Don’t Blame Oil, Developed Nations Are Responsible for Climate Change, Says OPEC
OPEC seems concerned about loosing customers as developed nations pledge to invest billions in renewable energy projects.
OPEC seems concerned about loosing customers as developed nations pledge to invest billions in renewable energy projects.
You’ll eventually get into a conversation where someone will say cheap oil prices means there’s no reason to develop hybrid and electric cars. Don’t panic. Here’s how to “gently” bring them back to reality using those things called “facts”.
Background
• The United States consumes nearly 21 million barrels of petroleum per day (7.5 billion barrels per year), one fourth the world total.
• Of the crude oil consumed in the U.S., 66 percent is imported.
• The U.S. is on pace to spend over $500 billion on petroleum imports in 2008.
• U.S. oil production currently occurs onshore in the lower 48 states (2.9 million barrels per day (mbd)), offshore (1.4 mbd, primarily in the Gulf of Mexico), and in Alaska (0.7 mbd).
More Drilling Cannot Make the U.S. Energy Independent
• The U.S. Geological Survey estimates that 10.4 billion barrels of oil are technically recoverable in the Arctic National Wildlife Refuge (ANWR)—less than one and a half years of consumption.
• The U.S. Department of Energy (DOE) estimates that of the 59 billion barrels of technically recoverable oil in the Outer Continental Shelf (OCS) of the lower 48 states, only 18 billion are off limits under the federal moratorium.
• DOE projects that lifting the OCS moratorium would not increase production before 2017 and that by 2030 production would only amount to 0.2 million barrels per day—less than 1 percent of current consumption.
• Total U.S. proved oil reserves are estimated at 21 billion barrels—less than a 3 year supply at the current rate of consumption.
• Since peaking in 1970, U.S. crude oil production has declined 47 percent. World production could be peaking now.
It struck me today that our fearless leaders, would-be’s, and corporate giants seem to think we’re all a bunch of rubes gathered outside a carnival sideshow, leaning on the barker’s every word.
Urging Congress to lift its ban on offshore oil and gas drilling, our fearless leader, you know, President Bush, told lawmakers, “There is no excuse for delay“.
It got worse, “Families across the country are looking to Washington for a response.” Gimme a break.
Here is a line of thinking that I have heard several times recently - oil prices have increased so rapidly recently that the market has become overheated and will pop like a bubble. Comparisons to Dutch tulips, Dot Com stocks, and housing prices abound on TV, on the radio, on the web, and around water coolers.
There is one major difference that causes me some grave concern - oil, unlike all of those other investment manias that exploded, is a commodity with visible, experienced hands on the controls.
The reason that I am concerned is that I believe that high oil prices are hurting nearly everyone and the pain will increase as time goes on. The hands on the controls, however, are feeling no pain.
The Organization of Oil Exporting Countries (OPEC) is an internationally recognized cartel established in September, 1960 that holds well publicized meetings on a regular basis to discuss production allocations that are specifically designed to maintain a market price that members agree best meets their internal and external needs. Many of the country representatives to that meeting have spent lengthy careers thinking deeply about oil prices and how best to manage them to benefit the people who send them to the meetings and pay their generous salaries.

The increase to the estimated $440 billion for 2008 is based on an average $90 per barrel crude oil price for the year. In 2002, before the current bull market for oil began, US oil imports cost less than $103 billion. The preliminary figures for last year came to some $327 billion.
With little prospect for cheaper gas prices in the future, any decrease in the US export bill will have to come from a reduction in petroleum usage.
Which brings to mind two important questions:
Anybody here surprised? I’m not. Global oil markets, according to the Energy Information Administration, will remain tight with some hopes of backing off in 2009. How’s that SUV or Hummer running?
We’re nowhere out of the woods as far as oil prices are concerned, and you can read all about it in the EIA’s release.
My thanks for Jo-Jo-Loo on Flickr for the image.
Editor's note: This week, Ecotality's Bill Hobbs points to an interesting new development: Algeria, a member of OPEC, has plans for exporting solar power. This post was originally published on June 20, 2007.
A member of OPEC jumps into the solar energy business? Gotta be from The Onion, right? Wrong. Algeria, which earns $1 billion every week exporting oil, is developing a plan to generate solar power for both export and domestic
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