Facts and information about the world's oil supply,
Forty-three years after it was first released, Bob Dylan's song "The Times They Are a-Changin'" is relevant to the conditions that exist in today's world. Skyrocketing energy demands, global warming, and rapidly diminishing oil supplies were unknown or of little concern in 1964. But today these issues are of primary importance to our country because we must do something now, we can't wait! The times truly are "a-changin".
This website has been created as a public service to make you aware of oil's future, and how it will impact your life and the lives of our children and their children. If you don't believe the "official" excuses for the continuing rise in oil prices and its effect on our economy, the stock market, and related issues, read on to discover the real reasons. You will be rewarded with a wealth of knowledge and viewpoints. All of the information presented here is free, publicly available on the internet, and you are encouraged to click the links, read the info, and draw your own conclusions. For your convenience, links are presented where appropriate or at the end of each section. These links will open in a new window so you can return here, when you're ready, by closing that window. (TIP: Bookmark interesting links so that you can easily return to them later.)
When faced with adversity, one of the strengths of America is our freedom and ability to unite as a people, taking action as needed to guarantee that freedom. It is hoped that this website will generate enough interest for people to think, talk to each other, and take action to change the future.
Thanks, in advance, for taking the time to read this information. If you find it helpful, please tell others about it, and send a letter (see sample) to your representatives in Congress and the Senate.
OK, what's the problem?
Oil is the problem. Oil is a finite resource.
What does that mean?
Think of it this way. Imagine an enormous tank, big enough to hold all the oil in the world. It took millions of years for nature to fill that tank, and nature has almost stopped making oil. So whatever is in that tank is all we've got. Each year, we keep pumping more and more oil out of that tank, and eventually it will all be gone.
Yeah, but we've got hundreds of years left, right?
Wrong. Experts can't agree on how much oil is left in the tank. It all depends on their estimates of how much oil has been found, how much oil is "undiscovered", and how much can ultimately be recovered. But all the estimates indicate that the tank is about half empty, and that we will run out of recoverable reserves before the end of this century! "Peak Oil", once considered a novel theory, has now gained widespread acceptance.
The world is currently consuming oil at the rate of 30.2 billion barrels per year. Based on the forecasts above, the "Pessimists" believe we will exhaust our reserves in 50 to 60 years, the "Probable" estimate is 80 years, and the "Optimistic" forecast is about 100 years. After world oil production peaks, it will decline rapidly as recovery becomes more difficult. By the end of this century, world oil production will be about equal to what it was in the years 1940 to 1950. If you want to check this out for yourself, you can read an assortment of articles by petroleum geologists, the Department of Energy, and other experts. Just click here for World Oil Predictions. Some believe the peak may have already occurred, and civilization as we know it is in dire jeopardy. (See "Life After The Oil Crash")
What about conservation, electric cars, and such?
These measures will definitely help to delay the depletion of the world's oil, but the optimistic forecast (above) includes savings from these initiatives. Currently, about 70% of the petroleum we consume is used for transportation. Light duty vehicles and freight trucks take the largest share while aircraft take less. However, from the standpoint of fuel efficiency, aircraft are the least efficient while light duty vehicles are the most efficient. Projections by the Energy Information Administration (Dept. of Energy) to the year 2030 show overall fuel consumption increasing by almost 7 million barrels per day with only slight changes in the distribution of use.
So, what does this mean?
It means that electric cars and hybrids will have a significant effect on petroleum consumption. All-electric vehicles powered by rechargeable batteries will help most to reduce oil consumption, because only 2% of our electricity is generated from oil. Though there may be some technology improvements in diesel-powered freight trucks, it is unlikely that we will see them powered by electric motors. Unless some huge improvements are made in aircraft power plants, they will continue to consume a large share of petroleum (2 million barrels per day) in the future. The Energy Information Administration is a good source of data in this area, especially their Petroleum Quick Stats. Their Energy INFOcard is a particularly useful reference for all energy sources.
Where does our oil come from? Don't we have a lot of oil wells in this country?
Yes we have a lot of wells, but most are not producing because the recoverable oil is gone. Estimates of undiscovered oil, as cited in Chapter 5 of the U.S. National Energy Policy, amount to 39.1 billion barrels including reserves in the Arctic Outer Continental Shelf, the Alaska National Petroleum Reserve, the Arctic National Wildlife Refuge, and the restricted areas of the Lower 48 States. At our present rate of consumption, these reserves would supply our needs for a little over 5 years! The U.S. is a good example of what is going to happen to the rest of the world. We passed our peak of oil production in 1970. At that time we were producing 9.6 million barrels of crude oil per day. By 2006 our production had dropped to 5.1 million barrels of crude per day, a loss of 47% in 36 years. Based on data published for 2006, we consume about 20.6 million barrels of petroleum per day (7.5 billion barrels per year), roughly 25% of the world total.
