Blue Box 1
Scan Below
7
Conspicuous Consumptivitis??? http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=005iQm
Does the strength of our economy depend on our
individual financial weakness? That can't be right. Help me out here...
-- Paulineee (paulineee_@hotmail.com),
July 10, 2001
Answers
No, it depends on a carefully crafted system that
promotes the latest hip-hop and ignores Debussy, that promotes uninhibted
sexuality but ignores love, that bleats endlessly about human rights but
forgets about human responsibilities. It equally depends upon our children
never learning about such things in school, where they would be un- cool,
at home, where we are too embarrassed to mention them (often because we
don't know enough about 'em).
Our economy is based upon cheap, reproducable,
disposible trash and can only function when that which is real, enduring
and beautiful is hidden from our youth.
If we want to change this then we must begin by
teaching values to our children (presuming we can articulate them
sufficiently well to communicate the ideas).
We must also teach them language (a prickly
subject in Quebec) for language is the medium in which we think. Fuzzy
language leads to fuzzy thought.
I live in Vienna. I go to concerts (Strauss,
Wagner, Beethoven) and I see that 2/3 of the audience is under thirty as
are many of the musicians. Unthinkable in North America.
If our economy is based on consoicuous and
pointless consumption it is because we have failed to retain and teach
anything more enduring. We can change it if we will, but it will require
committment and work.
-- Jeremy Brown (dipdoc@hotmail.com),
July 11, 2001.
Does the strength of our economy depend on our
individual financial weakness? That can't be right. Help me out here...
-- Paulineee (paulineee_@hotmail.com),
July 10, 2001
Answers
No, it depends on a carefully crafted system
that promotes the latest hip-hop and ignores Debussy, that promotes
uninhibted sexuality but ignores love, that bleats endlessly about human
rights but forgets about human responsibilities. It equally depends upon
our children never learning about such things in school, where they
would be un- cool, at home, where we are too embarrassed to mention them
(often because we don't know enough about 'em).
Our economy is based upon cheap, reproducable,
disposible trash and can only function when that which is real, enduring
and beautiful is hidden from our youth.
If we want to change this then we must begin by
teaching values to our children (presuming we can articulate them
sufficiently well to communicate the ideas).
We must also teach them language (a prickly
subject in Quebec) for language is the medium in which we think. Fuzzy
language leads to fuzzy thought.
I live in Vienna. I go to concerts (Strauss,
Wagner, Beethoven) and I see that 2/3 of the audience is under thirty as
are many of the musicians. Unthinkable in North America.
If our economy is based on consoicuous and
pointless consumption it is because we have failed to retain and teach
anything more enduring. We can change it if we will, but it will require
committment and work.
-- Jeremy Brown (dipdoc@hotmail.com),
July 11, 2001.
|
2/3
8
| |
 |
 |
The Propaganda of Prosperity
The human costs of
maldevelopment
by Ivy George
|
| My
people are tired of development, they just want to live" was a sentiment
expressed by Mexican author Gustavo Esteva in his remarks at a
conference of the Society for International Development in 1985. Today
as we are surrounded by the propaganda of prosperity, it is exceedingly
difficult to ponder the exhaustion and exasperation contained in that
statement. The 1980s and 1990s have witnessed expanded investment in
countries that have relaxed foreign investment restrictions. The
friendly logos of Western corporations are seen all over the world from
neon-lit billboards to cars, from electronic items to television
programs. In Eastern Europe, Marx is out and Ronald McDonald is in, and
in Maoist China, Russian prostitutes are available for services.
The size of the global village is shrinking,
the middle classes everywhere are swelling their ranks, the course of
capitalism is secure and the "free" market has triumphed once and for
all. That the gods of the West have won is the gospel of globalism.
While this appears to be the surface picture in the popular press, there
are nagging realities that continue to beleaguer the prosperous
world—the ecological crisis and the population "problem." The two issues
are closely related; I will take up the subject of population and
consider how it fits in the global context.
What of the population question?
What is so problematic about human population that we have to "control"
it? Is talk of "population control" a semantic subterfuge for control of
poor people, women, and other "inferior" peoples (frequently those of
color)?
Is there a Darwinian urge to engage in triage—a
medical practice in wartime when physicians save the strong and leave
the weak to die? Is it a strategy for the rich and powerful everywhere
to carry on as usual with no thought to control themselves and their
numbers? Should we not extend the categorical link between poverty and
population to include wealth as part of this triangle of crisis? No
doubt these are some of the questions I might ask if my class or tribe
of people were the targets of some top-down plans to control growth
among our numbers.
The world, with more than six billion people,
continues to see population increases in the two-thirds world despite a
decline in total fertility rates there. From the standpoint of simple
formulae, galloping birth rates and lagging economic growth rates are
detrimental for social welfare. Economists and demographers see
excessive population growth rates as a direct threat to economic
development, the maintenance of the environment, food security, and
family health and welfare.
In light of this crisis,
international development organizations, the World Bank, foreign
governments, and Third World governments have long encouraged and
instituted family planning programs to reduce the numbers.
Yet rapid population growth in and of itself has not always been
a problem. Europe welcomed an increase in population during the
Industrial Revolution, as did the United States in the 19th century.
Besides the search for natural resources and
raw materials, the value of human resources was also a factor in the
rampages of colonialism in the past. Today governments such as those of
Singapore and the United States welcome the growth in select populations
through their family planning programs and immigration policies. Why
then is growth in some segments of the population seen as a drag on
development—especially if the world’s food supply is adequate for the
feeding of its people, as experts in the United Nation’s Food and
Agriculture Organization and other development agencies have attested to
over the years?
The "problem" of population ceases to be one if there is
adequate distribution of food supplies. The economist
Amartya Sen defines the issue in terms of "entitlement," meaning there
are large numbers of people who have no access to food because of their
social locations. Mahatma Gandhi said, "There is enough in the world for
everyone’s need, but not for some people’s greed."
At this juncture one asks, What is the link
between population density and poverty? Is the relationship cyclical?
While countries like Japan, Holland, and Belgium are densely populated,
little energy is spent on the control of their populations and their
people don’t rank among the world’s nutritionally needy. They trade
their electronic goods for food. Conversely, the Indian state of Kerala
(which, if classified as a separate country, would be ranked as the
ninth poorest country in the world) has low birth rates compared to the
rest of India and other low-income countries. Bolivia, with five people
per square kilometer, is susceptible to famine.
How many people is too many people? Is the "too
many" in reference to their food needs? Are those who are concerned with
needs and resources equally concerned with too few people having access
to too much, such as Americans who represent 6 percent of the world’s
population and consume 35 percent of the world’s resources? Further, is
there a connection between overconsumption and overpopulation? In other
words are consumptivitis and "over"-population two squares on the
rubik’s cube of social questions?
Analysts vary in their
explanations of poverty and population. Nigel Twose of
Oxfam argues that while poverty that deprives poor people of access to
contraceptives is the reason for large families, the poor themselves are
reluctant to have large families. Demographers like Paul Demeny suggest
otherwise—that poor families are not keen to plan families because
children provide social security for their parents.
Regardless of the correctness of their
conclusions, the implication is that reducing poverty will lead to the
automatic reduction of population. However, as pointed out previously,
there are other intervening variables in the equation. In Kerala,
despite low per capita income, birth rates have fallen due to a series
of redistributive measures undertaken by the government. These measures
were enacted in the areas of land reform, price controls on food and
other basic needs, free or inexpensive medical care, public housing,
educational services, and various social and economic policies to
improve the position of the poorest groups in the population.
Research on Kerala and the other
Indian states reveals a weak connection between income and birth rates.
Rather, studies show that the states’ redistribution of wealth
and provision of basic health care contributed significantly to changing
birth rates. Demographer K.C. Zachariah notes that the shifts in birth
rates were brought about in the following sequence: "reduction in infant
and child mortality, followed by or along with an increase in female
education, followed by redistributive policies, and finally the official
family-planning programme."
