According to Jeff Rubin, in his book Why Your World Is About To Get A Whole Lot Smaller (2009) (read my review of Jeff Rubin here), the U.S. is two-thirds dependent upon foreign oil sources. That means roughly 66% of its oil usage comes from other countries. Do you know which ones? I’ll tell you one thing. Iraq is not in the top 5. You may be surprised to know that the largest exporter of oil to the U.S. is actually not even in the Middle East…. it’s Canada.
The top five sources of U.S. oil imports:
1. Canada. Specifically, the Canadian oil sands (northern Alberta), which is a large patch of extremely difficult-to-extract bitumen (oil mixed with sand), so thick that even after heating it doesn’t flow easily and its extraction has atrocious environmental side effects. Sadly, it requires one unit of oil energy for every three extracted. This is not an efficient number at all. Turning to Canada’s oil sands, as rich and plentiful as they are, is truly scraping the bottom of the world’s oil barrel. Worse, the extraction here isn’t even profitable if oil prices can’t stay above $90 or so. Since the 2008 recession, projects have been canceled left and right in the oil sands.
2. Saudi Arabia. Historically has been the world’s largest cheap and easy-flowing oil supply, but the fact now is that the Saudis keep true reserve numbers under close wraps. We don’t know exactly how much they really have left. But what is true is that export numbers from Saudi Arabia to the U.S. are falling. Moreover, “in 2008, Saudi King Faisal claimed the desert kingdom needed $75-per-barrel oil to justify any expansion of its production capacity.”
3. Mexico. The reason Mexico is no longer #2 on the list is that its exports are falling even faster than Saudi Arabia’s. They’re falling so rapidly that soon Mexico will not even be an exporter of oil at all.
4. Venezuela also has oil sands, in the Orinoco region, but production here is also stagnating. “The country’s exports haven’t grown in a decade.” And it’s not due to politics. Falling oil prices even sent Chavez back to courting multinationals.
5. Nigeria. According to Rubin, “while Nigeria has the capacity to produce roughly two and a half million barrels a day, it never actually does. Anywhere from 500,000 to 1,000,000 barrels per day is typically offline because of attacks on either pipelines or rigs.” For the same reasons, new production can’t get very well underway. Nigeria can’t be counted on as a reliable fossil fuel source going into the future.
What do all these sources have in common? Their exports are slowly, predictably, or problematically (for economic or political reasons) drying up. And this doesn’t even look at the oil needs of all the other countries in the world.
Not only are foreign sources for new U.S. money borrowing predicted to dry up, but foreign sources of all the oil guzzled in the U.S. are definitely drying up. If U.S. consumers can make dramatic changes to their energy usage (not just driving cars, but even eating locally), it can help slow fossil fuel decreases and address this imbalance. Of course, China and India might still step up and continue guzzling for everyone else, but that’s another point. And what may or may not really surprise you is who’s using the most oil per capita…. hint: who has the most oil? I’ll tell you more about it tomorrow.
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