Domestic and Imported Oil
Facts and Figures
- The U.S. consumes about 21 million barrels of oil per day, 25% of the worldwide total of 84 million barrels consumed per day;
- U.S. oil production peaked in the early 1970's and has been declining since, despite advances in production technology;
- In 1970 we imported 28% of the transportation fuels we consumed. Today we import over 65% (Energy Information Administration);
- The average American household consumes 1,000 gallons of gasoline annually;
- Experts forecast oil use to increase 44% in the U.S. (93% of which is caused by transportation), and 57% worldwide between 2000 and 2025 (Energy Information Administration);
- Worldwide economic growth since 2003 has caused excess capacity (available additional supplies above current demand) to reach a historical low 1 million barrels per day - contributing significantly to higher prices;
- Some experts believe supply increases due to already planned projects will create sufficient supply to meet demand through 2010, but the vast majority of experts express concern about supplies after that date, and OPEC spare capacity will likely be exhausted by 2012 (International Energy Agency and Cambridge Energy Research Associates);
- Three times in the last 30 years, oil price spikes caused recessions in the U.S. (www.wrtg.com)
- 1973: Yom Kippur War and resulting Arab oil embargo - world production dropped 7%;
- 1978: Iran/Iraq conflict - world production declined by 10%;
- 1990: Gulf War - small decrease in production;
- The Middle East holds approximately 62% of total declared oil reserves - Saudi Arabia alone holds 22% of global reserves (BP Statistical Review);
- Oil provides 40-43% of all energy use worldwide - transportation consumes 70% of that (Winning the Oil Endgame);
Cost of Increased Use 6
Remaining reserves that are easily harvestable are controlled by nationalized oil companies; remaining domestic and alternative reserves are costly and time-consuming to bring into production.
Environmental Impact 8
While not the dirtiest fossil fuel source available, oil is close.
National Security 10
No other energy source is rife with more national security issues than oil.
Implementation 6
Additional production requires 5-7 years from date of decision to produce.
Political Toxicity 3
While national security baggage is increasing the political toxicity of oil use, from a short-term political perspective, it is still easier to maintain the status quo and continue our over-dependence on oil. But the long-term political toxicity of oil dependence will only increase as economic, national security and environmental consequences mount.
Pros of Use
- Relatively cheap and widespread;
- Highly portable with very high energy content per volume of fuel;
- Worldwide markets well established for trade and distribution;
- Enables worldwide commerce through its use in the transportation sector.
Cons of Use
- Majority of remaining reserves are controlled by governments through state- owned oil companies;
- Limited oil supplies remain at current worldwide pricing - further reserves are more time consuming to locate and more difficult to extract;
- The U.S. must rely on foreign sources for a great majority of our oil needs, exposing our economy to the volatile price of international oil, as well as subjecting our foreign policy to the need to defend U.S. oil interests;
- One gallon of gasoline (6.3 lbs) produces 19.6 lbs of CO2 when combusted, contributing significantly to global warming.
Barriers to Future Use
- Even if ANWR (Alaskan oil fields) were opened for drilling, it would only displace the increase in oil consumption over the 5-7 years it would take to bring supplies online at current growth rates;
- The U.S. does not have significant reserves remaining, and potential off-shore reserves will be more costly and time-intensive to extract;
- Further international conflicts may be inevitable in order to secure oil interests in far off lands to ensure the affordable supplies of oil on which national and global economies depend;
Incentives/Technology Breakthroughs Needed
- Advanced extraction technologies are needed to recover more oil from fading fields, but we can expect technology to provide no more than slight relief from already declining U.S. production numbers;
- Domestic oil and gas producers are already subsidized by the U.S. government.
Most Important Fact
We import 68% of the transportation fuel we use today, and 66% of remaining worldwide oil reserves are controlled by government-owned oil companies in the Middle East, which makes global oil supplies more vulnerable to geopolitics than technology limitations. Read more about our dwindling oil supply.
Bottom Line
Because our entire economy is so heavily reliant on oil, it will remain an important part of any future energy portfolio. But submitting our economic future to a commodity over which we have so little price and supply control is, at best, deeply risky. Economic reliance on oil imposes morally difficult and costly foreign policy scenarios, threatens our national security, and heightens global warming.