This cameo illustration of Kerala leads us to
put the subject of population in a larger framework, one in which
population is not treated in isolation from the more critical and
imperative discussion of development and human welfare. Such an approach
rids us of our perception of God’s creatures as a "problem" we must
"control." If we see that all societies are developing, our
discussion of human population growth will cease to be in the
oppositional categories of us and them, rich and poor, Christian and
pagan, First World and Third World.
The imbalance of demographics exists in a more
cosmic imbalance of power relations at multiple levels in the global
community. All are enmeshed in this gridlock of power, hence it
is counterproductive for the long term to isolate population growth and
treat it as mere cause or effect.
"My people are tired of development, they just
want to live." What is the experience of development that provokes such
a response? Essentially, "development" is a post-colonial terminology
and program that has emerged from the West to identify and evaluate
itself and others on the basis of the success of Western industrial
capitalism. The assumption behind development thought is that Western
economic categories of "needs," "growth," "efficiency," and
"productivity" are inherent goods in themselves and are thus universally
applicable to all human societies. The post-colonial era in most
non-Western societies has been one of adopting, accommodating, and
adjusting to this model of "development"—otherwise known as progress.
There is one snag of chimerical proportions in
this paradigm of "development"—the suggestion that development can be
had without the colonization of "other" peoples, cultures, and
ecologies. Historical and contemporaneous dishonesty abounds in the
neglect of this reality among advocates of development. Rosa Luxemberg
has pointed out that colonialism is a constant necessary condition for
capitalist growth. Thus, while development produces certain forms of
wealth, there is an attendant creation of particular forms of human
misery and marginalization. It is this "maldevelopment" that Gustavo
Esteva laments.
When development is enlarged beyond its
conventionally economic connotations, we move toward developing in
concert with the entire creation—not only economically, but socially,
politically, ecologically, and spiritually. Stated simply, an
alternative perspective on development is that it is relational. It is
the process of becoming fully human in relation to God and all creation.
This scheme will resist the creation and
objectification of poor people whereby they are turned into commodities
subjected to the whims of others, or to the cruelties of impersonal
forces. Development is about choice and responsibility for the
individual that frees her to grow personally and socially. Development
is about facilitating the individual to embark on twin journeys—an inner
journey of spiritual realization and an outer journey of affecting
structures around her. Development is about the twin goals of love and
justice.
My use of the female pronoun
with regard to development is not only to be gender inclusive but it is
also to state the fact that women in the two-thirds world have been
victims of development. Alongside her stand all indigenous
people and nature. Scores of studies show that her workload has
increased, her family structure has been split (with the men leaving to
find employment), her control of and access to family resources has
decreased, the "goods" of development such as health, education, and
credit have all been systematically denied to her. This was the
unanimous conclusion at the end of the U.N. Decade for Women in the
1980s. Two-thirds world feminists argue that development is a project of
modern Western patriarchy.
However, it seems too late in the day to carry
on earlier arguments about colonialism, capitalism, the West, and
development. It is beyond dispute that Western values have a
far-reaching impact on the destinies of poor people and the Earth. While
the impact has been largely mixed, it is clear that rich and poor
countries are inextricably intertwined in their relationship of
dependence. This relationship of dependence is unequal, with the rich
and powerful everywhere exploiting the poor to their advantage.
While communism was a reaction to the failings
of capitalism, it too has been a flawed model. Both systems have failed
to reckon with the ontological considerations of human nature operant in
them. It is human nature to exploit, to overpower, and to subdue. It is
equally in the nature of humans to resist evil in their dealings with
power. Thus for all the homogenization brought on by globalization and
development, resistance is also spawned from its recipients. Material
prosperity has not been able to root out the universal desires to pursue
or preserve values of community, language, culture, kinship, and
religion.
In this heyday of global
capitalism, there is no evidence at all that people everywhere will find
work, shelter, food, clothing, health, education, and all the
supercilious "goods" that the multinationals taunt in their faces.
There is a widening gap between the haves and the have-nots globally.
Increasing numbers of poor people and their children are part of this
gap, and it will be these marginalized groups that will challenge the
colonialism of development.
Even as the virus of consumptivitis has caught
the imagination of the rich and the poor alike, so also the dream and
work of solidarity with God and creation grips a critical remnant of
people age after age everywhere. This consciousness for solidarity does
not stem from the hubris of having a "solution" to the "problem" of
population or poverty. Rather, it rests in the knowledge that love,
peace, and justice come about in the freedom of the subordinate
partner—whereby all subordination is ended.
One does not merely have to imagine the
possibilities. We have already been taken over by creative imagination.
The recent report of the young boy in California who was embarrassed by
hair loss from cancer treatment and the response of his teacher and
several of his classmates to shave their heads in solidarity with him
illustrates our capacity to give up freely. My husband is witness daily
to the extraordinary care rendered to young gay AIDS patients by their
partners, gay nurses, and others from the gay community.
The Freirian pedagogy of the poor is
insufficient without an accompanying pedagogy of the rich.
Conscientization must be followed by advocacy and confrontation to bring
about concrete changes in social structures. In the face of corporate
evil, the potential for and the actuality of corporate good also
prevails.
The attempt at equity is a
mutually engaging process between rich and poor, First World and Third
World, church and world, men and women. A unilateral
attempt at social change and development is rife with all the old images
of paternalism and condescension where it is assumed that in time the
"poor" will become like the "rich." The ills of affluence that
post-industrialized societies are going through compels us to redefine
"wealth."
What can we learn from one another? The story
of the Good Samaritan is not merely about giving, it is also about
shattering an ancient apartheid. An orthodox Jew accepts help from the
"other," a pariah, a Samaritan. The Canaanite woman, while pleading on
her ailing daughter’s behalf, actually thwarts Jesus’ agenda. Poor
women, indigenous peoples, and the Earth have much to teach us about the
follies of our consuming culture. We must learn about the poverty of our
abundance and also about the abundance of our poverty.
The process of solidarity is ongoing and
unending—in our personal, national, and international relations we must
understand the virtues of temperance and acceptance. The task of
solidarity is a universal one. It is not merely for the First World in
its relationship to the Third World, but it is also a challenge for the
ruling elites in the Third World in their relationship to the
marginalized.
As the century draws to a close, calls for
personal and collective introspection are a distant wail in a wilderness
burgeoning with materialism. Poor Indian parents are driven to sell
their children into bonded labor to nearby carpet factories that export
their product to the United States. Little children in a south Indian
fishing village are turning blind for want of vitamin A, as the fish
caught by their parents are transported to satisfy the dietary whims of
faraway consumers. Thai parents would rather gamble with the AIDS virus
than with hunger as they send their little boys and girls off to Bangkok
to satisfy the sexual fancies of tourists.
The complicity of the rich (from the
megastructures of finance and trade to their personal acquisitiveness)
in this violence is less than tenuous. In the main the rich would rather
not lose their appetite, and so they flip the channel on the poor in
their midst. They blame the victims and their "irresponsible" breeding
behaviors with little discussion of their own responsibility in the
tragedy.
My own hope for the future well-being of our
world flags and flails as I see the overwhelming capacity of free-market
capitalism and entrepreneurial Christianity to sway and "save" the
world. I am moved by a diary entry by Min Chong Suk, a South Korean
sewing-machine operator who works from 7 a.m. to 11:30 p.m. in a garment
factory (perhaps she was the seamstress of my blue jeans!). She wrote,
"We all have the same hard life. We are bound together with one string."
Something within me resonates also with David
Jenkins as he writes in an essay on The Power of the Powerless:
"It might be that Christians have to decide how to take sides in light
of the fact that the Christian’s basic alignment is always with and for
the powerless and that it is the power of powerlessness, when taken up
in suffering, absorption, reconciliation and love, which is one
constantly creative and open-ended force at work in the world." Such
truths about our human bondedness and the possibility of God’s presence
are our only guarantees as we pursue our personal and collective
destiny.
