Energy - Environmental Science - page 291

petrochemicals, are used as raw materials in indus-
trial organic chemicals, pesticides, plastics, synthetic
fibers, paints, medicines, and many other products.

discouraged improvements in energy efficiency and re-
newable energy resources that might make the United
States less dependent on oil imports from the Middle
East and other countries.
Despite an upsurge in exploration and test drill-
ing, U.S. oil extraction has declined since 1985, and
most geologists do not expect a significant increase in
domestic supplies. The United States produces most of
its dwindling supply of oil at a high cost, about
$7.50-$10 per barrel compared to about $2.50 per bar-
rel in Saudi Arabia. Thus, opening all U.S. coastal waters,
forests, and wild places to drilling would hardly put a dent
in world oil prices or meet much of the U.S. demand for oil.
In 2004, the United States imported about 62% of
the oil it used (up from 36% in 1973, when OPEC im-
posed an oil embargo against the U.S. and other na-
tions). It got most of its oil from four nations (in order
of importance): the non-OPEC nations of Canada and
Mexico and the OPEC nations of Venezuela and Saudi
Arabia.
According to the DOE, in the not-too-distant fu-
ture the United States will have to depend more on the
Middle East for oil, because it contains by far most of
the world's discovered and undiscovered oil. Reasons
for this high dependence on imported oil are declining
domestic oil reserves, higher production costs for do-
mestic oil than for most oil imports, and increased oil
use. The United States could be importing as much as
70% of the oil it uses by 2020. But it will be facing stiff
competition for world oil supplies from rapidly indus-
trializing China.
Some analysts favor depending on oil imports.
They argue that using up limited and declining do-
mestic oil supplies is a drain-America-first policy that
will increase future dependence on foreign oil sup-
plies. Indeed, if the United States stopped importing
oil and depended totally on domestic supplies, its
proven reserves would last only about a decade at cur-
rent consumption rates.
Bottom line: If you think of U.S. oil reserves as a
six-pack of oil, four of the cans are empty. Geologists
estimate that if the country opens up virtually all of its
public lands and coastal regions to oil exploration, it
may find at best about half a can of new oil at a high
cost (compared to much cheaper OPEC oil) and with
serious harmful environmental effects.

Geology and Economics: Global Oil Supplies—
OPEC Rules
Eleven OPEC countries—most of them in the Middle
East—have 78% of the world's proven oil reserves and
most of the world's unproven reserves.
The oil industry is the world's largest business. Con-
trol of the world's current and future oil reserves is the
single greatest source of global economic and political
power.
Oil reserves are identified deposits from which oil
can be extracted profitably at current prices with cur-
rent technology. The 11 countries that make up the
Organization of Petroleum Exporting Countries
(OPEC) have 78% of the world's crude oil reserves.
This explains why OPEC is expected to have long-
term control over the supplies and prices of the
world's conventional oil. Today OPEC's members are
Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria,
Qatar, Saudi Arabia, the United Arab Emirates, and
Venezuela.
Saudi Arabia has by far the largest proportion of
the world's crude oil reserves (25%). It is followed by
Canada (15%), whose huge supply of oil sand was re-
cently classified as a conventional source of oil. Other
countries with large proven reserves are Iraq (11%),
the United Arab Emirates (9.3%), Kuwait (9.2%), and
Iran (8.6%).

Science and Economics Case Study:
U.S. Oil Supplies
The United States—the world's largest oil user—has
only 2.9% of the world's proven oil reserves and only
a small percentage of its unproven reserves.
Figure 13-7 (p. 292) shows the locations of the major
known deposits of fossil fuels in the United States
and Canada and ocean areas where more crude oil
and natural gas might be found. About one-fourth of
U.S. domestic oil production comes from offshore
drilling (mostly off the coasts of Texas and Louisiana,
Figure 13-7, bottom) and 17% from Alaska's North
Slope.
The United States has only 2.9% of the world's oil
reserves. But it uses about 26% of the crude oil ex-
tracted worldwide each year (more than two-thirds of
that for transportation), mostly because oil is an abun-
dant, convenient, and cheap fuel. Indeed, when ad-
justed for inflation, oil costs about as much today as it
did in 1975 (Figure 13-8, p. 292). Although low oil
prices have stimulated economic growth, they have

Global Outlook: How Long Will Conventional
Oil Supplies Last?
Known and projected global oil reserves should last
for 42-93 years and U.S. reserves for 10-48 years,
depending on how rapidly we use oil.
The world is not yet running out of oil. But like all nonre-
newable resources, oil supplies are eventually expected