How We Got Hooked On Using 20 Million Barrels Of Oil Every Day

oil rig

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This editorial is part of our GREAT DEBATE feature ‘What Resource Do We Most Need For Our Future?The current American dependence on oil — foreign and domestic — is staggering: we consume roughly 20 million barrels of the stuff every day, in order to run our cars and heat our homes. 

Click here to see how oil became our primary source of energy >
Though oil has been used for thousands of years — from soaking the arrows of the Persian military to treating George Washington’s frostbite during the Revolutionary War — it had little commercial value in the United States outside of powering kerosene lamps until the mid-1800s. 

But when the Pennsylvania Rock Oil Company of New York struck oil 70 meters down in Titusville, an incredibly valuable American commodity was born.

Today, America must deal with the growing conundrum of whether to commit fully to oil as the nation’s life blood. Though trillions of barrels of oil are ready to be harvested domestically today, we can only use this resource for so long — or we will find ourselves without a viable solution to turn to in the coming centuries. 

Nearly 40% of America's energy comes from oil, with fossil fuels in general making up 85% of our energy. Transportation is the biggest consumer of petroleum — 71 per cent of our oil goes towards powering cars, buses and other public transport.

But it wasn't always this way: from the the Model T to furnaces, new inventions powered America's use of oil until it surpassed coal as the country's main form of energy in 1950.

The first oil recession occurred with the unveiling of Thomas Edison's incandescent light bulb, which killed the need for petroleum lamps.

But inventions like Henry Ford's automobile (which utilized gasoline, a heretofore unused byproduct of petroleum refining) and oil-burning furnaces helped oil become the country's main energy source. Innovations like the interstate highway system only increased oil's importance.

Furthermore, wars like World War I and II greatly increased the need -- and prices -- of oil in the United States.

This increasing reliance on oil was made possible by vast reserves in places like Texas, California and Alaska — but proven oil reserves began falling in 1970, and domestic production fell with it. And as domestic production declined, foreign imports of oil rose dramatically.

The United States was the world's top oil producer until it was overtaken by the massive reserves of natural resources in the U.S.S.R. and Saudi Arabia in the 1970s. Russia now produces 12 per cent of the world's oil supply, with Saudi Arabia at 11.6 per cent and the U.S. is third with 10.8 per cent. Iran and China round out the top five.

But a decline in production could not stop the U.S. from increasing net imports and consumption of oil; the United States now consumes roughly 20 million barrels per day. U.S. consumption peaked in 2005 and has slowly declined thanks to a down economy, a shift in supply patterns and an increase in the use of biofuels.

To compensate, nearly half of America's oil was imported as of 2010 — and Canada, not the Middle East, is our biggest supplier.

As seen in the graph, the majority of U.S. oil still comes from the Western Hemisphere.

The country-by-country breakdown of where America imports its net crude oil and petroleum products from:

  • Canada (25%)
  • Saudi Arabia (12%)
  • Nigeria (11%)
  • Venezuela (10%)
  • Mexico (9%)

However, America's reliance on oil-producing Middle East countries — many of whom are OPEC members — has been a liability over the years.

American foreign policy has been forced to change its approach in the Middle East to one that secures the most oil from the region.

Throughout the 20th century, those with oil realised the economic and political importance of their commodity, and used that to their advantage in controlling a skyrocketing demand. The formation of the organisation of the Petroleum Exporting Countries (the first member nations being Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela) created a powerful oil bloc that caused billion dollar losses, energy crises and recessions with its embargo power alone.

Now, the tide has started to turn back towards America producing its own oil domestically.

Down from importing two-thirds of its oil in 2005, places like North Dakota are leading the charge to help America regain its status as the world's number one oil producer. The EIA says this could happen as soon as 2017.

The Western hemisphere is poised to become the new epicentre of the oil production world, with an estimated 6.4 trillion barrels of oil waiting to be drilled.

The 6.4 trillion barrels in the U.S., Canada and South America compare to just 1.2 trillion in the Middle East and north Africa.

The cost of becoming such a large oil producer is simple: a devastating toll on the natural environment.

The loss of wildlife preserves, the increase in carbon dioxide which contributes to climate change, oil spills in the ocean and on land and the disruption of natural habitats for animals will be the results of continued drilling in places like Alaska and the Gulf Coast.

Furthermore, the creation of new oil fields is only a temporary expansion: fossil fuels are not finite, but we consume it much faster than it can produced. And America as a nation (and the world as a whole) will eventually need to switch over to clean energy sources to survive.

We will never truly run out of oil— it will just become too expensive to keep drilling it.

Essentially, oil is an asymptotic value: we will never reach zero. But the rising costs of finding, drilling and harvesting oil sources will become too expensive to maintain.

In the meantime, despite an inevitable increase in oil production investments, creating alternate forms of sustainable energy -- hydroelectric, solar and wind power, for example -- will be tantamount to our future.

For an in-depth look at our energy future, read on

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