IVY GEORGE, a native of Madras, India, is
professor of sociology at Gordon College in Wenham, Massachusetts. |
|
|
3/3
Blue Box
2
Brian Nelson
ingela.alger@bc.edu) (Boston College)
Francois Salanie (
salanie@toulouse.inra.fr) (INRA-LEERNA,
Toulouse)
Additional information is available for the following
registered author(s):
Consumers often have to rely on an expert's diagnosis
to assess their needs. If the expert is also the seller of services, he may use
his informational advantage to induce over-consumption. Empirical evidence
suggests that over-consumption is a pervasive phenomenon in experts markets. We
prove the existence of equilibrium over-consumption in an otherwise purely
competitive model. This market failure results from the freedom of consumers to
turn down an expert's recommendation: experts defraud consumers in order to keep
them uninformed, as this deters them from seeking a better price elsewhere. Our
model also yields predictions on the diagnosis price that are in line with
stylized facts, and provides a theory for why risk-neutral consumers would
demand extended warranties on durables.
To download:
If you experience problems downloading a file, check if you have the
proper application to view it
first. Information about this may be contained in the File-Format links below.
In case of further problems read
the IDEAS help file.
Note that these files are not on the IDEAS site. Please be patient as the files
may be large.
|
17
An Energy
Summary of the United States of America
 |
 |
|
Overall Production and
Consumption |
| Even though the United States is
the world's leading energy producer by a wide margin, it is also the
world's leading energy consumer by an even wider margin. The net result
is that United States is the world's greatest net energy importer,
presently consuming about 1.4 times as much energy as it produces, and
is dependent on outside sources for crude oil and natural gas. The
United States presently accounts for about 17% of the world's total
annual energy production and about 23% of the world's total annual
energy consumption. An historical summary of Total Primary Energy
Production (TPEP) and Consumption (TPEC) for the United States is shown
in Table 1. |
Table 1: The United
States' TPEP and TPEC, 1993-2003
(in Quads) |
| |
1993 |
1994 |
1995 |
1996 |
1997 |
1998 |
1999 |
2000 |
2001 |
2002 |
2003 |
| TPEP |
68.30 |
70.71 |
71.18 |
72.50 |
72.43 |
72.83 |
71.71 |
71.27 |
71.92 |
70.98 |
70.50 |
| TPEC |
87.62 |
89.28 |
91.24 |
94.26 |
94.77 |
95.19 |
96.84 |
98.96 |
96.51 |
98.10 |
98.84 |
|
Petroleum |
| The United States has proved oil reserves
estimated (as of January 2005) at about 21-29 billion barrels. The total
annual crude oil production of the United States ranks it third-greatest
in the world (behind Saudi Arabia and Russia), accounting for about 8%
of the world's annual crude oil production. Total U.S. consumption of
petroleum is by far the world's greatest (accounting for about
one-fourth of the world's annual total), which results in the United
States being the world's greatest oil and oil products importer. Nearly
60% of total U.S. oil and oil products demand is now covered by imports,
with about one-fifth of the imports originating from the Persian Gulf
area. The greatest suppliers of oil and oil products to the United
States are Canada, Saudi Arabia, Mexico, Venezuela, and Nigeria, in that
order. Demand for crude oil in the United States has been slowly but
steadily increasing; annual consumption is now about one-sixth greater
than it was a decade previous. In contrast, domestic production of crude
oil had been steadily dropping and is now at a 50-year low. Increased
production is likely before the end of the decade, however, with more
oil coming from deepwater areas of the Gulf of Mexico and new technology
becoming available to increase production at mature oil fields. An
historical summary of petroleum production and consumption in the United
States is shown in Table 2. |
Table 2: Petroleum Production
and Consumption in the United States, 1993-2003
(in thousands of barrels per day) |
| |
1993 |
1994 |
1995 |
1996 |
1997 |
1998 |
1999 |
2000 |
2001 |
2002 |
2003 |
| Production (total)* |
9,602 |
9,413 |
9,400 |
9,445 |
9,461 |
9,278 |
8,993 |
9,058 |
8,957 |
9,000 |
8,797 |
Production
(Crude Oil only) |
6,847 |
6,662 |
6,560 |
6,465 |
6,452 |
6,252 |
5,881 |
5,822 |
5,801 |
5,746 |
5,681 |
| Consumption |
17,237 |
17,718 |
17,725 |
18,309 |
18,620 |
18,917 |
19,519 |
19,701 |
19,649 |
19,761 |
20,034 |
|
Natural Gas |
| The United States has proved gas reserves
estimated (as of January 2005) at about 192 trillion cubic feet (tcf),
which represents about 3% of the current world total. The United States
is currently the world's second-greatest producer of natural gas, after
Russia, and accounts for about one-fifth of the world's annual natural
gas production. It is also the world's greatest consumer of natural gas,
accounting for nearly one-fourth of the world's total annual natural gas
consumption. About one-fifth of all natural gas consumed is now
imported, and more than 80% of U.S. natural gas imports are from the
western provinces of Canada. Liquefied natural gas (LNG) is presently
imported via terminals located along the Atlantic and Gulf of Mexico
coast, and LNG imports are expected to greatly increase, to more than 6
tcf annually, by the year 2025. Demand for natural gas in the United
States has been slowly increasing over the past decade and is now about
8% greater than it was a decade ago. More than one-third of the natural
gas consumed in the United States is for industrial uses, with about
another one-fourth used for power production and slightly more than
one-fifth for residential use. An historical summary of natural gas
production and consumption in the United States is shown in Table 3.
|
Table 3: Dry Natural Gas
Production and Consumption in the United States, 1993-2003
(in tcf) |
| |
1993 |
1994 |
1995 |
1996 |
1997 |
1998 |
1999 |
2000 |
2001 |
2002 |
2003 |
| Production |
18.10 |
18.82 |
18.60 |
18.85 |
18.90 |
19.02 |
18.83 |
19.18 |
19.62 |
18.93 |
19.04 |
| Consumption |
20.79 |
21.25 |
22.21 |
22.61 |
22.74 |
22.25 |
22.40 |
23.33 |
22.24 |
23.01 |
22.38 |
|
Coal |
| The United States has recoverable coal
reserves estimated (as of January 2005) at more than 270 billion short
tons (or about 27% of the world total), which ranks it first in the
world by far in that regard. The United States is the world's
second-greatest coal producer and consumer (each behind China), and
accounts for about one-fifth of both the world's total annual coal
production and coal consumption. More than half of the coal now mined in
the United States comes from surface mines in the western part of the
country (primarily Wyoming and Montana), while the Appalachian region
accounts for slightly more than one-third of U.S. coal, mainly from
underground mines. More than 90% of all coal consumed in the United
States is used for power generation, with industrial uses (including
steelmaking) accounting for nearly all the remainder. The United States
is also a coal exporter, but international sales of coal have declined
over the past decade, partly due to increased competition from other
coal-producing countries. Demand for coal in the United States has been
steadily increasing over the past decade, with annual coal consumption
about 15% greater than it was a decade earlier. An historical summary of
coal production and consumption in the United States is shown in Table
4. |
Table 4: Coal Production and
Consumption in the United States, 1993-2003
(in millions of short tons) |
| |
1993 |
1994 |
1995 |
1996 |
1997 |
1998 |
1999 |
2000 |
2001 |
2002 |
2003 |
Production
Anthracite
Bituminous
Lignite |
945
4
852
90 |
1,034
5
941
88 |
1,033
5
942
86 |
1,064
5
971
88 |
1,090
5
999
86 |
1,118
5
1,027
86 |
1,100
5
1,008
87 |
1,074
5
983
86 |
1,128
2
1,046
80 |
1,094
1
1,010
82 |
1,070
1
988
81 |
| Consumption |
944 |
951 |
962 |
1,006 |
1,030 |
1,037 |
1,039 |
1,084 |
1,060 |
1,066 |
1,094 |
|
Electricity |
| The United States is both the world's greatest
generator and consumer of electricity, accounting for about one-fourth
of both the world's annual electricity generation and consumption. By
far, the majority of electricity generation in the United States is from
fossil fuels, with coal by itself accounting for more than half of all
generation. Cross-border trade of electricity with both Canada and
Mexico has been on the increase over the past decade. Much of the
electricity consumed in the northeastern part of the United States is
generated from hydroelectric sources in Canada's Québec and Ontario
provinces, while the United States exports electricity to some Canadian
markets. There is also electricity trade between the United States and
Mexico, but inadequate cross-border power transmission infrastructure is
currently a limiting factor. Demand for electricity in the United States
has greatly increased, with electricity consumption now more than 20%
higher than it was a decade ago. An historical summary of electricity
generation and consumption in the United States is shown in Table 5.
