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US Future: Oil Dependency Not the Problem

Aug 5, 2008
The U.S. economy has hummed along for the last fifteen years outpacing the rest of the world by double digits. Things were good. Businesses expanded, homeowners realized massive increases in the value of their homes and they used that equity to continue to grow the U.S. economy by leaps and bounds.

Then, in the summer of 2005, Hurricane Katrina washed away major swaths of Louisiana, Mississippi, and Alabama, taking with her people's homes, lives, and dreams. Katrina was the starting gun to a two and a half year run up in oil prices to their current levels of $130 a barrel. Short supply, political tensions, and speculation have all conspired to keep crude prices higher than we ever imagined.

The United States finds its Achilles Heel

Countries like India, China, and Venezuela subsidize oil prices to their people, while other major industrial producers like the United States, Great Brittan, and Japan pay full fare. The sudden increase in demand has helped push the United States into what some believe is going to be a long and protracted recession. And one of the root causes for all this market turmoil? Gas prices.

The United States has known for years that we needed to address our oil dependency, and yet we still spend $700 billion annually on imported crude. While long term solutions look promising, we need short term answers to jump start the economy. This is why we need to drill in Alaska right now. Just the serious consideration of drilling in ANWR will cut $30-$50 dollars off of a barrel.

Not to mention the 800,000 barrels a day we could eventually produce from the area. That's about 16% of the country's total crude oil production of about 5 million barrels a day. These are staggering numbers that can't be ignored. To further reduce the reliance on oil from unsavory nations, we need to then consider drilling off the Outer Continental Shelf or OCS.

In a 2005 resource assessment report provided to Congress by the Minerals Management Service of the U.S. Department of the Interior, of the undiscovered technically recoverable resources (UTRR) underlying offshore waters on the Outer Continental Shelf, the MMS estimates recoverable resources ranging from 66 to 115 billion barrels of oil and 326 to 565 trillion cubic feet of natural gas.

That's about nine years of oil on the low side baring any further discovery. Is this the answer? No, absolutely not. But to depend on others to secure the future of the United States is even more troublesome. The real answer lies in alternative fuel sources, but no one solution is ready to lead the way. Let's face it, you can't very well use a wind turbine to drive your car or fly a plane.

The end result is that we are going to depend on some form of natural resource for the foreseeable future; coal, oil, natural gas, and hydrogen from natural gas. The question is are we always going to have to have a gun pointed at our heads while we buy it?
About the Author
Robert Barr blogs at Blabrmouth.com . Robert says he started Blabrmouth.com for one reason, he was tired of the way business news was being presented to the general public. All the spin doctoring and screen testing, no one says anything anymore...except him!
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