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US Can Not Permanently Lower Pump Price

The USA can’t drill their way to cheaper fuel prices it is a myth, so the “Drill Baby Drill” chant by the politicians of oil producing states really need to be silenced by logic as the USA consumes “18.6 million barrels per day (MMbd) of petroleum products during 2012” according to eia.gov and 95% of US transportation is dependent on oil. Nor can they build pipelines across the USA full of dirty Canadian oil to Gulf of Mexico for refining, because that oil after processing will be shipped to other countries where the price of oil is much higher–it won’t lower pump prices at home.

USA oil drilling price myth

Drilling for oil anywhere in the USA: Can’t compete with Middle East $10 USD per barrel extraction price.

The Department of Energy’s Energy Information Administration (EIA) estimates that, even if the entire lower 48 OCS were opened to drilling, this would increase cumulative U.S. oil production by only 1.6 percent by 2030 and would have an “insignificant” impact on prices.

Oil production in the USA peaked in 1970 at 9 1/2 million barrels per day.

Oil PipelineAlso the dirty oil from Canadian tarsands is owned by Canadian Corporations and doesn’t magically become US oil just because it is transported via pipeline to refineries in Texas etc. That oil is mostly exported (feel free to research this fact yourself) to other markets not the USA because the US government subsidizes oil and the Canadian Corporations will continue to sell their oil to other markets where they can get a better price.

The USA only owns/controls 3% of the world’s oil reserves, but yet they are consuming 22% of the world’s oil, even though the citizens make up 4.5% of the world’s population! Can anyone see another sustainability issue?

This easily makes the USA the world’s largest oil user by more than three times the second largest consumer (China). The majority of that oil 70% is used in transportation. Even if it was possible for the USA to double, or triple domestic production etc. it would still be only a drop in the proverbial bucket compared to how much fuel the USA burns up in all those gas guzzling pollution creating combustion engines.

All that oil has to be purchased on the open world market. China and India are also now competing for more of that oil every day as their economies continue to boom and put more and more cars on the road relative to the USA.

In 2011 annual auto sales hit 18 million vehicles in China -contrast that with auto sales in the USA that year which totaled only 12.7 million. China has purchased more cars than the USA every year since that time and is projected by the International Energy Agency (IEA) to grow its vehicle fleet from 40 million to 350 million by 2035. A growth in fleet size will obviously mean growth in truck driver recruiting; hopefully companies will be able to find the best drivers for their new fleets. And these trucks will still need looking after once they’re on the road. No doubt the companies involved with all this will be looking to companies like Lytx to help with the management of these fleets.

The US increased production but over last decade prices have increased 250%

The US has increased production but over the last decade prices have increased 250%

Crude oil prices have increased by 250 percent over the last decade while gasoline prices have more than doubled.

The only way to make some headway to mitigating rising fuel prices is for the USA to quickly embrace: public mass transportation, using smaller and/or more efficient cars, and increased use of EVs (hybrid and pure electric cars). Even with the new US Government mandated fuel efficiency standards, that will lower US imported oil consumption-the corporations have their own agenda and will continue to charge the highest price possible to protect their profits.

If you don’t believe me all you have to do is look at retail natural gas prices, the USA has more than doubled production in recent years, and yet there has been no corresponding reduction in prices that consumers pay, so switching over to natural gas won’t help the price of fuel at the pump either.

Any reduction in pump prices will temporary, Saudi Arabia can get a barrel of oil out of the ground for about $10 USD, the same per unit cost for the USA’s shale oil producers is five to six times more. OPEC oil producers just have to keep prices low long enough to drive the USA producers out of business, then they can increase prices again with less competition. The demand for oil in China, India and the rest of the developing world is increasing exponentially faster than in the USA, putting even more pressure on increasing oil prices in the long term.

It would be foolish to purchase a new huge gas guzzling truck or car in the USA today that only gets 15 miles to gallon. If people and businesses were smart they would use this break from high oil prices to invest in non-fossil fuel energy production and Electric Vehicles.

References:
How dependent is the USA on foreign oil
http://www.eia.gov/energy_in_brief/article/foreign_oil_dependence.cfm

Select Committee on Energy Independence and Global Warming, House of Representatives
http://www.gpo.gov/fdsys/pkg/CRPT-111hrpt709/html/CRPT-111hrpt709.htm

Green-Eco-EV News Reporting by Ken Green Burridge

kenneth green burridge

Kenneth Burridge test-drives electric Nissan LEAF in Melbourne Australia

EV of the Year Judge, independent green journalist, photographer, author and sustainability activist that has published over 1000 articles. Mr Burridge’s travels have taken him to over 30 countries and 300+ major cities. He is originally from the USA, but has been residing in Australia for the last seven years. Connect to Ken Burridge on: Twitter, facebook, Google+, Linked in or website