|
Table 5: Electricity Generation
and Consumption in the United States, 1993-2003
(in billions of kilowatt-hours) |
| |
1993 |
1994 |
1995 |
1996 |
1997 |
1998 |
1999 |
2000 |
2001 |
2002 |
2003 |
Net Generation
hydroelectric
nuclear
geo/solar/wind/biomass
conventional thermal |
3,201
280
610
80
2,231 |
3,251
260
640
80
2,270 |
3,356
311
673
78
2,294 |
3,447
347
675
79
2,346 |
3,496
356
629
81
2,430 |
3,625
323
674
81
2,547 |
3,701
320
728
83
2,570 |
3,808
276
754
86
2,692 |
3,745
217
769
83
2,677 |
3,867
264
780
93
2,730 |
3,892
276
764
94
2,759 |
| Net Consumption |
3,001 |
3,081 |
3,164 |
3,254 |
3,302 |
3,425 |
3,484 |
3,592 |
3,532 |
3,629 |
3,656 |
| Imports |
31 |
47 |
43 |
43 |
43 |
40 |
43 |
49 |
38 |
36 |
30 |
| Exports |
4 |
2 |
4 |
3 |
9 |
14 |
14 |
15 |
16 |
14 |
24 |
|
The United States currently
accounts for about one-fourth of the world's total installed electricity
generating capacity, ranking first in the world by far in that regard.
Installed electricity capacity in the United States has
been steadily increasing over the past several decades, but most of the
recent additions have been fossil-fueled. Natural gas, in particular,
has been the favored fuel due to relatively low capital costs for
power-generating facilities and lower environmental impact compared to
use of coal. An historical summary of installed electricity-generating
capacity in the United States is shown in Table 6. |
Table 6: Installed Electricity
Generation Capacity in the United States, 1993-2003
(in thousands of megawatts) |
| |
1993 |
1994 |
1995 |
1996 |
1997 |
1998 |
1999 |
2000 |
2001 |
2002 |
2003 |
| Hydroelectric |
77.4 |
78.0 |
78.6 |
76.4 |
79.4 |
79.2 |
79.4 |
79.4 |
79.5 |
79.4 |
79.4 |
| Nuclear |
99.0 |
99.1 |
99.5 |
100.8 |
99.7 |
97.1 |
97.4 |
97.9 |
98.2 |
98.7 |
98.8 |
Geothermal/Solar/
Wind/Biomass |
15.2 |
15.6 |
15.9 |
15.9 |
16.1 |
16.3 |
17.0 |
16.1 |
16.6 |
17.4 |
17.9 |
| Conventional Thermal |
541.8 |
550.0 |
554.2 |
561.7 |
564.1 |
563.9 |
572.6 |
598.9 |
634.9 |
689.5 |
736.7 |
| Total Capacity |
733.4 |
742.8 |
748.1 |
754.8 |
759.3 |
756.3 |
766.4 |
792.2 |
829.2 |
884.9 |
932.8 |
|
Carbon Emissions Information |
| The United States is the greatest
carbon-emitting country in the world and currently is responsible for
about 23% of the world's total fossil fuel-based carbon dioxide (CO2)
emissions. At the 1997 Kyoto conference, the United States agreed to cut
its greenhouse gas emissions to 7% below 1990 levels by the 2008-2012
time frame, but this has yet to be ratified by the U.S. Congress, and
according to U.S. Department of Energy projections, this goal is most
likely unachievable. However, there have been efficiency gains in
generation and use of electricity over the past decade that have reduced
the relative amount of greenhouse gas emissions in the United States on
a per-dollar-of-GDP basis. Additionally, efforts are underway to develop
a prototype power plant of the future ("FutureGen") that would have both
high efficiency and zero emissions of CO2
and airborne pollutants. A network of public-private partnerships has
also been established for determining the most suitable technologies,
regulations and infrastructure needs for CO2
capture and storage in different areas of the United States. An
historical summary of CO2 emissions from
fossil fuel use in the United States is shown in Table 7.
|
Table 7: Fossil Fuel-related CO2
Emissions in the United States, 1993-2003
(in millions of metric tons of CO2) |
| Component |
1993 |
1994 |
1995 |
1996 |
1997 |
1998 |
1999 |
2000 |
2001 |
2002 |
2003 |
| CO2
from coal |
1,847 |
1,858 |
1,877 |
1,959 |
2,003 |
2,016 |
2,020 |
2,115 |
2,047 |
2,064 |
2,100 |
| CO2
from natural gas |
1,141 |
1,164 |
1,216 |
1,238 |
1,243 |
1,212 |
1,215 |
1,261 |
1,211 |
1,252 |
1,203 |
| CO2
from petroleum |
2,170 |
2,213 |
2,195 |
2,279 |
2,297 |
2,349 |
2,417 |
2,438 |
2,475 |
2,456 |
2,498 |
Total CO2
from
all fossil fuels |
5,158 |
5,235 |
5,288 |
5,476 |
5,543 |
5,577 |
5,651 |
5,815 |
5,733 |
5,772 |
5,802 |
|
18
Should we
tax consumption?
PUBLIC INTEREST in changing the tax system is
growing much faster than understanding of the competing proposals.
Democrats and Republicans, liberals and conservatives, all have come up
with their favorite nominees for tax cuts--the poor, middle class,
manufacturers, savers, investors, producers of luxury goods, etc.
It seems desirable, under these circumstances, to
broaden the public debate to go beyond the present inconsistent array of
specific proposals to modify slightly the income tax, which is the heart
of the existing Federal revenue system. It is time to consider the most
basic change in the government's income structure--abandoning the entire
idea of taxing income and shifting to a consumption tax as the primary
Federal revenue source.
Most Popular Articles
in News
Most Popular Publications
in News
Taxing consumption instead of income generates
many consequences, most of them desirable. A constant theme among
reformers is the need for increased incentive for saving, capital
formation, and economic growth. This requires examining the pros and cons
of consumptive taxation and analyzing the major alternative approaches to
structuring a new tax of that type.
The governments of most industrialized nations,
especially in the European Community, use consumption taxes far more than
the U.S. does. While 18% of government revenue comes from taxes on
consumption in the U.S., the comparable figures are 26% for Germany, 29%
for France, and 31% for the United Kingdom.
|
|
19
Consumption For our
first examination of the statistics of peak oil, we look at consumption which is
one of the least controversial aspects. But with demand rising around the world,
it is by no means insubstantial.
The BP Energy Review unhelpfully gives the values in
thousand barrels daily. Converting to gigabarrels per year, this chart shows the
world’s consumption of oil from 1965 to 2005.

It is immediately noticeable that consumption rose
steadily apart from two ‘blips’, in 1974 and 1980. These ‘oil shocks’ were due
to political effects rather than peak oil and have important effects in many
areas. It is important to be aware of what happened then.
