Environmental Problems, Their Causes, and Sustainability 1

Oil price per barrel ($)7060504030201001950Oil(1997 dollars)196019701980Year199020002010tions). Reasons for this high dependence on importedoil are declining domestic oil reserves, higher productioncosts for domestic oil than for most oil imports,and increased oil use. According to the Department ofEnergy (DOE), the United States could be importing64–70% of the oil it uses by 2020 (Figure 17-12).In 1970, a bushel of wheat could be traded for abarrel of oil. Now it takes 9 bushels of wheat to buy abarrel of oil. In 2003, grain exports paid for only 11% ofthe U.S. oil import bill of $99 billion.Some analysts contend that depending on oil importsis not necessarily bad. They argue that using uplimited and declining domestic oil supplies is a drain-America-first policy that will increase future dependenceon foreign oil supplies. What do you think?Figure 17-11 Inflation-adjusted price of oil, 1950–2003. Whenadjusted for inflation, oil costs about the same as it did in 1975.Although low oil prices have stimulated economic growth, theyhave discouraged improvements in energy efficiency and useof renewable energy resources. (U.S. Department of Energyand Department of Commerce)Oil (million barrels per day)30252015OilHistoryConsumptionProjectionsNetimports10Domestic5supply01970 1980 1990 2000 2010 2020YearFigure 17-12 U.S. petroleum supply, consumption, and imports,1970–2003, with projections to 2020. During 2003, theUnited States imported most of its oil from four nations in the followingorder of importance: the non-OPEC nations of Canadaand Mexico and the OPEC nations of Venezuela and Saudi Arabia.In the not-too-distant future, the Department of Energy projectsthat the U.S. will have to depend more on the Middle Eastfor oil, because it contains by far most of the world’s discoveredand undiscovered oil. (U.S. Department of Energy, AnnualEnergy Review, 2003 and 2004)cost of $7.50–$10 per barrel compared to about $2.50 inSaudi Arabia.Bottom line: If you think of U.S. oil reserves as asix-pack of oil, four of the cans are empty. Geologistsestimate that if the country opens up virtually all of itspublic lands and coastal regions to oil exploration, itmay find at best about half a can of new oil at a higheconomic and environmental cost.In 2003, the United States imported about 55% ofthe oil it used (up from 36% in 1973 when OPEC imposedan oil embargo against the U.S. and other na-How Long Will Conventional Oil SuppliesLast? The End of the Oil Era May Be in SightKnown and projected global oil reserves shouldlast for 42–93 years and U.S. reserves for10–48 years depending on how rapidly weuse oil.Production of the world’s estimated oil reserves is expectedto peak between a little before 2010 and 2030,and production of estimated U.S. reserves peaked in1975.We are not yet running out of oil. But once oilproduction peaks, we will begin sliding down thebell-shaped oil production curve of a nonrenewableresource (Figure 1-8, p. 11) from 50% depletion toward80% depletion, when it costs too much to extract whatis left. At some point during this slide, we will shiftfrom an abundant supply of cheap oil (Figure 17-11) toa dwindling supply of increasingly expensive oil.According to geologists, known and projectedglobal reserves of oil are expected to be 80% depletedwithin 42–93 years and U.S. reserves in 10–48 years dependingon how rapidly we use oil. If these estimatesare correct, oil should be reaching its sunset yearssometime this century. Appendix 5 (p. A12) summarizesmilestones in the Age of Oil.Can We Meet the World’s GrowingDemand for Oil? Rapid ExponentialGrowth Is a Hungry BeastJust to keep using conventional oil at the currentrate, we must discover global oil reservesequivalent to a new Saudi Arabian supply every10 years.Even if much more oil is somehow found, we are ignoringthe consequences of the high (1–5% per year)exponential growth in oil consumption in the world,especially in developing countries (Figure 17-13). It ishard to get a grip on the incredible amount of oil we358 CHAPTER 17 Nonrenewable Energy Resources