There has been a long discussion this election cycle about oil. Although as I'm writing this oil has retreated nearly $40 a barrel from its summer high the black gold is trading at historically high prices. The long term outlook on oil isn't great as many oil experts (including multi-billionaire and former Republican money man, he financed the Swift Boat ads against Kerry, oil-tycoon T. Boone Pickens) say that we have hit peak production of oil and rising demand will drive prices higher with limited or no ability to increase production.
From "Energy Information Association" the official source on energy statistics in of the US Government....
Because the United States is the world's largest importer, it is easy to forget that it:
is the oldest major global oil producer;
is formerly the Number 1 global oil producer;
is currently the Number 2 global oil producer;
has produced more oil, cumulatively, than any other country (180 billion barrels from 1918 to 1999);
has produced more oil, cumulatively, than the current reserves of any country but Saudi Arabia.
http://www.eia.doe.gov/pub/oil_gas/petroleum/analysis_publications/oil_market_basics/supply_text.htm
From www.infoplease.com
The Top 20 Oil Reserve Countries
Rank Country Proved reserves
(billion barrels)
1. Saudi Arabia 264.3
2. Canada 178.8
3. Iran 132.5
4. Iraq 115.0
5. Kuwait 101.5
6. United Arab Emirates 97.8
7. Venezuela 79.7
8. Russia 60.0
9. Libya 39.1
10. Nigeria 35.9
11. United States 21.4
12. China 18.3
13. Qatar 15.2
14. Mexico 12.9
15. Algeria 11.4
16. Brazil 11.2
17. Kazakhstan 9.0
18. Norway 7.7
19. Azerbaijan 7.0
20. India 5.8
Top 20 countries 1224.5 (95%)
Rest of world 68.1 (5%)
World total 1,292.6
http://www.infoplease.com/ipa/A0872964.html
So, what these two important charts tell us is the following:
+ The US is the #1 IMPORTER of oil, the #2 PRODUCER of oil and only has reserves to place itself at #11 on availability.
+ Four of the five countries with the largest oil availability have questionable ties to terrorist organizations and of the top 10 largest oil reserve holding countries only one(!!!) has a stable government that is consistently pro western in its policies (that would be Canada).
+ Oil is traded as a worldwide commodity. Even though oil might be produced in a particular country that oil doesn't necessarily make it to the market in that same country but is placed on the world market at market prices. A specific example which would clarify this is ANWR (Alaskan National Wildlife Refuge) in Alaska. Most pundits which support the drilling for oil in this region point to the reduction on foreign oil in the US. The argument is a bit of a false one as the oil produced there would be sold to the highest bidder wherever in the world that would be and not necessarily used in the US.
So, onto my rant....
We cannot increase domestic production in the US by large amounts and we certainly will not be able to produce enough oil to be self sufficient. No matter what the US does in oil production we will continue to send a massive percentage of that money sent to countries that aren't friendly to us. There is no way around it, period.
T Boone Pickens says this on his website www.pickensplan.com
"As imports grow and world prices rise, the amount of money we send to foreign nations every year is soaring. At current oil prices, we will send $700 billion dollars out of the country this year alone — that's four times the annual cost of the Iraq war.
Projected over the next 10 years the cost will be $10 trillion — it will be the greatest transfer of wealth in the history of mankind.
America uses a lot of oil. Every day 85 million barrels of oil are produced around the world. And 21 million of those are used here in the United States."
TEN TRILLION DOLLARS! Think about that. $10,000,000,000,000. To put that in perspective, the Gross Domestic Product of the United States in 2007 was $13.8 trillion. Put a different way, if we continue the purchasing of oil at current rates for 10 years is the same as GIVING AWAY EVERY SINGLE PAYCHECK OF EVERY SINGLE AMERICAN...FOR AN ENTIRE YEAR!
So, what do you and I do? Here are some things to talk about.
+ COAL. As a native West Virginian myself I understand that coal comes with some issues but the clean coal technology has advanced at incredible rates over the last few years. We are building coal to liquid fuels plants in many parts of the US and already use coal effectively for electric creation. Our supplies are remarkable, too. The US contains about 27% of the worlds coal supply and much of it is easy to mine and ship.
+ Natural Gas. (From T Boone Pickens) "Natural gas is significantly less expensive than gasoline or diesel. In places like Utah and Oklahoma, prices are less than $1 a gallon. To see fueling stations and costs in your area, check out cngprices.com.
Domestic Natural gas is our country's second largest energy resource and a vital component of our energy supply. 98% of the natural gas used in the United States is from North America. But 70% of our oil is purchased from foreign nations.
Natural gas is one of the cleanest, safest and most useful forms of energy — residentially, commercially and industrially. The natural gas industry has existed in the United States for over 100 years and continues to grow.
Domestic natural gas reserves are twice that of petroleum. And new discoveries of natural gas and ongoing development of renewable biogas are continually adding to existing reserves.
While it is a cheap, effective and versatile fuel, less than 1% of natural gas is currently used for transportation.
+ Wind (Again, from T Boone Pickens) Studies from around the world show that the Great Plains States are home to the greatest wind energy potential in the world — by far.
The Department of Energy reports that 20% of America's electricity can come from wind. North Dakota alone has the potential to provide power for more than a quarter of the country.
A 2005 Stanford University study found that there is enough wind power worldwide to satisfy global demand 7 times over — even if only 20% of wind power could be captured.
Building wind facilities in the corridor that stretches from the Texas panhandle to North Dakota could produce 20% of the electricity for the United States at a cost of $1 trillion (WE'RE GOING TO SPEND 10 TRILLION ON OIL WITH MOST OF THAT MONEY LEAVING THE US). It would take another $200 billion to build the capacity to transmit that energy to cities and towns (ALL OF THIS WOULD CREATE HIGHER PAYING JOBS THAT COULDN'T BE OUTSOURCED OVERSEAS).
I know that is a lot of information to digest but it does prove why I say that oil is unpatriotic. The government needs to prod American development of the resources we have here in the US. The creation of wind farms, the increased emphasis on coal (which even GWBush has pushed), the conversion of cars to natural gas along with nuclear power, continued research into bio-diesel (this company can produce fuel grade diesel using bacteria http://www.cnn.com/2008/TECH/science/08/12/bug.diesel/) and the continued development of technologies that allow natural grasses like sawgrass to be converted into biodiesel can create a stronger US. These technologies and a redevelopment of the electric grid to handle wind energy production could create tens of thousands of jobs that could never be exported while freeing the US from financing our own enemies.
The continued use and development of oil based technologies doesn't advance the US economy, security or our future in any substantive way. No matter how much "drill drill drill" we get from the domestic oil producers, we will continue to be primarily dependent on foreign production and sending money to anti-American governments at a rate faster than we send money to China! THAT MAKES OIL UNPATRIOTIC!
$4 gasoline is, in my estimation, a great thing for the American consumer as it forces us to realize what we are doing. We have been given a GREAT opportunity to look beyond oil and make changes while we can but before we have to do it. Please check out T. Boone Pickens website at www.pickensplan.com for one interesting plan to help plus keep pressure on your political leaders through a quick email or phone call.
I hope that this post has been informative, feel free to leave a comment. The more discussion on this topic the better answers we get. I don't claim to be an expert but I certainly am interested in finding answers to some of these issues.
That is my rant.
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