The Struggle Of Oil In America Essay
The Struggle Of Oil In America
Since its discovery 150 years ago, petroleum oil has become lifeline of the world, the functional equivalent of blood in the human body. The mechanism driving the entire transportation system from automobiles, airplanes, railways, ships to space rockets is based on utilization of energy of petroleum oil. Petroleum products are also extensively used in a number of infrastructure industries that form the core of industrial processes and basis of existence of modern world.
However, the petroleum resources of world are very limited and they cannot endlessly meet human demands. Various estimates have put the total extractable oil stock to exist for another 50-75 years if world continues to consume them at present rate. After that the cost of extraction of remaining petroleum products would become much more than the benefits obtained them and world would require new resources of energy to exist. These concerns have already spawned intense research in alternative technologies to meet the future energy needs in the face of an impending petroleum crisis.
United States of America is world’s leading consumer of petroleum products accounting for approximately 25 % of total consumption of petroleum oil world over. In 2003, world’s consumption of petroleum oil stood at around 80 million barrels per day, out of which US’s share was close to 20 million barrel (Hirsch, Bezdek, Wending, 2005). To meet these huge petroleum demands US depends crucially on oil imports that is well above 50 % today and continuing to rise upward.
This overwhelming dependence on imported oil poses various strategic and security challenges for US interests in the long run. The sharp oil price increases of 1973 and 1979-81 serve as testimony to the dangers of import dependence. Further as the oil sources would continue to deplete, the prices of oil would steadily and inexorably rise until the level when world is faced with an acute fuel crisis. Based on these observations it’s vital that U.S explores alternative technologies and fuels to sustain its development and growth structure.
The continuous rise in U.S oil consumption has forced it to rely increasingly on imported oil to meet its expanding requirements. In the past 50 years, oil consumption fell just on two occasions that were marked with international increase in prices of oil, in 1973 and 1979-81.. Domestic production of oil that peaked in 1971 has fallen since then while oil imports have continued to rise, crossing the domestic supplies in 1994 (EIA, 2005).
The net imported oil share in the net oil consumption was 34.8 percent in 1973 which went lowest at 27.3 percent in 1985 but since then it has continued to rise against a dropping domestic production levels (Reaardon, 2002). The upward trend in oil consumption and consequently in oil import have continued to take place despite multiple efforts and policy intervention that government has tried to introduced (Deutch J, Schlesinger J.R, and Victor D.G., 2006, 29).
As of today with its 20 million barrel per day consumption U.S is the largest consumer and importer of oil, surpassing the combined consumption of Japan, Germany, China, Russia and South Korea (Reardon, 2004).. The share of oil in total energy produced in USA is just 17.2 percent while in consumption it rises to 40 percent that explains the need for huge oil import. Imports constitute 11 million barrels per day that is more than the aggregate oil import of Japan, Germany, and South Korea (Reardon, 2004).
For oil imports U.S relies heavily on Canada, Venezuela and Middle east oil with Canada being the single largest exporter country of oil to U.S. However as a group the OPEC dominates among all the exporters supplying more than 50 percent of total oil imported by U.S (Petroleum Navigator, 2006). The total petroleum imports for U.S stood at over 5 billion barrels in 2005 out of which crude oil constituted 3.69 billion barrels which means that oil accounts for almost three-fourth of the total imports (Petroleum Navigator, 2006). Finished petroleum products constituted the second largest import segment with close to 15 percent contribution.
The bulk of the oil consumption takes place in the transportation sector, which accounts for the 69 percent of the total oil consumption in US (Basic Petroleum Statistics, 2007). Overall there are five major sectors accounting for petroleum oil consumption. These sectors, along with their consumption share in year 2005 are (Petroleum-EIA, 2006)
- Domestic/Household: Consumption in 2005 was 869 thousand barrels of petroleum per day
- Commercial: 386 thousand barrels of petroleum per day
- Industrial: 5061 thousand barrels of petroleum per day
- Electric Power production: 545 thousand barrels of petroleum per day
- Transportation: 13, 825 thousand barrels of petroleum per day.
