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U.S. Energy

The United States should make every effort to reduce its dependence on foreign energy and focus instead on alternate fuels.

US Dependence on Foreign Oil is Growing

According to the American Petroleum Institute, the United States keeps importing more and more oil. Imports are now a record 58 percent of our oil supply. This oil comes mostly from the troubled Middle East, while U.S. production declines. According to the Cheney Report, by the year 2020, oil imports will be two-thirds of U.S. consumption.

Doubting the Supply of Foreign Oil

To make the problem even worse, there are doubts about the foreign supply of oil. Leading oil companies are basing much of their production planning on tapping reserves in the Caspian Sea region. Authoritative observers now say, however, that the predicted 200 billion barrels in unconfirmed oil reserves in the region may be only in the 15 billion to 30 billion barrel range.

The Gulf region has tremendous strategic significance with almost two-thirds of the world's proven reserves of crude oil and one-third of the world’s natural gas. We shudder to picture the results of a massive increase in the U.S. and world dependence on Mid-East oil and the Mid-East arms race, including both conventional and non-conventional weapons.

Islamic fundamentalists and Islamic terrorists operate in Nigeria, Algeria, Indonesia, Saudi Arabia and Kuwait, all major oil suppliers.

The International Energy Agency (IEA) predicts world oil demand will reach 115 million barrels per day by 2020 from 76 million bpd this year, annual growth of nearly two million bpd. The IEA expects a fossil fuel future, a continued strong role for oil as a transport fuel and a further expansion of international oil trade. The fast-growing Asian economies will use 45% of the 39 million bpd of growth to 2020. Oil demand growth in China alone will grow by seven million bpd with oil import dependence in the country ballooning to 77% by 2020 from 22% recently. Dependence on oil imports in Europe will rise from 52% to 79% . Reliance on Middle East OPEC production will intensify.

When you add a concern over our growing dependence on foreign oil to doubts about the supply of foreign oil, these concerns multiply when you realize that the demand for foreign oil is growing rapidly all over the world.

Declining Oil Supply

Moreover, there are credible predictions that the world supply of oil will soon rapidly decline. Independent experts, such as Dr. Colin J. Campbell, point out that we are using oil four times faster than it is being discovered. Dr. Campbell, an Oxford Ph.D., is an associate of PetroPlan and advises governments and industry. Dr. Campbell believes that hydrocarbon production will peak before 2020 and then decline by about 33%.

Dr. Campbell also believes that as Saudi Arabia becomes the swing producer, prices will rise dramatically. Prices have increased historically when Saudi Arabia becomes the swing producer:

In the 1970s, after the Saudi share goes went over 0.3, the price rises rapidly. The current price has risen to $36, approaching a record.

Dependence on foreign energy places the United States in serious economic risk. If the supply of foreign oil was cut off, or even if the price rose another 10% from its current $36 level, companies that rely on gasoline or other oil-based fuels may cease to be profitable or go bankrupt.

The supply of foreign oil can easily be cut off. Much of the world’s oil supply is in the hands of our enemies. We need only remember the economic chaos caused by the 1973 oil embargo to realize that we can easily suffer from the “oil weapon.” The 1973 OPEC oil embargo caused massive economic pain.

Venezuela--one of the U.S.'s top-two overseas oil suppliers--is led by an unpredictable, left-leaning government whose leader, Pres. Hugo Rafael Chavez Frias, has consorted with the likes of Saddam Hussein and Cuba's Fidel Castro.

Added to our concern about our oil supply is a sense of just how easily our oil supply can be cut.

Total Costs of Oil

Foreign oil costs us dearly. First, we pay a high price for the oil. Second, we have to pay for a military presence to protect our oil supplies. Third, we pay for the environmental damage that the oil causes. Fourth, we use much of our valuable foreign exchange to pay for the oil. Fifth, we have to engage in supporting morally dubious foreign rulers to protect our oil supplies.

