Energy Security

Incredibly, the percentage of imported Oil required to run the U.S economy has doubled since the last oil crisis in 1979. DOUBLED. In 1979 the U.S. imported just under 30% of the oil it consumes; today the U.S. imports 60% of the oil it consumes.
Worse, the U.S now has only 2% of the world’s oil reserve, yet we produce (extract) 8% of the world’s oil. It follows that we are pumping our remaining reserves out of the ground 4 times faster than the rest of the world.

The U.S. has 21.4 billion barrels of oil in known reserves (Source: Oil & Gas Journal, Vol. 103, No. 47 (Dec. 19, 2005). The U.S. consumes nearly 8 billion barrels per year. Without imports we would be OUT OF OIL in 4 years, if we were able to extract our domestic reserves to match our current demand. For better or worse, that is not possible. In the absence of oil imports, the U.S. would unable to increase its domestic extraction rates significantly, and even if it could, to do so would be unthinkable.

Total oil available to the U.S. FROM ALL SOURCES, peaked in the spring of 2004. Since that time, nearly 2 years ago, total oil available to the U.S. economy fell by 1 %.

“Total U.S. petroleum deliveries, a measure of demand, fell by roughly 1 percent to 20.6 million barrels per day, according to a report by the American Petroleum Institute. That’s down from 20.8 million barrels a day in 2005 and below the 2004 level of 20.7 million barrels a day. The group said the figures are preliminary and may be adjusted.” – MSNBC January 19, 2007

I assert that this pattern is likely to continue – and then accelerate. I’ll explain:

The world’s total production of all liquids (crude, condensate, natural gas plant liquids, ethanol, bio-diesel, coal to liquid, refinery gains…) is roughly 84.5 million barrels per day. However, in the aggregate, the producing countries consume the majority of the oil produced, leaving only 35 million barrels or so available to the importing nations (the U.S., Japan, China, India…). The exporting nations such as Saudi Arabia, Iran, and the Former Soviet Union have growing populations and economies, and are industrializing rapidly. Therefore they are consuming more oil each year. Yet the domestic production of the exporting nations has been stagnant for the past 2 years. It follows then that if an exporting nation’s consumption of oil increases while their oil production is flat, it will simply have less oil available to export to the importing countries. I assert that this is likely to continue – and that the U.S. will have less and less oil available to run its economy each year, FROM THIS POINT ON, to great effect.

Mentatt at Yahoo (d0t) com