A breakup of consumption pattern in the transportation sector reveals that consumption stands highest for motor gasoline. Average daily consumption of motor gasoline in U.S, according to Petroleum data (EIA, 2005) is 8933 thousand barrels per day. Distillate fuel oil is the second most consumed petroleum product with daily consumption at 2817 thousand barrels.
These figures give a realistic view of inevitable oil import dependency U.S for present and future if it carries on the present rate of consumption. Indeed the chances to curb the massive oil imports are slim considering the fleet of 210 millions vehicle that depend solely upon motor gasoline for their functioning (Hirsch R.L, Bezdek R, Wending R, February 2005, 4). As on 1st January 2006, the total proven oil reserves with U.S was just 21.6 billion barrels, which implies that in future U.S would be forced to rely almost completely on oil imports for its entire transportation requirements.
As the closer sources shall run dry, U.S’ dependency would shift to further sources from where oil must be transported over vulnerable supply lines, leading to rise in global oil price. The greater risk is certainly compromising with U.S national interests. The oil supply lines would always be at risk against subversive elements requiring another set of huge investment in ensuring safe transportation of oil to U.S onshore facilities. It will also place U.S interests in the hands of oil cartels such as OPEC that may freely manipulate oil supplies according to their own interests.
The shortage of oil would be more manifest in coming times as oil demands are growing world wide, especially in China and India with rapidly expanding economy, transportation system and consequently requirement of petroleum oil. Even at present consumption rate there are grave uncertainties on the secure prospects of future supplies within next 50 years time frame, and the rising consumption rates threatens to bring the approaching crisis nearer. United States is thus faced with a great responsibility to secure its future interests without sacrificing its present requirements and needs. This issue forms the topic of the next section.
Part II: Alternative fuel technologies
The impending oil crisis has finally stirred policy makers in US. A number of approaches are suggested that include a. imposing taxes on oil consumption b. using tradable gasoline permits and c. exploration of new sources of oil ( Deutch J, Schlesinger J.R, Victor D.G. 2006 ).
However, the pressing need of situation demands measures that would sustain the present structure while safeguarding the future against depleting sources and rising petroleum prices. As the world’s oil reserves are finite, even measures such stagnating oil consumption and using oil more efficiently are just helpful in delaying the inevitable without offering any permanent solution to the issue. Oil reserves are going down steadily and within a couple of decades prices will soar up inexorably disrupting the economy, industry and society in turn.
The only practical solution to this problem is technological innovations in energy field that can reduce dependence on petroleum oil by providing alternative and sustainable sources of energy. It shall serve two immensely useful purposes that are a. minimizing U.S dependence on foreign oil and b. preventing the environment from damages associated with use of petroleum oils and products. The certainty of oil exhaustion has inspired efforts from both government and corporate sector to research and develop the new fuel technologies as a providential measure for survival, growth and progress in forthcoming days of oil crisis.
Past decade has seen great thrust on technological researches in alternative fuels. Various new techniques and models have already been introduced in the market to test their viability and capacity to successfully replace petroleum as chief source of energy.
Most of these innovations are specifically aimed at transportation sector owing to its liability as chief consumer of petroleum oil and as principle cause of soaring oil imports. Due to distinct requirements of different sectors in transportation, the technologies vary. Passenger vehicles, public transport vehicles and freight transportation carry specific needs that are difficult to be met by a single alternative fuel technology. Some of the major and most popular of these technologies, where majority of research and development has taken place, are (Aldrich, 1996)
1.Hybrid Vehicle, 2. Bio-diesels 3. Ethanol 4. Hydrogen and 5.Solar energy
Following section discusses the technology used in each of these new vehicle-systems and their benefits over conventional gasoline based internal combustion engine.
