposable household income, more than triple their 49 percent debt load in 1991. "The amount of jobs being generated in the mining sector is really not that many compared with the lost tourism service jobs, the manufacturing jobs," Neil Bristow, managing director of H&W Worldwide Consulting," told me. "The commodities are bringing in significant money to the economy, but it's only very much in part of the economy."

And what about the coal projections themselves? Are they reasonable? Perhaps not, suggests Nikki Williams, CEO of the Australian Coal Association. "Australia has little or no chance of actually delivering growth of this magnitude," Williams told me in an email exchange. "Limitations to our access to capital, human resources and the capacity of our project approvals systems are just some constraining factors." And the projections of Australia's surge as an LNG exporter -- plans to become the world's largest LNG producer, and build from there? Joshua Meltzer, a former Australian diplomat and now a senior fellow at the Brookings Institution, says the scale of LNG production will be "fairly ground-breaking." Yet experts tell me that there simply is insufficient capital, equipment and manpower to manage everything on the drawing boards.

This is part of the point in evaluating the robust projections of oil and gas abundance we are hearing around the world. Paraphrasing Williams, will there be the capital, the people and the pure capacity to actually carry out the projects, presuming that all or most pass muster with the public and government agencies? The answer is most probably no.

Go to the Jump for the rest of the Wrap.

Just months after an enormous discovery of natural gas off the coast of Israel, a local company has reported another potentially big strike -- an estimated 1.4 billion barrels of oil, in addition to more natural gas. The company, Israel Opportunity Energy Resources, says it will start drilling by the end of the year. All of a sudden, Israel has found itself a focus of the world's hydrocarbon interest.

Energy experts are tittering about a prodigious new golden age of oil and gas in the Eastern Mediterranean, where Israel and Cyprus could become substantial oil and natural gas exporters, in addition to some other surprising places including French Guiana, Kenya, North Dakota, and Somalia. All in all, say increasingly mainstream projections, the world is moving into a period of petroleum abundance, and not the scarcity that most industry hands embraced just months ago. Plus, the United States, or at least North America, may be on the cusp of energy independence while OPEC's days of über-influence are numbered.

What these experts have not said, however, is that while this new golden age may indeed shake up the currently rich and powerful and create new regional forces, it could also accelerate the swamping of the planet in melted Arctic ice. So much new oil may flood the market that crude and gasoline prices might moderate and lessen consumer incentives to economize. "In the absence of U.S. leadership, I tend to agree with NASA's James Hansen that it is 'game over for the planet,'" Peter Rutland, a professor at Wesleyan University, told me in an email exchange.

This unspoken flaw in the golden-age scenario suggests it might not unfold so smoothly. The projected turnaround of oil's sagging fortunes may indeed herald economic salvation for the U.S. and global economies. But the environmental consequences could also trip up its full realization.

This is the first week of a new format for this blog. As many of you know, I have been working on the next book. It is time to start putting pen to paper toward a year-end deadline. So for the remainder of the year, the Oil and the Glory will run twice a week -- a long magazine-style piece once a week, and the Weekly Wrap on Fridays. Please feel free to continue to correspond either by email in the box next to my photograph below, in the comment box underneath the posts, by Twitter or Facebook.

Divorce, Russian style for BP: Four days after its Russian oligarch partners called for a split-up, BP says it received an unsolicited bid for its 50 percent share in TNK-BP, the Russian oil company. The bidder seems to be a Russian state company. The cash price could be big -- at upwards of $20 billion and more. But the deal will not be that straightforward -- that is not how Russia works. Rosneft, for example, will not simply hand over $20 billion in cash. Nor would President Vladimir Putin wish to be seen to be showing BP the door. Look for a deal with cash-and-stay components, perhaps involving talks about the Arctic.

This outcome is a long time coming. BP's relationship with the oligarchs has been star-crossed from almost its beginnings in 1997. The very next year, BP lost the main value of this first joint venture -- a company called Sidanco -- after paying $571 million for a 10 percent stake. In the subsequent six years, BP handed over some $7.5 billion more in cash to the oligarchs, and ultimately ended up with the 50 percent stake in TNK-BP as we know it today. Throughout, banking oligarch Mikhail Fridman and his partners -- known collectively as AAR -- have regularly taken BP for a shellacking. In 2008, things got so dicey that current BP CEO Bob Dudley -- then in charge of TNK-BP -- went into hiding incommunicado for several months.

BP has been paid handsomely for its misery. Last year, TNK-BP accounted for 29 percent of BP's global oil production, and 27 percent of its proven reserves. In 2011, BP received $3.75 billion in dividends from TNK-BP, or 17 percent of its $22.2 billion in cash flow. Accumulatively, BP's dividends since 2003 have been about $19 billion, according to BP. This makes its share of TNK-BP theoretically of great value. Bernstein Research puts the value of BP's stake at $18.5 billion to $20 billion, but others think the price could be more. Richard Griffith and Nick Copeman, analysts at Oriel Securities, estimates the value at $24 billion.

Even though no one likes to suffer like that, this does not mean that BP goes easily. Nor incidentally is BP necessarily interested in mere cash, notwithstanding its large remaining financial exposure after the 2010 Gulf of Mexico oil spill. BP is interested in really big future oil production. Like in the Arctic, the sort of exploration acreage recently acquired in separate deals by ExxonMobil, Eni and Statoil. One suspects that negotiation toward a BP Arctic deal will be an explicit or implicit component of a TNK-BP sale.

In an email exchange, BP spokesman Toby Odone told me that the Arctic will play no role in any sale. He said:

This is the first stage in what could be a very lengthy process to sell our share in TNK-BP. It is far too early to say what we will do with the money. All we have done today is announce an intention to look further at expressions of interest in purchasing some or all of our stake in TNK-BP. It is not about Arctic or other businesses in Russia, current or future.