OIL: The Answers May Surprise You

Part I

Question: Which country is the largest supplier of oil to the United States?

Answer: For the sixth straight year, it is Canada. And for extra credit, Canada is also the largest supplier of natural gas, electricity, and nuclear fuel to the United States as well.

Canada provides the United States with over 2 million barrels of oil every day. The United States imports about 15% of its natural gas, primarily from Canada. Canada and the United States supply each other with almost all of their combined electricity demands. Canada produces about one-third of the world's supply of uranium and they supply the United States' nuclear reactors with about one-third of their required uranium representing 6% of the total electricity supply in the United States.

As America moves to develop alternative energy methods and sources, Canada represents a long-term, safe, secure, and close source for America's oil and energy needs. The joint ventures between Canada and the United States on energy issues are profitable and a logical step towards reducing dependence on the Middle East and OPEC for North America's energy needs. Canada has the potential, with hydroelectricity, to provide an additional 16% of America's energy demand.

Trade between the United States and Canada has nearly doubled since the signing of NAFTA in 1994 with over $1 billion crossing the border every day. A significant portion of that is in energy. With Canada's increasing production in the Alberta Oil Sands as well as their offshore operations in the Atlantic, Canada stands to double their supply within the decade.

As an aside, Mexico is the second largest foreign supplier of oil to the United States last year. However, as these charts from the Department of Energy show, Canada and Mexico are still being overshadowed by the collective efforts of OPEC. But it is hard to deny that progress is being made in reducing our dependence on the Middle Eastern oil.

Part II

Question: What country is the largest producer of oil in the world?

Answer: From 1980 through 2002, the United States lead the world in oil production. I have been unsuccessful in finding numbers for 2003 and 2004, but the comparative numbers between the United States and the closest rival, Saudi Arabia, are staggering and consistent.

Measured in Thousands Barrels per Day (TB/d), the United States has consistently out produced all other nations averaging just under 10,000 TB/d each year from 1998-2002. That's a lot of oil! Remarkably, the United States is still the largest net-importer of oil.

What does all of this mean? The world's supply of oil will eventually run out, we need to get prepared now. Alternative sources of energy, including nuclear fusion, should be explored, but we should also seriously consider drilling in ANWR as well as building a few new refineries.

President Bush has asked Congress to pass a comprehensive energy bill that meets four major objectives: promotes conservation and efficiency, increases domestic production, diversifies the nation's energy supply, and modernizes the country's energy infrastructure. These goals, the President insists, are to be pursued while also upholding our responsibility to be good stewards of the environment.

Another consideration is national security. It is vital that we reduce our dependence on foreign sources of oil. The number of dollars invested for oil in countries that support less-than-democratic regimes is astounding. It is in America's interests to reduce funding both sides of the War on Terror by getting control of her energy needs. Set America Free, a bi-partisan group dedicated to bringing about a change in energy policy, has a blueprint for energy security (.pdf file) that is right on target.

The thing to remember is that the automobile industry will be resistant to change until there is a market demand for alternative fuelled vehicles. Consider:

If by 2025, all cars on the road are hybrids and half are plug-in hybrid vehicles, U.S. oil imports would drop by 8 million barrels per day (mbd). Today, the United States imports 10 mbd and it is projected to import almost 20 mbd by 2025. If all of these cars were also flexible fuel vehicles, U.S. oil imports would drop by as much as 12 mbd.

That's a good start.

Part III

Question: Are we paying the highest gas prices in history?

Answer: Depends on whether you are comparing apples to apples or not.

The apples and oranges comparison will tell you that the price at the pump is the highest we've seen. Historically, we've never paid over $2 a gallon for gasoline. The problem with this analysis is that it doesn't take in to account rising inflation. That's not to say that we aren't talking about real dollars here, we are, but there is more to this story than that.

The apples to apples comparison will demonstrate that in 1981 we were paying over $3 a gallon in 2005 dollars. The Iran-Iraq war caused a spike in oil prices because the fighting effected production in both countries. As a result, oil prices skyrocketed for a period until production stabilized.

And if you ask Europeans, $3 a gallon sounds like a steal. They are paying between $4 and $5 a gallon.

Our media is having some difficulty in reporting this story accurately. In all reality these aren't "record prices" that we're seeing at the pump, but prices are high.