Hybrid Vehicles: As the name suggests, hybrid vehicles combine dual technologies for their operation. Technically they are hybrid electric vehicle with an electric motor that drives the vehicle (Hoogma, Kemp, Schot and Truffer, 2002, 41 ). In the case of a typical electric vehicle, hydrogen fuel cell or chemical batteries such as advanced sealed lead battery, nickel cadmium and lithium ion are used for auxiliary power (Aldrich, 1996). However in the hybrid electric vehicles, the electric drive technology is combined with a gasoline-based power generator for running the electric motor and charging the batteries.
Hybrid vehicles are either full hybrid or mid hybrid. A full hybrid vehicle can move forward from standstill purely on electric power while a mid hybrid requires gasoline power for initial movement, although both technologies concentrate on maximum utilization of electric motor power while reducing the use of gasoline as far as possible (Hybrid Terms, 2007). The electric motor and internal combustion engine (ICE) are connected either in parallel or in series in a hybrid vehicle.
In parallel hybrid cars, power to engine is supplied by both the electric motor and internal combustion engine while in the series hybrid car the gasoline engine powers the electric motor and batteries to generate electricity, without directly providing power for the vehicle (Hybrid Electric Vehicles, 2007). There is another category of hybrid vehicles, called as ‘plug-in hybrid’ that can operate as a full electric vehicle. They require some additional batteries and use electricity net to charge the batteries thereby minimizing gasoline use to its lowest possible levels (Hybrid Terms, 2007). All hybrid electric vehicle use computer that constantly monitors speed, power required and charge conditions of batteries (Hybrid Electric Vehicles, 2007).
Bio-diesel: Bio-diesel, as the term suggests, is a type of renewable fuel obtained by agricultural products and used as fuel in heavy-duty vehicles. The major sources currently under research for bio-diesel are soybean, rapeseed, corn, cottonseed, peanut, sunflower, and canola (Aldrich, 1996, 85).
The process of making bio-diesel involves use of an alcohol such as methanol which is treated with oil of selected agricultural produce to form glycerin followed by separation of fatty esters, recycling of excess alcohol and purification of esters to produce a fuel that bears remarkable closeness to diesel, however with higher octane number (Aldrich, 1996, 85). Currently bio-diesel is used when blended with petroleum diesel, especially in European markets, with commendable results.
Ethanol: Ethanol as a very long history as an alternative fuel, and it was tried in even 1880 as a fuel option for Ford cars (Aldrich, 1996, 51). Ethanol is derived from agricultural produces by process of fermentation and distillation to form a high-octane liquid fuel. Normally ethanol is not used alone as a fuel, instead it is blended with gasoline in ratio of 85 percent ethanol and 15 percent gasoline to form a fuel E-85, which is approved as an alternative fuel in US (Ethanol, 2007). The vehicles run on this fuel are called as flexi fuel vehicles.
Ethanol has emerged as a successful alternative to fossil fuels in Brazil where more than 4 million vehicles on ethanol based fuel and it is finding increasing application in US as well. The benefits of using ethanol are multifold and they include (Ethanol, 2007)
Hydrogen: There are great interests in using hydrogen as fuel in transport industry due to the great flexibility of options and performance it offers. Hydrogen can either be used as fuel in place of gasoline in internal combustion engine or it can be used as energy carrier in fuel cells, the latter being the major research area in automobile sector (Aldrich, 1996, 87).
Solar Power: Use of solar power as energy in transportation sector has been subject of intense technological research. While the solar energy has found wide application as domestic energy supply, there are difficulties in their application in transport sector. Photovoltaic cells, that absorb sunrays to provide electricity, are inefficient under the current technology strains and unable to generate even a fraction of required power to drive a normal passenger vehicle.
However, solar power has turned as a dependable source of energy in areas other than transport. All the initial costs are high in maintaining a solar energy power plant, its been shown that with increasingly sophisticated technology and wider application the cost of installation as well as generation of electricity can get comparable to normal power plants (Borowitz, 1999,112).
