This first week of my blog, more like first few days, is not nearly enough time to adequately address the current policies, problems, and potential profits of the ongoing petroleum concerns faced by the average American consumer. I do want to bring forth a few points of significance in relation to this topic
• America produces 5.4 million barrels of crude oil per day, 164 million barrels, per month, and almost 2 billion barrels per year.
• The United States produces 72 billion cubic feet (bcf) of natural gas a day, 2,200bcf per month and 26,000bcf per year.
– The United States is estimated to have enough natural gas to meet 100 percent of current domestic demand for at least 90 years.
• The top five producing countries in the world are:
– Oil: Saudi Arabia, Russia, United States, Iran and China.
– Gas: United States, Russia, Canada, Algeria and Iran.
• World petroleum consumption is almost 84 million barrels/day.
• In 2009, 41 percent of total U.S. energy consumption was used in residential and commercial buildings, 30 percent in industrial activities and 29 percent in transportation.
• The top five consuming countries in the world are:
– Oil: United States, China, Japan, India, and Russia.
– Gas: United States, Russia, Iran, Japan, and the UK.
• The United States imports oil from all over the world, not just one region. The top five imports come from:
– Canada (2.1 million barrels per day), Mexico (1.2 million barrels per day), Nigeria (1.1 million barrels per day), Saudi Arabia (1.0 million barrels per day), and Venezuela (1.0 million barrels per day).
These countries are not all friends of ours. Venezuela openly attacks the US verbally. All but Canada have a history of blocking US Security actions at the UN. Are we really willing to let the dictator Hugo Chaves, the communist Hu Jintao, and the seat of Wahabism take more of our money? To what ends will they use our money? Will it be for the benefit of their people? I doubt it seriously; the money we send them will not even make it down to the people on the streets. None of these countries are well known for workers being paid good wages or espousing honest business and government operations. Nigerian people are fighting, killing, taking hostages to receive a fair share of the petro dollars going into the country. Saudi Arabia, the birth country of the now dead Bin Laden, is not a friend of the West. The Saudis are more likely to side with Iran than the West on most issues.
Would developing our oil and gas resources be an overnight turn around? Not by any means. One refinery that is still in the process of being allowed to be built (this process started in the late 1990’s) would take an estimated 13 years of production to turn a profit. But, over those 13 years, how much money would the workers at that one plant put back into our own economy? Fact Check (factcheck.org) posts that existing refineries have been running at or near full capacity since the mid-1990s, but are failing to meet daily consumption demands. Yet there hasn't been a new refinery built in the U.S. since 1976. Why? Several factors: Building a refinery is expensive, there are a lot of environmental restrictions on where and how they can be built and nobody wants to live near one. One company, Arizona Clean Fuels, has been trying to construct a refinery in the Southwest since 1998. Getting a permit to build took seven years, and the company twice changed the plant's proposed location because of environmental restrictions and land disputes. The refinery is projected to have a $3.7 billion total price tag. The EIA recorded per-barrel profits of $5.29 in 2006; at that rate, the 150,000-barrel-per-day refinery would need to operate for almost 13 years before its profits outweighed the cost of building it.
First, drilling for oil within US waters is going to happen. Will U.S. companies do it using tools and techniques that are some of the friendliest towards the environment or will it be a foreign entity using horizontal drilling techniques without any concern for U.S. waters and safety regulations? Drilling in our waters will happen, it is inevitable. By 2030 an estimated 92% of the world’s oil and gas reserves will be in the United States and Canada. Why should we wait? Why not act now.
Second, refining the crude extracted is going to be difficult at current facilities inside the U.S. Currently there are half as refineries as there were in 1982. These refineries are not meeting the current demands. How can I say that? Oil imports right now are roughly at 49%, according to Energy Information Administration. Curious, how the Department of Energy was created to lessen our reliance on imported oil after the 1970’s OPEC oil embargo and now, it seems, that we are importing significantly more oil than when that agency was opened. At any rate, there are now 149 operating refineries, down from 301 in 1982. How many jobs were lost with those 152 refineries? How many workers were at those plants? How many businesses benefitted from those employees? How much purchasing power died with those 152 refineries?
The refineries that are still operating are running at near or full capacity and they are unable to meet the requirements of our society. Remember Arizona Clean Fuels? Trying to get going since 1998 … ouch! That is a long and expensive venture. They are still not completed and operating.
So, current government regulations make it quicker and easier to send U.S. jobs and money to other countries in order to fuel the buying and production power of the U.S. That makes no sense to me. We are currently in the highest unemployment numbers since the depression. I would suggest that the governing bodies pull their brains into the proper place and do what they can to speed up the process of bringing those jobs, petroleum resources, and energy security back to the people whom they allegedly represent.
Well, that is my take on it. The resources used in this production are posted.