The
1970s Oil Shocks
Extract from World Book encyclopedia
OPEC was founded in 1960 by Iran, Iraq, Kuwait, Saudi
Arabia, and Venezuela. At that time, the petroleum industry in these countries
was controlled by United States and European oil companies. These firms paid
the host governments income taxes and royalties based on the posted price the
companies charged for crude oil on the world market. In 1959 and 1960, oil
production greatly exceeded world demand. The surplus that was thereby created
prompted several of the major companies to cut the posted price and thus their
payments to host governments. OPEC was founded in response to this price cut.
OPEC had little influence on oil prices during the 1960s, when production
expanded to keep pace with demand. In the 1970s, however, world demand for oil
began to outgrow what was available from non-OPEC sources. In 1973, OPEC
stopped consulting with oil companies and decided to raise oil prices in
keeping with the rate of inflation.
Armed conflict also contributed to rising oil prices. During the Arab-Israeli
War of 1973, some Arab members of OPEC stopped or reduced oil exports to
countries supporting Israel. As a result, oil prices in those countries,
including the United States and other Western industrial nations, rose
sharply. During the late 1970s, the Iranian revolution caused a shortage that
helped OPEC increase oil prices again.
OPEC was less successful at achieving its goals in the 1980s, when the world
oil supply again exceeded demand. In 1983, OPEC cut the price of its oil for
the first time. During the middle and late 1980s, OPEC set production limits
for its members several times. But many members ignored the limits, thereby
holding prices down. Although brief price increases resulted from Iraq's
invasion of Kuwait in 1990, oil prices remained stable in the early 1990s.
The results of the oil shocks was worldwide
double-figure inflation and a stagnant economy.
The charts below show how the sudden increases in oil
prices in the 70s and 80s were reflected by unemployment, inflation and growth
in the UK.
The results of the oil rises to come will be worse
since there will be no hope of the resumption of cheap oil.
Future
Consumption
The problems of oil consumption in the future revolve
around two factors: population and the increasing use from developing countries.
A chart of the US Census Bureau’s world population shows that population is
expected to increase steadily over the first half of the this century. (What it
doesn’t show is any drop in population that might be caused by oil decline –
from wars, recessions, famine, etc).
More people means more demands for fuel, energy,
plastics and food – all highly dependent on oil. In the ten years from 2002 to
2012, the world population is expected to rise from 6.23 billion to 6.96
billion, an extra 12% to be fed, supplied and energised. Along with population,
the other factor is the increasing use of oil in developing countries –
countries which, up to now, had been contributing little to consumption. Compare
these charts of oil consumption from selected countries and regions.
|

|

|
The first two show the ‘developed’ countries/regions of
USA, Europe, UK and South/Central America. Although the consumption is high (as
far as the USA and Europe is concerned), the trend is either gentle or actually
in reverse (note how the oil shocks of the 70s and 80s are reflected again). The
percentage changes from 1965 to 2005 range from 20% for the UK, to 180% for
South/Central America with Europe and USA sitting between (see Chart C10). This
compares with overall world consumption which grew by 164%.
But when we look at the charts for Pacific Asia and
China, we see a very different view. Chart C8 uses the same scale as Chart C6
and Chart C7, and you can see how the whole of Asia Pacific has already
surpassed the levels of the USA and Europe and at a much steeper curve (a change
since 1965 of 636%. China’s rise seems more gentle because of the scale: if you
isolate China and bring the scale down to fit (Chart C9), the frightening rise
in that country’s oil consumption is clear. The percentage change over the 40
years is a whopping 3118%.
Below (C10) is a chart of those percentage changes and
it shows the dramatic difference between the developed and the developing world.
The clear omen from this is that oil consumption in
Asia is going to increase dramatically in the next few decades and this will
outweigh any decrease from Europe and the US. The population of China, even with
birth control measures, is still expected to rise. This is the trend. In
reality, consumption will slow and decline as oil production decreases and
recessions bite, but the exact figures for that are impossible to calculate.
What is clear is that, if the world continues as it presently is doing,
oil consumption will continue to rise. |
20
Grandfather Economic
Report series
Home & Contents |
Summary |
Feedback |
What's New
- First - - a repeat of the quick
Start Summary Page, and then the Proof and Pictures -
ENERGY CHALLENGE,
MORE THAN EVER - -
The world oil market daily produces and consumes 76
million barrels.
The United States, with 5% of the world's
population, daily consumes 20.7 million barrels (869 million gallons) - - or
25% of world consumption. U.S. consumption is at a record high - -
while U.S. oil production is at a 50-year low and
declining, covering just 25% of our consumption needs - - a 75% gap, and
reserves are declining,
Causing rising imports from other nations - a
record high - - while reserves of prime import sources decline.
Additionally, U.S. natural gas reserves are falling and imports rising.
The U.S. is more vulnerable than
ever before.
Not a nice bequest to our young generation.
- 7 color
pictures tell the story, because a picture is worth a thousand words -
A THREAT
"Our society and civilization are built upon the
availability of cheap oil for transportation, for food production, for
warmth, for trade and commerce. Approaching must be one of the biggest
events in history: the end of cheap, readily available oil. Yet, with the
exception of a few responsible oil geologists and scientists, almost no one
is talking about this impending catastrophe." Marner, 11/00 (link
# 11 below)
U.S. Energy Secretary Spencer Abraham said, "The
country is facing the most serious energy shortages since the 1970s. Without
a solution the energy crisis will threaten prosperity and national security
and change the way Americans live." 3/19/01 (link # 4 below)
This is the USA Page of the Energy Report Home Page
- -
Quick Links internal to this USA page > > Summary USA
- - Production Oil - - Production
Natural Gas - - Reserves - -
Production Model - Hubbert - -
Production Projected via Discovery - -
Imports Oil - - Inventory Oil
- - Import Deficit all Goods - USA - -
Energy Inefficiency - -
electricity: coal vs. nuclear - - coal production -
- Author Comment - the challenge
Page 2 -
World page
for trends of reserves, production;
Page 3 for
conclusions/actions, related articles;
Table of Contents
all sections this Energy Report, incl. link list, about authors; and
Energy Report Home
Page
Let's
first repeat the USA summary chart - - then 7 pictures for the story
U.S. PETROLEUM OIL
CONSUMPTION - PRODUCTION - IMPORTS
CONSUMPTION - (upper black line) - - UP, UP AND
AWAY - - to a record HIGH.
U.S. PRODUCTION - (red line)
- DOWN, DOWN - - back to the level of a half-century ago (1950) when there
were 144 million fewer people.
IMPORTS FROM ABROAD - (blue
line) - UP, UP AND AWAY - - to a record high of 4.5 billion barrels
(averaging 12.4 million barrels per day)
This chart shows U.S. oil consumption (black line)
a new record of 7.6 billion barrels per annum (equivalent to an average of
21 million barrels per day).
This chart also shows
production (red line) below 2 billion barrels per year, or about 5.2
million barrels per day - - lower than 50 years ago and 44% below 1971 - -
covering only 25% of our consumption needs.
The difference between production and consumption
is a 75% deficit gap of 5.7 billion barrels per year (15.5 million barrels
per day) - - which must be provided by rising imports
(blue line) and by drawing down crude oil inventory levels to record
lows that trend down. The chart also shows in the past higher prices
dramatically reduced consumption (and therefore cut imports), but higher
prices did not raise internal production - - reasons covered later.
(inventory trends, not shown on chart, covered later).
Look at the chart's black consumption line in the
late 1970s and early 1980s. Note the consumption decline, which was caused
by higher consumer prices resulting when OPEC significantly reduced
production levels. This proves lower consumption, by consumer self-imposed
conservation, ONLY results from higher prices. But higher prices did NOT
raise U.S. production, which is indicative of internal constraints such as
inability to rapidly respond to overseas challenges, declining reserves and
regulatory pressure.
It also indicates the influence power of OPEC looking forward may become
significantly greater than in the past, as we will show later. But, we
believe OPEC's Middle East nations should not be cast as 'villains' - - it's
their oil and consumers must pay for their own insatiable and unsustainable
appetites as discussed in comments below. Chart by M.
