UNITED STATES DEPENDENCE ON PERSIAN GULF OIL

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UNITED STATES DEPENDENCE ON PERSIAN GULF OIL

• CAN WE REDUCE IT?
• John Bush
• May 5, 2006

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POSSIBLE REASONS TO BE CONCERNED ABOUT OUR ENERGY
FUTURE

• A. Belief that the wasteful and dangerous ways we
  are using non-renewable energy resources is
  causing unsustainable environmental damage.
• B. Concern that carbon dioxide emissions are
  causing severe, deleterious, perhaps cataclysmic,
  climate change
• C. Prospect that we are approaching the peak of
  oil production as global demand is rapidly
  growing thus imperiling our economic future
• D. Concern that our dependence on petroleum from
  the nations of the Persian Gulf endangers our
  national security

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OIL FOR TRANSPORTATION

• Were it not for our dependence on oil for
  transportation then D and E would be negligible
  concerns
• The US has ample potential resources in coal,
  uranium, solar and wind energy on which to base
  an electric or hydrogen economy--given enough
  time and resource commitment
• Our national security seems to require that we
  secure from potential disruptions whatever supply
  of liquid fuel for transportation that we will
  require

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(No Transcript)
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FOR WHAT DOES THE US USE OIL?EIA Annual Energy
Review 2004

• Residential 1.57
  Quads
• Commercial 0.79 Quads
• Industrial 9.57 Quads
• Asphalt Road Oil 1.24
• Distillate Fuel Oil 1.19
• LPG 2.19
• Chemical Feedstock 3.29
• Electric Power 1.20 Quads
• Transportation 27.00 Quads
• Distillate (diesel) 5.91
• Jet Fuel (kerosene) 3.36
• Motor Gasoline 16.93
• 1 Quad Quadrillion (E 15) Btu/yr

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US PETROLEUM BALANCE

• Domestic Net Total
• Production Imports Demand
• 2001 19.0 Q 22.6 Q 41.6 Q
• 2002 19.0 22.8 41.8
• 2003 18.6 23.8 42.4
• 2004 18.4 26.0 43.9
• 2005 17.5 26.3 43.7
• AAG -1.1 3.6
  1.3

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WHERE DO THE US CRUDE OIL IMPORTS COME
FROM?(2006)

• -Mexico 3.75 Q -Brazil 0.47 Q
• -Canada 3.62 -Algeria 0.34
• -Saudi Arabia 3.00 -Kuwait 0.32
• -Nigeria 2.84 -Colombia 0.27
• -Venezuela 2.49 -UK 0.17
• -Angola 0.98 -Chad 0.16
• -Iraq 0.95 -Eq. Guinea 0.15
• -Ecuador 0.47
• Total 21 Q 78 of US imports

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SOME DEFINITIONS(EIA)

• Persian Gulf Bahrain, Iran, Kuwait, Qatar,
  Saudi Arabia, UAE
• (Also members of OPEC)
• OPEC Algeria, Indonesia, Iraq, Libya, Nigeria,
  Venezuela

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WORLD PETROLEUM TRADE2002

• TOTAL FROM
• IMPORTS PERSIAN GULF
• North America 28 Q 6Q 21
• W. Europe 37 6 16
• Asia/Pacific Rim 34 18
  53
• Rest of World 18 5 28
• Total 117 35 30
• US 23 Q
• EIA International Energy Outlook 2005

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WORLD PETROLEUM TRADE2025

• TOTAL FROM
• IMPORTS PERSIAN GULF
• North America 45 Q 12 Q 27
• W. Europe 40 10 25
• Asia/Pacific Rim 74 43
  58
• Rest of World 24 10 42
• Total 183 75 41
• Est. US 38 Q

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US NATIONAL SECURITY GOAL

• Reduce Persian Gulf crude oil imports by about 5Q
  (by 2008?)
• Reduce Persian Gulf crude oil imports by about 8Q
  (by 2025?)