We now use over 19 million barrels of foreign oil per day, or over seven billion barrels per year. Many experts predict that $30-$40 per barrel prices are here to stay. This would mean that the U.S. will pay $250 billion per year for foreign oil.

Military Costs

An estimated $30-60 billion a year has been expended to safeguard Middle East oil supplies. That cost is high absolutely and is enormously high relative to the total value of U.S. oil imports from the Persian Gulf, which averaged $10,250,000,000 annually in the period from 1992 to 1999. Even if this cost is allocated over all the oil imported by the U.S., it would add $4-8 per barrel to the cost of oil. The current campaign against Iraq will add much, much more.

Environmental Costs

We cannot easily estimate the costs of air pollution, but we do know that an annual average of 30 million gallons spilled domestically since 1990 from wells, pipelines, vehicles, and storage facilities results in fires, unsafe drinking water, and damage to air, soil, flora, and fauna. The oil industry's 155,000 miles of active pipeline, reaches every state. The U.S. also has 440,000 inland storage facilities. Many spent wells, illegally filled with used fuel oil and left to leak, have been abandoned.

Foreign exchange

The United States recorded a $435.2 billion trade deficit for 2002, the largest imbalance in history, as the weak global economy set back American exports while imports of autos and other consumer goods were hitting all-time highs. And as a country we have reached our debt limit of $6.4 trillion.

Paying for Evil

While we pay all this for the oil, we are paying billions of dollars to the Axis of Evil – terrorist states like Iraq and Iran. More to countries like Libya that have supported terrorism in the past. Even a country like Saudi Arabia has people that have sent $110 million to suicide bombers and more to Al Quaeda and Usama bin Laden, Part of what we pay for oil goes to buy weapons of mass destruction and fund terrorist training camps. This money also keeps repressive regimes, like those in Iraq, Iran and Libya alive by paying for the political police that use repression of free speech, torture and death. Even with free countries, such as Russia, Venezuela or Nigeria, our diplomatic efforts are stunted by oil considerations.

Our efforts to protect our oil supply have caused us to engage in actions that have inspired anti-American sentiment and motivated terrorist attacks. While few share his opinion, Usama bin Laden says

“You steal our wealth and oil at paltry prices because of you international influence and military threats. This theft is indeed the biggest theft ever witnessed by mankind in the history of the world. Your forces occupy our countries; you spread your military bases throughout them; you corrupt our lands, and you besiege our sanctities, to protect the security of the Jews and to ensure the continuity of your pillage of our treasures. “

Thus, our lust for oil motivated and paid for the 9-11 attacks. What could be more self-destructive?

Our Future

There are important and compelling economic, national security, environmental, and moral reasons to reduce dependence on foreign oil. Our national security now depends on the price and availability of oil and the only ultimate control we have on our oil supply is our willingness to send troops to other countries to grab oil. The recent reluctance of the United Nations to support us serves as a wake-up call: reduce our dependence on foreign oil or lose.

When you take the importance of energy in our economy and watch our dependence on foreign oil grow, and then realize that the demand for oil will soar while the supply of oil will soon peak, and add in the worries we have politically in a region that has two-thirds of the world’s oil supply, you are absolutely compelled to find a solution. Adding up the real, total cost of foreign oil and looking at our economic situation can only lead you to demand an immediate investment in alternative fuels.

While President Bush recently promised to spend $1.2 billion to create a hydrogen economy, he has to spend billions on the War on Terrorism, attacking Iraq, and other military expenditures to protect our supply of foreign oil. More should be spent on the hydrogen economy and other alternative fuels.

It will take a tremendous investment and a long time before alternative fuels make a dent in the use of oil. Alternate energy, like wind power and solar power, are a tiny share of our total energy budget. Even with government programs to ramp up wind and solar, they will not likely exceed one percent of energy by 2020. Solar power costs at least the equivalent of $100 per barrel of oil.