Hodges, data by Jean Laherrčre and http://www.economagic.com/em-cgi/data.exe/doeme/
(also see the larger,
more comprehensive chart by Jean, then click your back button.)
ANOTHER
LOOK AT U.S. OIL PRODUCTION - -
As in the prior chart, the upper
red line is U.S. oil production. While U.S. oil
discovery peaked in the 1930s, the red line shows production peaked in 1971
and today's production is 44% lower - yet U.S. population increased 144
million.
This Oil Production red line is broken down in the
chart into 2 components:
a. Production in the lower 48 states (blue line)
- - trend down - - 53% less than 1971
b. Production in Alaska (pink line) - - trend
down. - - 51% less since 1988
Total Oil Production is also broken down into 2
additional components:
1. On-shore Production (brown line) - - trend
down - 51% below 1971
2. Off-shore Production (light green line) - -
oscillating trend since 1971
Not shown on the chart are other data showing the
declining trend in output per oil well (called oil well productivity) - -
down 39% since early 1970s. (This is close to 10 barrels per day (b/d) which
is in fact the upper limit of productivity of a stripper wells; it means the
majority of US producing wells are stripper wells producing less than
10b/d/w). This could mean that most of the larger more productive wells in
the past were pumped out first, leaving smaller, less productive wells to
service future production needs.
Oil discovery peaked in the U.S. during the 1930's,
and the chart's red line shows production peaked 40 years later in 1971.
As we will show in a later graphic, for the world
as a whole discovery peaked in the 1960's while production peaked outside
the Middle East in 1997. Middle East production is expected to peak by 2005
before production begins to decline.
Chart by M. Hodges, data provided by Jean Laherrčre
U.S. PRODUCTION - - Natural Gas - -
Consumption vs. Production
CONSUMPTION
(upper black line) - - trend up - faster than PRODUCTION (red
line).
Production is less than 35 years ago, and the trend
has flattened despite a doubling of new gas wells in the 1990s (now falling
in quantity).
The U.S. is fed more and more by increased imports
(green line) - mostly from Canada, which is
depleting its easy-to-produce sources. Therefore- - natural gas consumption
is above production, causing more imports - - Just like oil!!! Chart by M.
Hodges, data provided by Jean Laherrčre
Additionally, like oil, price has a dramatic impact
on natural gas consumption - - more so than anything else - - as seen by the
declining consumption and production curves on this chart from mid-1970s to
mid-1980s.
"It is obvious that US and Canada's (Mexico being a
gas importer) natural gas production will not be able to meet the forecasted
demand for 2010.
- "My belief is that the demand will be less than
anticipated because of the increase in price, and the fact LNG can be
brought easily as there is plenty gas in the rest of the world (in
particular 100 Tcf in the NW shelf of Australia as my friend Dick Cooper
from Perth wrote me a few days ago)." This quote (4/2/01) and the natural
gas chart data provided by Jean Laherrčre. (Dr. Colin
Campbell, who reviewed and praised this Energy Report, said, "I doubt
if Canada is going to export gas when it needs it itself. This is likely
to undermine NAFTA).
- Dr. Colin Campbell said gas production is better
described as a "plateau" followed by a "cliff" due to the high mobility
and recovery of gas. Under declining pressure, oil declines slowly as it
moves through the porespace of the rocks, but the decline of gas is a
cliff -- not a slope. The gas market gives no warning of the cliff because
it is no more expensive to produce the last cubic foot than the first.
North American production is at or near (< 10 years) its "cliff" now:
North American natural gas has no excess capacity. It disappeared several
years ago. What we do have is extremely aggressive decline rates in almost
every key production basin making it harder each season to keep current
production flat.
- "The gas market is regional not global like oil
because of transport costs. 1) N. American market now heavily depleted, 2)
Russia increasingly to supply Europe and Asia, but at geopolitical cost,
3) N. Africa/M. East/ Caspian when (if) new pipelines built.
- Canada currently makes up about 13% of the USA
gas supply. Canada is running out of gas too. The Alberta Energy and
Utility Board (EUB), in its supply outlook for 2001 to 2010, 'predicted
that conventional natural gas production in Alberta, Canada's key
producer, would peak by 2003 at 5.3 tcf and therefore decline by 2% a year
for the next five years' (link #29).
- AND, Mexican gas production reached a plateau in
1998 and has had a downward slope ever since. Mexican exports to the U.S.
plunged to near zero in 2000. Mexican domestic demand for gas no longer
allows for exports.
- Unlike oil, natural gas cannot easily be shipped
by sea. It must be liquefied prior to shipment, and then shipped in
specially designed refrigerated ships destined for specially equipped
ports, and then re-gasified for distribution -- at an estimated 15 to 30
percent energy loss. Moreover, natural gas cannot be easily stored like
oil or coal
- It has been reported (J. Hanson
link #22) it is not practical to make up the North American shortfall
in gas by shipping it in from the Middle East (shortage of LNG facilities,
tankers, and energy loss). However, the construction of a new gas line to
Alaska and the Canadian arctic where there probably are large untapped
deposits could temporarily mitigate the North American gas cliff.
- With falling reserves most local actions are but
temporary regarding the future.
BOTTOM LINE
From where does America get natural gas in the future?
Possible answer: first from the Arctic and then from the Middle East,
but lots of LNG facilities and tankers will be needed - - soon!
- - and, its price & security may not be cheap.
AND - - U.S. natural gas independence, longer term, is history !!
RESERVES in the
U.S.A. - - Oil & Natural Gas
OIL
RESERVES - - DECLINING (green line) - down
about 42% in 30 years to about 20 billion barrels, while the population
increased 70 million.
NATURAL GAS RESERVES - - DECLINING (red
line) - - down 36%. to about 30 x 6 = 180 trillion cubic feet. (note
the red curve for natural gas is in Tcf divided by 6 so it would fit on the
chart with oil.. Tcf = trillion cubic feet)
- A dismal picture looking forward.
- Comparing Oil reserve remaining of about 20
billion barrels per this chart to the 2nd chart above showing Oil
Production at 2 billion barrels per year - - indicates if it were
economically and technically feasible for the US to pump every drop from
every known U.S. oil location it would run out of domestic oil in about 10
years at current production and import rates. If the U.S. stopped imports
and pumped every location all would be depleted in 4 years at today's
consumption rate. (Canada's reserves would be depleted in 7 years at its
production rate - - Mexico's a bit longer - - depending on how much Canada
and Mexico export to fuel voracious U.S. import appetites).
Comparing Natural Gas reserves remaining of about
(30 x 6 = 180 Tcf) shown on the chart with the chart above showing 20 Tcf
production per year indicates that if one could get at every single cubic
foot US natural gas reserves would be depleted in 9 years.
- Regarding natural gas reserves - - a question -
-
Since history shows higher consumer prices are the No. 1 way to reduced
energy consumption, which should slow down depletion of USA reserves as
well as import-reliance, would not higher prices spur increased U.S.
production resulting in even faster natural gas reserve depletion thereby
further deepening future U.S. import dependence on others? A catch-22??
- It is most vital that clean, technically-proven
data be used by the U.S. in accessing reserves in the U.S. and elsewhere.
- Regarding the reporting of reserves by any
nation (such as Mexico and Venezuela), one must try hard to separate true
facts from 'political data' (see link # 21).
- Some have suggested that in the past data for
some nations have been inflated for political reasons - - such as trying
to justify IMF loans, special trade privileges, or other
politically-oriented objectives.
- Sticking to long-term data widely accepted by
experts should reveal potential political adjustments if ,over a very
short period, all of a sudden a huge jump is reported unsupported by
provable new discovery.
- For example, past jumps in reported Mexican and
Venezuelan reserves now show said reserves (about 30 billion barrels each)
are experiencing long-term declining trends, not increases, as less
political data in used.
