In order for us to begin thinking differently about Peak Oil and its implications, and to begin envisioning what kinds of changes we can make (and will likely have no choice about), we should first understand our oil situation and consumption. This post is an introduction.

If the Peak Oil proponents are correct, we are in for a rude awakening in the near or immediate future (as measured against our ability to transition effortlessly to new energy sources).  Many of us won’t understand why. I’d like to help.

At first glance, addressing the potential fuel/oil replacement problems will appear to be quite daunting. A second glance will suggest that we have incredible opportunities to effect changes that could carry us for decades to come into a safer, cleaner, prosperous future.

At the risk of excess hyperbole, we may very well be at the dawn of a potentially new industrial and economic revolution, if we all understand what’s involved and what’s at stake….I won’t even pretend that this will be easy. It won’t be. But we own the choices. We can prepare, or we can ignore and keep our fingers and toes crossed that some way and some how, we’re going to find the tens of millions of barrels of oil everyone is going to need each and every day, and that we will continue to find those same/increasing amounts … well, forever. I’m an optimist, but not that much.

For those of us more familiar with peak oil statistics, this is a popular one: The United States represents approximately 4% of the world’s population, yet it consumes more than a quarter of the world’s oil each year. (By way of comparison, Europe’s population is nearly 50% greater than ours, yet it uses less than half of the oil we do.)

We own more than a quarter of a billion 2-axle vehicles, and have approximately 200 million drivers. For those of us near large cities, most days it seems as though all 200 million drivers are parked on the same highways as we are.

Two-thirds of the nearly seven billion barrels of oil we use each year is used by those same quarter of a billion cars, trucks, and vans. That’s more than any other nation’s total usage! Almost 90% of America’s workforce uses those cars and trucks to get to work. Our gas mileage standards are remarkably poor for a nation such as ours, and so we waste a tremendous amount of oil and gas. (One estimate suggests that lost productivity and wasted fuel caused by traffic congestion in the U.S. costs us more than $80 billion per year. And German auto mileage standards, for example, are nearly twice as high as ours.) This is not good math.

Another estimate suggests that the 20 million or so barrels of oil we use each day translates into 10,000 barrels of oil per second!  (I won’t do the math to verify it, but feel free to do so on your own.)

About 60% of our oil is now imported, to the tune of hundreds of billions of dollars each year. Those numbers will only increase as time passes. Fifteen years from now, it’s expected that we’ll be importing close to 75% of the oil we need. Some suggest the amount will be much higher. Other nations (notably China and India) are increasing their oil consumption exponentially. At some point limited supply will crash headfirst into increasing worldwide demand as more and more nations seek to improve their standards and emulate our way of life. What happens then?

Our military alone uses close to half a million barrels of oil each and every day. Its entire infrastructure has been built on the foundation of readily-available oil. Limit oil’s availability or supply and what happens to our military operations, our national and international commitments, and the protection of oil transport from the Middle East?

Fortunately, we’re already seeing signs that the military leadership understands this. The rest of us ought to start doing so as well. As I try to emphasize, this is either a disaster in the making or an incredible opportunity. I am an optimist on that score.

We’re sending hundreds of billions of our dollars to Saudi Arabia, Russia, Venezuela, and many other nations each year—dollars we no doubt could find good use for here in the United States. We do so in part because our oil peaked in production about 40 years ago. (Even Prudhoe Bay in Alaska, our largest oil field, is now at about one-fifth of its peak production.) We are still finding oil, as the there’s-more-than-enough-oil optimists like to point out in their snarky criticisms of peak oil proponents. We’re just not finding enough, and that hasn’t changed for decades. We’re using more and finding less, and third-grade arithmetic will tell you that that is not a good outcome.

For all the talk of  the “massive” amounts of oil offshore and in Alaska and the “obvious” need for us to just “drill, baby, drill”, we’re several decades away from full production in those regions, and the amounts anticipated will wind up meeting far less than even 5% of our needs. None of it will come cheaply. Drilling in the Arctic is a wee bit more challenging than punching a hole in the ground in Texas, and one does not require an engineering degree to understand that. The “drill, baby, drill” crowd never gets around to spelling any of that out for us. Magical thinking is nice, as is a denial of pesky truths, but on the planet we occupy, it’s a fairly useless exercise.

Data from the Energy Information Agency as of 2007 indicates that our “proven” reserves of conventional oil are about 21 billion barrels. That’s about a 3 year supply for us. More bad math.

One-third of those reserves are “light sweet crude,” which is considered the easy, good stuff. The rest is the not-so-easy and not-so-good stuff … the kind of oil that isn’t produced or refined very efficiently, or inexpensively. Few of our refineries can convert that heavy crude oil into gasoline. None of this is good news.

Opportunity….

There just aren’t any more places on this planet where we can find bottomless pools of oil flowing freely, easily, and inexpensively. That’s certainly true here in the U.S. We’re tapped out. It’s starting to take a lot more effort, many more years, and a lot more money to find and produce what was once so readily available. We’re paying for that, too. Even more bad math.

Cantarell in Mexico has long been considered of the supergiant oil fields on the planet. As recently as 2004 it was producing about 2.5 million barrels a day of oil, and about half of that was shipped here. Production has fallen off a cliff since then, and in 2 – 3 years, it’s expected that production will have declined by close to 80%. Aside from the enormous financial, political, and social problems that will create for our neighbor south of the border (Cantarell was the major source of income to the Mexican government), this also poses a dilemma for us. Where and how do we make up that shortfall?

None of these statistics are especially pleasant to consider. Potential bad news rarely is. But if we understand our situation, if we understand our needs, if we understand that we must individually and collectively begin making better choices and devoting our incredible talents to creating and implementing new means of energy production while revising and improving how we use energy, the bumps in the road we’re destined to confront might be a bit smoother. And in these times, that may not be such a bad option.

Next: More Considerations About American Oil Consumption