Oil – a necessity of our daily lives, yet seemingly the cause of many of our most pressing global problems, including global warming. Nearly 40% of ALL energy consumed in the US comes directly from oil, pumped out of the ground and refined into the many fuels we consume as energy or as a critical raw material of everything from plastics to fertilizers. The US imported over $243 billion of petroleum products in 2005 (excluding natural gas), representing nearly 15% of our TOTAL imports of all goods1. That works out to be almost $800 for every man, woman and child in the US.
Not a day goes by where we don’t hear that a) the world as a whole is running out of oil, but b) we can make a dent in our oil imports by opening new (and sadly pristine) domestic areas to oil production. Which is true? And, are there other options to quench our insatiable thirst for petroleum? Read on below to find out.
where it comes from
Like other fossil fuels, petroleum is believed to come from the decomposition of ancient marine life that died and settled to the bottom of the ocean millions of years ago. Through time, these deposits were buried under layers of sediment and rock. Subjected to intense pressure and heat, the remains of these organisms were converted into crude oil (and many of the other hydrocarbons we extract from the earth).
Today, oil and other petroleum liquids make up 40% of the US energy supply, dwarfing coal at 23%, the next largest source2. Where do we get our oil from? Over 50% still comes from North America (US, Canada, Mexico). OPEC countries (including Nigeria, Saudi Arabia and Venezuela) supply 30%, and the remainder comes from non-OPEC countries such as the UK, Norway, and Russia.
There are several challenges either obvious or implied by the chart of US oil sources. For one, a significant portion of the US current supply comes from countries where supplies may not be dependable such as Nigeria and Venezuela. Another reality, though, is that over 50% comes from North America where oil production is mature and likely to decline in the future. Coupled with ever-increasing demand, current projections show that nearly 60% of our oil will come from foreign sources by 2020 if we don’t change our thirsty habits! (see the chart below3). And the reliability of our supply is not likely to increase either, since the largest reserves are found in many unstable parts of the world4 .
1 US Census Bureau: http://www.census.gov/foreign-trade/Press-Release/2006pr/04/ft900.pdf
2 US Energy Information Administration: http://www.eia.doe.gov/emeu/mer/pdf/pages/sec1_7.pdf
3 US Energy Information Administration: http://www.eia.doe.gov/oiaf/aeo/excel/figure93_data.xls
4 US Energy Information Administration: http://www.eia.doe.gov/pub/international/iealf/crudeoilreserves.xls
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