Here's where our petroleum comes from:
And here's where it goes........
So, we are currently depending on other countries to supply us with 66% of the oil we need. And to make matters worse, U.S. refinery capacity is strained to the limit causing us to import refined products as well as crude oil. For details, and to see more data, click here.
The chart above shows that our total petroleum consumption has been steadily increasing while our production has been steadily decreasing. As a result, our total imports have been sharply increasing to make up the difference. Since 1995, every year we have imported more petroleum than we produced.
Wow! What if some of those countries got mad at us and cut off our oil?
That would be pretty bad. We've been stockpiling oil in the U.S. Strategic Petroleum Reserve, and we have about 675 million barrels stored there. If all of our imports were cut off, the reserve would last us about 40 to 50 days at our current rate of production and consumption. But, it's unlikely we would lose all of our supply at once, so our reserve might last much longer. Military needs and critical civilian use would take priority. The Arab Oil Embargo of 1973-74 showed us what can happen when our oil supply is interrupted. And the docudrama "Oil Storm" showed the devastation that can occur to our economy with even a small interruption of our oil supply. Oil prices can double or triple very quickly with changes in supply or political events. To see these effects, click here. And finally, if you're concerned about terrorism, think about this: the greatest terrorist threat we face is disruption of our oil supply. Nearly everything we use in our daily lives depends on oil in one form or another, from plastics to transportation fuels, clothing (synthetics), home heating oil, food production and delivery, and so on. The economic effects on our stock market would be equally as disastrous plunging the nation into a severe depression. The price of crude oil has a very significant impact on the stock market. As shown in the chart below, steep increases in crude oil price correlate with a slowdown in the advance of the Dow Jones Industrial Average (DJIA). This five year comparison illustrates that during periods of small changes in crude oil price ($5 - $7 per barrel), the DJIA grew steadily (June 2002 to October 2003 and October 2005 to June 2007). However, from October 2003 to October 2005 oil prices rose from $30 per barrel to $63 per barrel, and the DJIA stagnated around an average of 10,100.
OK, I see the problem, it looks pretty grim.........
It doesn't have to be, there is a solution, and it would create thousands....maybe hundreds of thousands....of new jobs right here at home. The solution is synthetic and alternative fuels.
Really? Tell me about it!
The answer has been here all along. Back in the late 70's and early 80's we had a government sponsored synthetic fuels program. Because we have enormous resources of coal and oil shale, we developed or improved technologies for making petroleum products from coal, oil shale, and tar sands. A lot of the technology is fully developed. For example, the Canadians have been extracting petroleum from tar sands for many decades. During World War II the Germans made gasoline from coal, and today South Africa is producing oil products and gasoline from coal. Worldwide, the oil shale resource base is conservatively estimated to be 2.6 trillion barrels and is located in about 26 countries. About 2 trillion barrels, including both eastern and western deposits, is located within the U.S. That's about 77% of the worldwide resource. At 13 million barrels/day (current total imports) it would last more than 500 years! If we only recovered 20% of the resource, it would still last 100 years! Many U.S. companies have prepared detailed plans for utilization of our vast oil shale deposits in Western Colorado and Utah. They even built facilities to develop and test their shale-oil processes, and from the start, the synthetic fuel industry was designed to be environmentally friendly with no adverse effects. Click here for recent development activity.
Pennsylvania's Governor Ed Rendell announced that his administration has cleared the path for construction of the nation's first commercial plant that will convert waste coal into zero-sulfur diesel fuel and home-heating oil. Similarly, Montana is actively pursuing development of coal-to-liquids technology as a means of converting our significant coal reserves into synthetic gasoline and other fuels. Click here for more details. At 120 billion tons, Montana's coal is, in liquid terms, one quarter the size of the entire Middle East oil reserve, enough fuel to power every American car for decades. And that's just Montana...total U.S. coal reserves are much larger! A recent article in the Wall Street Journal indicated that current oil prices have made oil-from-coal economically attractive.
Biodiesel is an alternative renewable fuel made from vegetable oil. It can be burned in existing diesel engines without any major modifications....just substitute biodiesel for petroleum diesel when filling your tank. Although biodiesel can be made from almost any vegetable feedstock (soybean, rapeseed, mustard, jatropha, palm oil), the highest yield feedstock for biodiesel is algae, which can produce 250 times the amount of oil per acre as soybeans. A great deal of research and study has been done on creating algae farms in desert areas of the U.S. such as the Sonora desert in the southwest and the Salton Sea in California. LiveFuels Inc. located in Menlo Park, California, is a national alliance of labs and scientists dedicated to transforming algae into biocrude by the year 2010. Solix Biofuels, based in Fort Collins, CO, is developing a cost-effective photobioreactor to optimize algae growth and oil yield. Solazyme, a Bay Area startup company that makes diesel fuel from algae, will work with oil giant Chevron to perfect its technology. To learn more about widescale biodiesel production from algae, click here.
