Americas Dependence on Foriegn Oil

America spends more than $200,000 per minute on foreign oil, and $13 million per hour. Of the $54 billion trade deficit reported in August, more than a fifth or $12 billion is from imported crude oil. Federal Reserve Chairman Alan Greenspan has called the higher value of imported oil a tax on U.S. citizens that has cost us three quarters of a percent of our economic output in 2004. The NRDC analysis considers oil demand and supply projections and how our current policy of oil dependence effects our economy and security.

Other countries will increasingly compete with the U.S. for the oil available to export. Consumption by industrializing nations will double over the next 25 years, from 15 to 32 million barrels a day. To meet projected world demand of 118 million barrels a day in 2025, global oil output would have to expand by more than 50 percent, 40 million barrels per day between 2002 and 2025.

With stubbornly high prices, the U.S. economy is feeling the drag of dependence. In the first nine months of 2004, the U.S. exported $72.5 billion for oil. Every day the U.S. pays out $390 million for foreign oil, with half of every dollar going to OPEC and a quarter to the Persian Gulf. While some of those dollars could make their way back into the U.S. economy, recent trends suggest that those paid out to OPEC will not be reinvested here. And OPEC countries are profiting handsomely from surging oil prices; in fact, they are expected to pocket $300 billion by the end of the year.

Arab OPEC states supply the United States with 2.5 million barrels per day, 25 percent of our daily imports. Unless things change the future holds more of the same. The Middle East countries hold two thirds of the world's proven oil reserves. By 2025, the Middle East is expected to supply 36 percent of the world's oil, with OPEC as a whole producing 46 percent.