Chart data provided by Jean Laherrčre. In the chart the term API =
American Petroleum Institute, AGA = American Gas Association, and EIA = US
Department of Energy/ Energy Information Administration
OIL
PRODUCTION MODELS - - USA - actual past production and projections
This chart shows the model by the most recognized
expert (Dr. M. King Hubbert) regarding predicting oil discovery, depletion
and production looking forward into the future.
This model shows Oil Production - - for the LOWER
48 STATES - - ACTUAL PAST HISTORY data (green squares),
AND PROJECTED future data (green curve for
Hubbert curve and dark green curve for the Gauss or " normal " curve), and
for ALASKA (blue line).
Note declining production actual production for
both lines up to the year 2000 - - and declining projections beyond.
And, note the original prediction of Dr. Hubbert for the lower 48 states,
which is the black dotted line just under the green.
Also note actual data departs from the model when a
drastic political or economical event occurs (depression, high oil price,
etc.), but quickly data return towards the curve.
Although we are primarily interested in USA data,
the chart also includes a red FSU line for the
Former Soviet Union.
It's interesting to note the accuracy of Dr.
Hubbert's modeling approach when applied also for the Soviet Union, since
actual FSU production has and is following amazingly close to his model
predictions (which are the underlying red X's).
Dr.Hubbert's prediction in 1956 that U.S. oil
production would peak in about 1970 and decline thereafter was scoffed at
then but his analysis has since proved to be remarkably accurate. Note: The
late Dr. Hubbert, American geophysicist working at the Shell Oil research
laboratory in Houston, developed sophisticated models regarding world oil
discovery, depletion and production - - this analyses is an amazing
technical achievement.
His well-renown models, which were originally
developed for U.S. and World oil as a single cycle, are widely accepted by
nearly all serious technical experts in the world - - and can be applied
with several cycles to all regions which are producing at full capacity.
Countries of the Persian Gulf not producing to full capacity (swing
producers) cannot be modeled with such a curve since actual production is
not led by geology and physics, but by politics. Above Chart provided by
Jean Laherrčre
ONE MORE MODEL TO FURTHER CONVINCE
YOU OF CONTINUED U.S. OIL PRODUCTION DECLINE
The following graphic is most
important.
The black (up and down) lines are data of actual oil discovery, with 30-year
forward shift (discussed below) - - using all currently known discovery
data.The key curve here is the trend line of
that data, which represents projected production each
year (green trend curve)
calculated by past discovery data
Note
that the bell-shape of the curve predicting oil
production is most similar to the above Hubbert curve - - with its
production peak in 1970 - - and declining thereafter.
This confirms the thrust of the Hubbert model
above, while using the latest available information for actual discovery and
actual production.
Also shown on the graphic is a data curve for
actual oil production (red curve), which you
will note has closely followed the green prediction curve - -and data for
the portion of actual crude oil only (blue line).
Note regarding this chart: Dr. King Hubbert rightly
said that before producing oil you must find (discover) it and the
production pattern follows the discovery pattern. Instead of using
mathematical modeling (such as starting with a bell-shaped curve) it is
better to use the shift between the discovery curve and the production
curve. All that is necessary is to have a real discovery curve (from proved
+ probable data values at the time of discovery or at start of production)
and to fit discovery data plots to the production data plots by moving along
the time scale up to the best fit. In the case of the lower 48 states the
best fit is about 30 years, and the result is the above chart.
Chart data submitted by Jean Laherrčre, graphic by Michael Hodges.
THE EVIDENCE FOR CONTINUED DECLINE IN U.S. OIL PRODUCTION IS CONVINCING
-
- DANGEROUSLY leading to increasing dependence on imports from other nations
IMPORTS - OIL - - into USA
U.S. OIL IMPORT PERCENTAGE TREND -
up, up and away.
Each
day the world oil market consumes 76 million barrels. The United States
consumes 20 million barrels per day" (Link # 7) -
- yet U.S. production and reserves are declining,
as consumption climbs, as seen above. Huge, rising import ratios make up the
difference.
The left chart (DOE 1998 report) shows the rising
import ratio - - with a projection forward that understates actual fact as
known today.
The first chart on this page shows the U.S. now has
a consumption vs. production gap of 74% (in 2004)- - the highest ever - -
and well above DOE's 1998 projection here.
In 2005 the U.S. imported approximately 4.5 billion
barrels (averaging 12.3 million barrels per day). Considering
all forms of oil, in 2005 the U.S. imported more oil than the next 4 nations
combined (Japan, China, Germany, S. Korea). Note also the U.S. imported 52%
more oil than all Saudi Arabia exports. (data
graphic)
The top six sources of U.S. oil imports,
Canada, Mexico, Saudi Arabia, Venezuela, Nigeria and Iraq account for 65.1
percent of all foreign crude reaching our shores and 38.9 percent of total
domestic consumption. Of these, four, Saudi Arabia, Venezuela, Nigeria and
Iraq provide 38.2 percent of oil imports and 22.6 percent of total
consumption. For a variety of reasons, none of the four can be considered a
reliable source of supply.
As US oil production declined, America has been
depending more on Canada (18% of US imports) and Mexico (14% of imports) -
- which, on the surface, might appear encouraging from a national security
standpoint.
Canada #1 supplier > Canada's oil
exports to the U.S. averaged 2.12 million barrels a day in 2004, or 10.3
percent of daily U.S. consumption, compared with 1.64 million barrels from
Mexico and 1.56 million barrels from Saudi Arabia, according to the U.S.
Energy Information Administration. http://www.bloomberg.com/apps/news?pid=10000082&sid=asxAzV.tqzR0&refer=canada
But, technical data (as separate from political
data) shows reserves for Canada and Mexico are declining - - with Canada's
reported reserves (now about 5 billion barrels) down 40% since mid-1970s - -
and this data according to Jean Laherrčre, "For me, American reports on
Canada (as for the rest of the world) are political (or rather for Canada
financial to follow the SEC rules) proved data quite different from
technical " mean " (proven plus probable) data."
And Mexico's corrected reserves (now about 28
billion barrels) are down 26% since 1980. (for natural gas, as reported
above, their gas exports to the U.S. in 2000 dropped near zero). However,
as the graphic shows, excluding Canada and Mexico the U.S. is experiencing a
growing import-dependence outside North America.
This graphic is from the
Dept. of Energy. And the chart appears to show less reliance on the
Persian Gulf than is really the case, as covered below.
Whereas the US imports over half of its needed oil,
industrialized countries such as Japan and Germany have import dependency
levels of 90-100 percent.'(DOE basics - Link #16).
Therefore, they represent major competitors to US
imports - - and the squeeze is on.
INVENTORY - OIL
U.S. Crude Oil Inventories -
- - at record low and trending down - - a sign of
vulnerability
The
following chart shows crude oil inventory levels 1982 to 2004 (excluding
stocks in the strategic petroleum reserve) - plunging to record
low levels - - during a period when the U.S. population
increased by 60 million and SUVs became popular as U.S. oil production fell.
Oil inventories are like a family's savings
account - - when you consume it you have less buffer to meet the
future. That's what is happening with oil. Declining oil inventories are a
sign of weakness especially when you depend on imports This leads to more
potential price and supply volatility in the market, and more
vulnerability-dependence to foreign suppliers of imports.
Political dangers > We recall
Winter 2000, during the peak of a presidential election, the federal
government dipped into its minuscule strategic oil inventory reserves SPR)
for consumer heating oil - - a desperate and dangerous act undertaken for
obvious political purposes - - sending false signals to consumers that
government has the capacity to 'bail them out' - and a dangerous false
signal implying the SPR contains enough oil to solve all US oil shortages
and price increases Such also is a national security threat. (chart
link #26). Thankfully, this 'dangerous game' was not
played again in the 2004 election season.
