Barack Obama’s ten year oil plan

August 5, 8:00 PMGlobal Warming ExaminerJohn Ryden

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Democratic presidential candidate Sen. Barack Obama, D-Ill.,
speaks about his energy policy Monday, Aug. 4, 2008, in
Lansing, Mich. (AP Photo/Al Goldis)

Barack Obama has a new energy plan to end U.S. reliance on oil from the Middle East and Venezuela over the next 10 years. This is in addition to other proposals he has made:

• Give families a $1,000 rebate to be paid for by windfall profit taxes on energy companies.
• Borrow oil from the strategic petroleum reserve to reduce gasoline prices.
• Allow conditional and limited off-shore drilling.
• Emphasize alternative energy sources and hybrid vehicles.
  

Reducing or dependence on the Middle East and Venezuela will cost us $150 billion. Is this the same $150 billion he has previously proposed for alternative energy investments?

Ending our reliance on oil from the Middle East and Venezuela really amounts to ending our import of foreign oil. It doesn’t count to just pass a law saying that we won’t buy oil from certain sources because they are politically incorrect. All that does is drive up the cost of oil to us. For example, let’s say we don’t want to buy oil from Saudi Arabia anymore so we pass a law that prohibits the import of oil from there. Since oil is a global commodity, Saudi Arabia will just sell their oil to a country like China. We will import more oil from a country like Nigeria or Libya. It will likely be more expensive to do this. China might save a little money here because they don’t have the same political constraints. This doesn’t solve the problem. It just increases our costs to pay for this oil diversion. We could also become more dependent on fewer foreign suppliers.

Total Imports of Petroleum (Top 15 Countries)
(Thousand Barrels per Day)

Country                       May-08            Apr-08             YTD 2008

CANADA                   2,346               2,534               2,494

SAUDI ARABIA        1,604               1,462               1,547

MEXICO                    1,218               1,364               1,314

VENEZUELA            1,171               1,189               1,163

NIGERIA                      918               1,221               1,106

ALGERIA                     620                  632                  544

IRAQ                            583                  679                  670

ANGOLA                      476                  591                  478

RUSSIA                       441                  402                  417

VIRGIN ISLANDS      340                  340                  340

BRAZIL                        335                  234                  232

COLOMBIA                 278                  169                  210

KUWAIT                       263                  181                  230

UNITED KINGDOM    237                  229                  211

NETHERLANDS       192                  185                  148

Note that this data includes the import of petroleum products. The oil used to produce these products may have originated in another country. From Energy information Administration May 2008 Import Highlights; (July 28, 2008)

We currently produce about 5 million barrels of oil per day and consume about 18 million barrels per day. That means we have to either consume 13 million barrels per day less than we are using now (72% reduction) or we have to increase our domestic production by 13 million barrels per day. There could be some combination or an increase in domestic production and a decrease in consumption, but that is a very large gap to fill in 10 years.

All of the automobiles in the country consume about 9 million barrels of oil per day. Heating oil for homes and diesel fuel for trucks and other heavy equipment are other big consumers of oil. Reducing consumption by 72% would be devastating if alternative energy sources were not available to provide an equivalent amount of energy.

Finding substitutes for oil will be difficult. We currently do not have the technology or infrastructure to produce alternatives for oil as this product is used mostly in transportation. Heating oil can be displaced by either natural gas or electricity. Electricity would be the preferred solution to displacing heating oil, especially if the electricity came from non-carbon polluting energy sources. A large percentage of our heating oil is consumed in northern, industrial states which are not the best places wind power and solar power. Nuclear power is a strong contender for fuel oil displacement, but Obama is opposed to nuclear power.

Again, we are looking at a politician delivering a lot of blue sky and sunshine in his talk, with little substance behind the vision. What Barack Obama might mean is that he wants to reduce U.S. oil imports by 3.5 million barrels per day (20%) over the next 10 years. Where are the details? T. Boone Pickens has a plan that calls for replacing oil with natural gas in cars. He plan has a drilling component to supply all our cars with natural gas. That is currently available technology. It is still a big undertaking. $150 billion over 10 years might sound like it could solve our energy problems, but we really need to find ways to invest 20 or 30 times that amount in alternative energy development. $15 billion per year it is really just a drop in the bucket.