Do you think that the Bush Administration should do more to reduce America's dependency on oil?
Oil
In 1973/1974 there was a major global oil crisis as a result of 1973 Arab-Israeli war. On October 20 2003, the Arab oil-producing countries (OPEC) placed an embargo on oil supplies to the US. Prices rose sharply all over the world from $3 to over $11 and the world went into an economic recession. Speed restrictions were made on the roads to save fuel. These were not lifted until 1995 in the U.S. At the time, energy-saving measures and investment into alternative forms of energy were initiated, but these mostly fell by the wayside as the emergency eased. Oil is now over $50 a barrel.
One "improvement" in the American situation is that it relies less on energy-hungry manufacturing industry than it once did, having moved more towards service industries. On the other hand, demand in the USA is up partly because of the fashion for gas-guzzling sports utility vehicles (SUVs). The U.S. market currently uses almost 21 million barrels of oil and petroleum products each day. China and Japan are the world's second- and third-biggest oil consumers, respectively, after the USA. Demand in China is up because of development and population growth.
Oil companies are struggling to keep up with current demand. For example, Shell said recently that its proved reserves, 11.9 billion barrels of oil equivalent (boe) at the end of 2004, were equal to less than nine years' production at average 2004 rates. According to Reuters, "Most of the large international oil companies (IOCs) are finding it increasingly hard to make new oil finds big enough to meet their goals to replace and increase production, threatening their long-term health". The world's biggest reserves are in the hands of the national oil companies of Middle Eastern states.
Saudi Arabia is the world's largest oil exporter. It is also the only one likely to be in a position to increase production - though not of the kind of oil suitable for conversion to gasoline. Saudi Arabia is currently battling with militants. Russia is the world's second largest oil exporter. Russia's largest company, Yukos, is having problems with the government. Norway is the world's third largest oil exporter. Norway is already extracting at full capacity (about 3.2 million barrels of oil per day) and expects its oil production to decline as major fields age.
Several other countries extracting oil are subject to either internal or international tensions, or both. Iraq oil production is still being affected by violence. Iraq used to be the world's second largest oil exporter. Venezuela is the world's No. 5 or 6 oil exporter, with most of its oil destined for the United States. There have been strikes in Venezuela, however, and there are tensions between the two countries. Nigeria, around 8th, is going through a period of ethnic tension. Civil war and now Marburg virus have damaged Angola's capacity to extract oil.
Statistics from the Energy Information Administration (EIA).
These days oil is seldom out of the news. In addition to the news relating to the current energy bills, the war in Iraq and to the U.N. Oil for Food scandal, there have recently been:
The World Energy Outlook 2004 from the International Energy Agency (IEA) predicted that global energy demand would soar by 60% over the next 25 to 30 years, and that "The Earth's energy resources are more than adequate to meet demand until 2030 and well beyond". It is gloomier about pollution and energy security, however, and costs of extraction are expected to increase as productive oil wells begin to empty (extraction tends to be easier and cheaper at the beginning when an oil reservoir is "full") and as less profitable fields need to be tapped.
Bush Encounters Hurdles on Energy Agenda,
Democrats Hit Bush on Gas Prices, Energy Plan
President Bush has not kept his 2000 campaign pledge to keep oil prices low and pass legislation to boost more domestic energy production. The economy
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