Considering U.S. declining production of oil due to
depletion of reserves, and increased reliance on foreign imports, it is
clear the U.S. private sector needs to carry higher (not lower) crude
inventories - - and consumer prices should reflect that need. (local utility
regulators may not be doing the real job they need to do, which is to help
assure supply-demand balances). Over-zealously hampering free market
capacity to react threatens all). Its one thing to consider a national
energy policy regarding crude oil sources but one thing can be done for sure
- - have a national oil inventory policy, in addition to the strategic
reserve which should be held for national security needs.
Risk and cost transfer to government
> It appears in more recent years the private energy (oil) sector has
been fostering off more and more of its own prior inventory responsibility
and cost to the federal government and individual tax payers, thereby
creating soaring, record private sector oil firm profits as the government
books record deficits. Just another example of corporations more
and more transferring their costs/risks to government, such as
banks transfering nearly all mortgage risks to government sponsored
enterprises (Fannie Mae) and insurance companies transfering their costs of
coastal flooding and wind storms to federal (FEMA) and state governments.
NOW TO A BIG PICTURE - -
AMERICA CANNOT AFFORD SOARING OIL IMPORTS - - AT LEAST NOT FOR LONG.
Let's pause a moment - - and place the U.S.
import challenge in a higher level perspective, than oil alone.
The next two graphics are from the
Grandfather International Trade Report.
Like many scary trend pictures in that
report, this one shows exploding trade deficits of ALL goods - -
to another all-time record.
That trade report graphically proves that the
sum of all merchandise imports plus all exports now represents
approximately 23% of the entire nation's economy, as measured by
national income - -
- - where U.S. imports represent 15% of the
economy and are soaring - - while exports, at less than 8% of the
economy, stagnated in the past 20+ years.
America, already the world's largest
international debtor, explodes trade deficits to a new record of $836
billion in 2006. |
This chart shows the exploding $6.1 trillion
cumulative deficit in America's 'Current Account' with the rest of the
world, representing the net of trade in goods and services, as well as
investment flows. This chart captures it all.
A very, very scary picture - - the size and
the trend.
This imbalance has been driven by record-high
ratios of
domestic debt creation by the household, business and financial
sectors - - and a shrinking manufacturing base (including declining
oil production). America's economy is more debt-dependent than ever
before. Let's also recognize that services and technology sectors need
more, not less energy - - and data shows their demand for energy
exceeds that released by declining manufacturing. Shopping malls,
healthcare, airlines, SUV vans, computers and the internet do not run
on air - - and America's population is growing..
Most astute economists and the new National
Trade Deficit Commission confirm this trade imbalance is dangerous and
cannot be sustained. It must be firmly stated that the USA's massive
record trade deficits for all goods must be brought into balance - -
or this may threaten the
international buying power of the U.S. dollar to pay for its
accelerating need for foreign energy imports.
With that bigger picture in mind, let's now
get back to our subject - - ENERGY |
America has become less energy
efficient -
According to the May 2001 Bush energy council
report - - between 1991-2000 America consumed 17% more energy (sum all
types) yet domestic production increased only 2.3% - - mostly due to rising
coal and nuclear production partly offsetting declining oil production - -
and in the next 20 years consumption is expected to increase another 32%.
Let's look at recent energy consumption efficiency: Here's some population
data: In the 1980s population increased 9.8 %, or 22.4 million (a 10-year
increase from 227,726,000 in 1980 to 250,132,000 in 1990). In the 1990s
population increased a faster 12.9%, or 32.3 million (a 10-year increase to
282,434,000).
Taken together, these statistics show in the 1990s
America consumed more energy per capita than before > 12.9% faster
population growth consumed 17% faster energy growth - -
- - This means the nation was less energy efficient
during the last 10 years than the prior decade - - despite so-called greater
auto fuel efficiency, a declining manufacturing base and importing more
goods than ever before which were produced by energy in other nations - -
also bringing into question America's exploding illegal immigrant situation.
One could make the argument that as the US becomes
more and more a service (non-manufacturing) economy, and imports more and
more consumer and other goods, it is becoming less energy efficient, instead
of more efficient - - indicating expanding inefficiency.
ELECTRICITY
GENERATION
Coal and nuclear provide USA electric self-sufficiency
Although graphics above show America has lost its
independence regarding oil (transportation-related and food production uses)
and natural gas, this chart shows America is 76% self-sufficient regarding
electricity generation from coal, nuclear and hydra power fuels produced on
its own lands.
Coal (black line) is the prime generator of
electricity covering 50% of total electricity needs (up from a
44% share in 1975) - and nuclear
(red line) is No. 2, at 19% (up from 9% share in 1975) - -
together generating 69% of America's electricity
(compared to 53% in 1975). Both have increased their share as the chart
shows.
Natural gas (light blue line) slightly increased
its share to 19% of total generation from 16%. Hydro power generates 11%
less than 30 years ago, with its share down to 7% from 16% in 1975.
Petroleoum generated 61% less electicity than 30 years ago, bringing its
share (blue) to 3% from
16%. (not shown are negligible contributions from wind, solar and
photo-voltaic).
Nuclear has been out of 'popular favor' since the
Three Mile Island accident in 1979, although lucky for America that this
chart shows its increase from 9% of electricity generation 30 years ago to a
19% electricity share today. Perhaps this 'shackle of the past' should be
taken off, due to nuclear production and safety records in recent years and
since it represents domestic-based production for electricity free of
foreign dependence.
Despite no new nuclear plants built in the United
States in the last two decades with none on the drawing board (due to
anti-nuclear protest and waste disposal pressures),
nuclear generated electric power production has increased steadily 1973
to the 1990s due to increased efficiencies, but its growth rate is slowing
without new facility additions. Today there are about 103 operating nuclear
power plants in America.
Considering the huge energy supply challenge facing
America for oil and natural gas, nuclear should be reconsidered for
prioritized expanded service for electricity generation, cooking, hot water
and heating - - to reduce pressure on declining and threatened oil and
natural gas reserves (which depend more and more on foreign supply) - -
using a hard-nosed, non-political approach only based on hard technical and
national security data. De-regulating ALL consumer prices for declining
reserve and import-dependent oil and natural gas should make new
home-produced nuclear and clean coal facilities more interesting to private
investors.
Other nations: It is reported
France produces 80% of its electricity from nuclear power (it has nil coal)
and is an exporter of electricity, while Germany generates 33% of its
electricity from nuclear (although Germany is under activist
environmentalist-political pressure to shut all down). Switzerland's nuclear
power plants produce 38% of national electricity generation in 2006.
Therefore, the US nuclear/electricity
ratio of just 19% nuclear is low in comparison to others, and maybe should
take on more of today's 19% natural gas share of electricity generation - -
especially imported gas.
(Uranium reserves: Canada
has the largest reserves and is the major world producer; 38 percent of the
world's accessible uranium reserves are in Australia; Russia at 15%).
This leads us to look at coal production in the
next chart, and coal reserves - - a very important fuel.
COAL - - USA's prime generator of
electricity
upward production and hundreds of years of reserves for self-sufficiency.
Coal,
it is said, is less energy-efficient than oil & natural gas, but the USA has
plenty of coal.
Coal supplies 50% of electricity generated as shown in the chart above - up
from 44% share in 1975.
Whereas Saudi Arabia has more than 20 percent of
the world's oil reserves, the United States has more than 25 percent of the
world's recoverable coal reserves - approximately 270 billion tons. Russia
comes in a distant second with 176 billion tons; China has 126 billion tons,
and Europe has a paltry 36 billion tons.
The Coal chart at left shows - Production trend is
up for all uses of coal - - 2005 was 71% over 1975 (compared to 37%
population increase)..
USA produces 28% of world coal production and consumes 26% of world
consumption
USA has 25% of world's coal reserves, equal to 249 years (BP data) at
current production rates (double the reserves of Europe which has declining
production, and about same reserve size as former soviet union) (data
source: http://www.bp.com/centres/energy/world_stat_rev).
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