Today, in the United States, transportation consumes 68% of our total petroleum supply and 28% of our total energy requirements. Just two initiatives, biodiesel from algae and gasoline from coal could satisfy all of our transportation needs and make us energy independent. This solution is greenhouse gas neutral since the CO2 generated from coal-to-gasoline facilities could be used to grow the algae feedstock for biodiesel.
So, what happened? Why aren't we doing it!
Well, these synthetic fuel plants are very expensive! They cost billions of dollars to build and operate. The initial product oil price would be in the range of $40 to $50 per barrel, but could be as low as $30 to $40 per barrel as the technology matures. (Click here for current crude oil prices!) In 1980, when we faced a situation similar to today, the government established the Synthetic Fuels Corporation. Then Exxon, Chevron, Texaco, Union, Oxy, Mobil and others responded with huge investments in coal gasification, coal liquefaction, oil shale, tar sands, and other syncrude projects. Exxon even built a town to support its future oil shale workers. The government was ready to provide subsidies to allow these plants to compete with imported oil. Just when it seemed we were on the verge of going ahead, the world oil price was lowered, and the synthetic fuel program wasn't important anymore. So, President Reagan effectively ended the program in 1984. Not only did he cut the funding in half, but his bill required that synthetic fuels be competitive with world oil prices. The oil companies immediately abandoned their projects. Oxy kept going on oil shale for a few more years, but then was forced to quit because the price of oil remained low. If you look at the chart above, you'll see that our consumption and imports of petroleum decreased substantially while the synthetic fuel program was active. Since the end of that program, imports have steadily climbed as our domestic production has steadily declined.
OK, that's history, what can we do now?
Well, for one thing, we should continue with efforts to conserve, replace, or reduce consumption of petroleum. We could also use coal and oil shale to replace crude oil and to make petroleum products. To do that we would probably have to restart the synthetic fuels program and provide government subsidies as needed to get production started. We could then use naturally occuring oil mainly for petrochemicals and plastics, and stop wasting it on electricity generation and transportation fuel.
If we stop generating electricity
with coal and oil, what would replace it?
We could increase the use of nuclear power for electricity generation, and replace older coal-burning power plants with nuclear. It's been proven to be safe! (Click here for safety statistics.) New reactor designs, such as the pebble bed reactor currently under construction in China, have virtually eliminated all possibility of nuclear accidents. You can read more about the pebble bed reactor here. For more information on safe nuclear energy click here. In 2002, the U. S. generated 20% of its electricity with nuclear power. During that same period, the U.K. generated 22% with nuclear. Germany generated 30% with nuclear, while Japan generated 35%. France generated 78% of it's power with nuclear, and Lithuania generated 80%. And since there are no greenhouse gases from nuclear power, we would greatly reduce the environmental impact. This link gives a complete breakdown of world nuclear power generation including capacity in megawatts. Or, you can click here for a graph of world nuclear generating capacity. And, if you want to learn about current methods of nuclear waste disposal, click here, or plans for future handling of radioactive wastes in the U.S., click here.
In summary, biodiesel and synfuels are the best large-scale solution with the potential to completely replace imported oil. All the energy needed to produce synfuels comes from the raw material oil shale or coal, and we have the world's largest supply of oil shale as well as very large coal reserves...enough to supply our needs for several hundred years. Environmental issues are controllable, and as the technology matures, these issues will be negligible. Any additional contribution of fossil carbon into the atmosphere over the next 40 to 50 years would be insignificant compared to the present levels. We are not going to die from global warming....we may be uncomfortable....but we won't die. However, if we don't stop importing our energy needs we will die.... soon...... economically, politically, and from wars waged to protect our foreign energy sources.
Finally, we must also pursue every other option to become energy independent including wind, solar, tidal, E-85, hybrid vehicles, electric cars, conservation, and increased nuclear electric generation.
I see how this problem affects me, but what can I do about it?
The first thing you could do would be to learn as much as you can by reading all the publicly available information. For example, the American Energy Independence website is an excellent reader-friendly source. Then, talk about it with your family, friends, neighbors, and anyone else who will listen. You can send this website address to everyone on your e-mail list. We need to spread the word and make everyone aware of the problem. (According to "The Oil Crash and You" by Bruce Thomson, 2009 is the year when global oil supply first fails to meet global demand.) But, we also need to let everyone know that THERE IS A SOLUTION! Using technology and resources that already exist in this country we can change America's energy future so that:
But, we must start now! Contact your representatives in Congress and the Senate and tell them we want to be free of dependence on foreign oil, whatever it takes. (Click here for a sample letter you can copy.) We're spending billions of dollars to protect our sources of foreign oil. Why not spend those billions of OUR DOLLARS on development of our own independent oil supply?
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