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TWO QUESTIONS

• What would we have to do to attain these goals?
• If we attained these goals would this enhance our
  national security?
• Suppose only the US were denied Persian Gulf oil
  in 2008 and we had achieved our goal by then
  rationing could probably deal with the shortfall
• Suppose the world were denied Persian Gulf oil?
• In 2008
• In 2025

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WORLD PETROLEUM TRADE2025

• TOTAL FROM
• IMPORTS PERSIAN GULF
• North America 45 Q 12 Q 27
• W. Europe 40 10 25
• Asia/Pacific Rim 74 43
  58
• Rest of World 24 10 42
• Total 183 75 41
• Est. US 38 Q

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WHAT CAN WE DO ABOUT OIL SUPPLY SECURITY?

• Increase US domestic production
• Increase imports from secure sources
• Displace petroleum from non-transportation uses
• Electricity
• Industry
• Residential/Commercial
• Reduce transportation oil usage
• Increase efficiency of light vehicles
• Reduce usage of light vehicles
• Provide alternative fuels

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INCREASE DOMESTIC PRODUCTION

• On-shore production declining 1.1 per year and
  likely to continue
• Alaskan Nat. Pet Res. 1 Q by 2016
• Alaskan Nat. Wildlife Refuge 1.9 Q by 2015
• If we do these, domestic production is expected
  to peak by about 2016
• Deepwater Gulf of Mexico
• Offshore California / Florida

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IMPORT FROM SECURE SOURCES

• What is a secure source?
• North America Canada tar sands
• Long term guaranteed delivery not very likely
  except at very high prices
• Military conquest??!!

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INDUSTRY

• Chemical feedstocks from coalpotential of 3-4Q
  but requires retooling
• More efficient heat recovery potential perhaps
  0.2 Q

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STOP ELECTRICITY GENERATION FROM OIL

• In 2004 used 1.12 Q
• Suppose we could retire these units at 15 per
  year starting in 2007?
• Reduction in oil imports
• 2008 0.2 Q
• 2015 0.8 Q

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RESIDENTIAL/COMMERCIAL

• 2004 used 2.36 Q
• Conservation/solar heating/district heating
• Near term potential maybe 0.1 Q (a guess)

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TRANSPORTATION

• Need at least another 5 Q by 2015
• Increased light vehicle efficiency
• 2010 Base Case--Total 30.7 Q Light vehicles 18
  Q, Freight trucks 5.4Q, Aircraft 3.3 Q
• Suppose 25 of light vehicles had 40 mpg
  performance by 2010 2 Q reduction
• By 2015 a 4-5 Q reduction might be possible
• Decreased light vehicle usage
• Economics will operate to achieve a reduction in
  the long run but people have to be convinced that
  prices will remain high
• May require substantial rebuilding of US
  residential and commercial infrastructure

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INCREASE VEHICLE MILEAGE

• Mandate fuel efficiency
• Build lighter vehicles
• Diesels
• Hybrids
• Plug-in hybrids
• Fuel cells
• Better maintenance through information/enforcement
  

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REDUCE MILES DRIVEN

• Increase fuel taxes
• Reduce subsidies for petroleum fueled vehicles
• Encourage mass transit
• Encourage centralized development

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PROVIDE ALTERNATIVE FUELS

• Ethanol
• Biodiesel
• Natural gas
• Electricity
• Hydrocarbons from tar sands
• Hydrocarbons from oil shale
• Liquid fuel from coal
• Hydrogen

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MY (TENTATIVE) CONCLUSIONS

• By 2015, with substantial improvements in vehicle
  mileage, sufficient supplies of alternate fuels
  and policies that reduce mileage driven we could
  achieve security from a short-term, US-focused
  Persian Gulf oil supply interruption
• There is almost nothing we can do before 2010
• There will necessarily be some major disruptions
  in the American economy and probably life style
• Achieving this goal will likely accomplish at
  least some carbon dioxide reduction and prepare
  us to face a global shrinkage of the oil supply