The Basic Facts: Supply and Demand

The U.S. consumes 21 million barrels of oil a day; that is same as 7.5 billion barrels of oil per year. See chart above. (Imagine 7.5 billion barrels, 42 gallons each.)

The U.S. consumes an amount equal to the next 5 top oil-consuming countries combined—and that includes China and India, which are both growing at an exponential rate.

Our country is understandably and undeniably addicted to oil. Our economy was built on it—giving us the strength that we have traditionally had. But what was once a source of strength has now created a larger weakness.

As shown in the above chart, with 4% of the world’s population, we consume 25% of the world’s oil.

Text Box: At $140/barrel, the U.S. is on track to spend $1 trillion on oil a year.

This 7.5 billion barrel per year demand translates into an annual budget of $1,000 billion, also known as $1 trillion, for oil.

And each $1/barrel increase in the cost of oil translates into a $7.5 billion “tax” on the U.S. economy.

*Source: U.S. Energy Information Administration

Text Box: The US has 4% of the world’s population, yet consumes 25% of world’s production.

Text Box: Each $1 increase in price of barrel of oil is a $7.5 Billion hit to US economy.

*Source: U.S. Energy Information Administration

This year, about $2.5 trillion of wealth will move from the energy-consuming to the energy-exporting countries. This rate of transfer remains for so long as current trends continue.

WEALTH TRANSFER: The Saudis, as an example, are raking in an unprecedented $1.5 billion per diem of oil revenues.

High-priced oil has set the stage for the largest transfer of wealth in the history of the world.

Saudi Arabia is the world's largest producer of oil at 3.9 billion barrels per annum. Russia, has leapt from nowhere into a position rivaling Saudi Arabia with annual production of 3.5 billion barrels.

The United States, while the world’s third largest producer of oil at 3.0 billion barrels per annum, still must import 4.5 billion barrels per annum to cover is consumption requirements.

*Source: BP Statistical Review of World Energy June 2008

Text Box: Even with 3.0 billion bbls of production, the US must import 4.5 billion bbls per year.

*Source: U.S. Energy Information Administration

DEMAND

SUPPLY

A GLOBAL COMMODITY: The problem is not “foreign oil.” Because oil is a global commodity, the problem is oil dependence itself (and to a lesser extent, natural gas). We have all received emails asking us not to purchase brand X petroleum. In the world markets, if we don't purchase oil from Country X, then someone else will. It is a global market.

No matter which countries we purchase from, the market stays the same and oil dependence continues to fund hostile and repressive regimes. Oil reserves are increasingly controlled by those who seek to oppose the U.S., challenging our security and traditional values.

Oil used to be an asset to our nation, but now both conservatives and liberals should agree that it is time to move beyond oil — not just for the environment, but for the health of our economy and the security of our nation.

THE PROBLEM IS OIL, NOT “FOREIGN OIL”

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The Basic Facts