Set America Free reports that Americans are actually paying more for their gas than the price we're seeing at the pump. With oil subsidies through tax breaks and government programs, we are spending billions and don't even really know it. Factor in that because we are relying on foreign sources of oil, requiring forces to keep a close proximity to the Middle East, we're spending billions more maintaining a military presence in the region.

GasBuddy.com maintains 170 individual websites devoted to reporting the prices of gasoline at the local level. They have a top ten list of tips to save at gas pump and to make that gas last a little longer:

1) Avoid High Speeds. As your speed increases, your aerodynamic drag increases in an exponential fashion. Driving 62 mph (100 km/h) vs. 75 mph (120 km/h) will reduce fuel consumption by about 15%.

2) Do Not Accelerate or Brake Hard. By anticipating the traffic and applying slow steady acceleration and braking, fuel economy may increase by as much as 20%.

3) Keep Tires Properly Inflated. Keep tire air pressure at the level recommended by your vehicle manufacturer. A single tire under inflated by 2 PSI, increases fuel consumption by 1%.

4) Use A/C Sparingly. When the air conditioner is on it puts extra load on the engine forcing more fuel to be used (by about 20%). The defrost position on most vehicles also uses the air conditioner.

5) Keep Windows Closed. Windows open, especially at highway speeds, increase drag and result in decreased fuel economy of up to 10%.

6) Service Vehicle Regularly. Proper maintenance avoids poor fuel economy related to dirty air filters, old spark plugs or low fluid levels.

7) Use Cruise Control. Maintaining a constant speed over long distances often saves gas.

8) Avoid Heavy Loads. Remove the sand bags from your trunk in the spring and pack lightly for long trips.

9) Avoid Long Idles. If you anticipate being stopped for more than 1 minute, shut off the car. Restarting the car uses less fuel than letting it idle for this time.

10) Purchase a Fuel Efficient Vehicle. When buying a new vehicle examine the vehicle's rated fuel efficiency. Usually choosing a small vehicle with a manual transmission will provide you with great fuel economy.

While we aren't paying record prices for gas in America, prices are high. There are lots of things we can do to survive the crunch, but oil prices are expected to continue trending upwards. Alternative fuels and increasing fuel efficiency are just two of the methods being looked at by the automobile industry. In the mean time, it pays to know where to gas gasoline as cheaply as possible and there is no better place than the Internet for a project like that.

Part IV

Question: Are we running out of oil on this planet?

Answer: That depends on whom you ask.

The conventional theory states that oil is derived from the remains of dinosaurs. The Russian scientist, Mikhail Lomonosov, who wrote this theory describes it this way:

Rock oil (petroleum) originates as tiny bodies of animals buried in the sediments which, under the influence of increased temperature and pressure acting during an unimaginably long period of time, transforms into rock oil.

In layman's terms: the animal died and becomes oil.

However, Russian and Ukrainian scientists came up with a new theory in the 1950s. According to the abiotic or abiogenic theory, oil comes from deep within the Earth's crust from inorganic material.

Geologist Vladimir Porfir'yev:

The overwhelming preponderance of geological evidence compels the conclusion that crude oil and natural gas have no intrinsic connection with biological matter originating near the surface of the Earth. They are primordial materials which have erupted from great depths.

The Russians and Ukrainians have had success in finding oil and natural gas deposits using this theory even in locations where the biological theory indicated conditions would be unfavorable for such a find.

The implication here is that there may be more oil on this planet than we know, but an unlimited supply of oil? That remains to be seen. Bruce Bartlett makes the following statement in the Washington Times:

Of course, higher prices also make known deposits of oil that were previously too costly to exploit viable economically, as well as reducing demand. Consequently, it is impossible to ever literally run out of oil. The possibility should not be a factor in the energy debate.

What Mr. Bartlett fails to consider is that consumption may exceed the planet's capability to continue making oil at some point. Nor does he address the quantity question: just how much oil do we have left?

Even if the new theory is correct, eventually Earth is going to run out of inorganic material from which oil comes from. We still don't know how long the process of making oil from this inorganic material takes and under what conditions.

To answer the question, no, we are not running out of oil on this planet. But we might someday if we can't answer some of the other questions surrounding this debate.

Note

This series originally ran on the Blogger News Network. You can read all of Matt's BNN work by clicking here