problems of U.S. dependency on foreign oil

cost of purchase Persian Gulf unrest

before 2003 Iraq war, cost of presence in region was $50 billion per year

cost averages to $61 per barrel (added to the 2002 market price of $30 per barrel = actual cost of $91 per barrel)

with costs of war (reconstruction, cleanup, etc.), real price of Persian Gulf oil is about $170 per barrel

resource limitations

U.S. crude oil production is decreasing on basis of “Easter-egg hypothesis,” there is

little hope for new major finds in the U.S. (last major find was Alaskan field in 1968)

most new finds are the result of innovative computer mapping and imaging which pick up on small, unused pockets of existing fields

How much oil will be available for future generations?

about 960 billion barrels of oil have already been used (almost all in the 20th Century)

current demand uses about 30 billion barrels per year

demand will likely reach 40 billion barrels per year by 2020

Hubbert’s Peak

Campbell and Laherrere, two oil geologists, calculated the world’s proven reserves to hold 850 billion barrels estimate based on P50 values of proven reserves

(discounted some reports that seem to have been inflated by OPEC nations)

peak oil production should be reached sometime this decade

once production begins to slow, prices will continually rise as supply will no longer meet demand

oil industry reports suggest a reserve of 1188 billion barrels

oil reserves

Chapter 12.3Other Fossil Fuels

NATURAL GAS most goes for industrial and residential use about a 25-year supply of proven U.S. reserves

gas is continually emitted from oil and gas-bearing geological deposits

likely pushes supply to about 50 years

about 4x more natural gas than oil around the world; however, much of it is inaccessible

can be used to power cars and buses (compressed gas runs about 15% of cars in Argentina)

NATURAL GAS (cont.)

can be converted to a hydrocarbon that is liquid at room temperature (a synthetic oil)

fuel produced is only about 10% more expensive than oil

costs to access northern Canadian and Alaskan deposits, a 3600

mile pipeline is needed at a potential cost of $25 billion gas drilling rigs have been set up on many federal lands

during the past 8 years, including sensitive wildlife areas such as Padre Island National Seashore and the Powder River Basin in Wyoming

natural gas reserves

COAL

in the U.S., 50% of electricity comes from coal-fired power plants

current reserves are estimated at 225 years mining of coal can be hazardous and has

substantial environmental impacts strip mining

destroys ecology of region by removing forests and burying streams in mining waste

federal regulations require reclamation, but it takes decades for some sort of ecosystem to reestablish

COAL (cont.) Clean Coal Technology program

mission of providing a “secure and reliable energy system that is environmentally and economically sustainable”

objective: remove pollutants before or after burning to achieve higher efficiency and reduce greenhouse gas emissions

syngas: coal is mixed with water and oxygen and heated under pressure

sulfur and other contaminants removed before burning

synfuel scam tax credit for any enterprise that changes the

composition of coal for further use in power plants

coal reserves

oil shales and oil sands

oil shale: fine sedimentary rock containing a solid, wax-like hydrocarbon called kerogen under intense heat, kerogen releases hydrocarbon

vapors that can be condensed to a liquid similar to crude oil

oil sands: sedimentary material containing bitumen, a viscous, tar-like hydrocarbon large deposits in Canada are yielding up to 1 million

barrels per day

energy security and policy

threats terrorism global climate change

supply-side policies

exploring and developing domestic sources of oil and gas

increasing use of vast coal reserves for energy continuing subsidies to oil and nuclear industries removing environmental and legal obstacles to

energy development providing access to remote sources of natural

gas

demand-side policies

increasing mileage standards for motor vehicles

increase energy efficiency of appliances and buildings

encourage industries to use combined heat and power technologies

promote greater use of non-fossil-fuel sources of energy (nuclear and renewable)