Mass Transport System
Apart from introducing alternative fuel and technologies to replace and minimize fossil fuel consumption, another area where fuel consumption can be easily reduced is creating a more robust and functional public transport and mass transit system. It is cost effective and time consuming to redesign the existing public transport system, especially in major cities, to cut down fuel consumption by reducing number of vehicles on the road. While airplanes are already a popular and heavily used long distance intercity mass transit system, there are many available areas of intervention in short distance intercity and intra-city transport to provide fast and reliable transit facilities while simultaneously reducing traffic, freeing up space on roads and parking and moderating fossil oil consumption.
The transportation system of US, excluding freight transport, is presently divided in two broad categories a. privately owned individual all purpose vehicle transport system and b. public transport system consisting of buses, trains, trams, and metros under the control and maintenance of public administration and public transport companies ((Hoogma, Kemp, Schot and Truffer, 2002, 36-37). Public transport system is usually characterized by low cost, fuel-efficient transit system capable of carrying large number of people on a fixed route (ibid). It has been felt over time that a sustainable and efficient fuel policy needs to incorporate advanced public transport system as one of its key focus area.
To improve the services of public transport system, increase its popularity and acceptance among people and highlight its role as an efficient and fuel incentive mode of travel, public authorities and corporations are required to introduce some important policy and technological measures.
Three policy measures as highlighted by Hoogma, Kemp, Schot and Truffer (2002, 43) are 1. Developing an integrated public transportation system where a single ticket can be used to commute irrespective of the number of switchovers made in the process. 2 Development of strong travel information structure in the public transport system, which can help people to navigate to their destinations easily. 3. Providing easy payment facility such as smart cards. These policies would greatly enhance the image and services of public transport system.
Additionally the light rail and bus services can be expanded to cover specifically high traffic and downtown areas of major cities. An integration of public transport and private vehicle system can be achieved by providing sufficient parking space at stations and depots of public transport system. It would encourage people to use their private vehicles to access public transport system, resolving one of major issues of limited accessibility involved with mass transit system.
When fossil fuels were discovered around 150 years back, the existing technologies of steam engines were unable to utilize them. However, soon completely new technologies were developed in the face of these new energy sources and they were used to capitalize on the energy content and efficiency of fossil fuels. Soon petroleum fuels revolutionized the way the world moved and worked. The past 100 years of consumption has comprehensively depleted non-renewable petroleum deposits and estimates give another 50 more years before the remaining available sources would get almost exhausted.
This fact is indeed a cause of concern, but only if viewed from existing technological frame. Declining petroleum resources offer the signal that its time to make transition towards different energy sources. Countries that would fail to read this signal or close their eyes to it are certainly heading for a major crisis. But fortunately US has the capacity to read these signals and develop reliable intermediate technologies and systems such as hybrid electric vehicle, ethanol and public transit systems that would considerably reduce fossil fuel consumption without adding to infrastructure cost thereby extending the life period of petroleum reservoirs.
Meanwhile research can take place on new age technologies such as fuel cell and solar photovoltaic cells to complete replace fossil fuels as a source of energy. It is possible that if government and industry institute providential policy measures, there would be a host of alternative technologies in transportation sector by the time petroleum oil would get exhausted.
But the question is that has US opened its eyes to the approaching crisis of oil shortage and if so, then what are the policy measures that are being taken to avert and stultify the crisis. Depleting oil resources are a reality, and it is certain that within decades oil prices would climb to astronomical height, bringing the entire present system to standstill. The whole structure of US is running efficiently on the energy of petroleum and it would collapse if this energy dries up. The responsibility to start transition towards new system, however, is not only of government but of every person because the future of crisis would be a common future. It would a collective exercise upon to use alternative technologies in their personal life, make maximum possible use of mass transit system and send the message to government and industry that people are ready for the great shift from petroleum oil.
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University/College: University of Arkansas System
Type of paper: Thesis/Dissertation Chapter
Date: 20 March 2017
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