Thursday, February 16, 2006

How dependent is the U.S. on Persian Gulf oil? Not so much

On The Daily Show the other night, Jon Stewart's guest was Peter Tertzakian, author of a recently published book entitled, A Thousand Barrels a Second. Obviously, the topic of oil and gas is a somewhat timely one given the events of the last few years, including war in the Middle East, hurricanes hitting the U.S. and gasoline price spikes around the world.

Tertzakian is a Canadian and an expert on the oil and gas industry, having worked eight years for Chevron Corporation and then going on to success as an energy industry investment analyst. Currently, he is Chief Energy Economist and Director of ARC Financial Corporation, one of the world's leading private equity firms focused on energy.

In short, he knows his stuff.

But what really caught my attention was when Stewart asked Tertzakian: From which country does the United States acquire the largest percentage of its imported oil? And Stewart acknowledged - as I think most of us would - that the answer shocked him.

The country?




As Stewart said, he assumed the answer would be Saudi Arabia or, perhaps, Iran or Iraq. Nope. And I would venture to guess that well over 90% of the U.S. population, when asked that same question, would assume the answer would be a country in the Persian Gulf. Again, nope.

It seems that, whenever the discussion turns to oil and gas, most everyone assumes that our dependency on foreign oil - our addiction, if you will - is tied directly to the Middle East and the murder and mayhem constantly taking place there. But as we learned from the recent discussion between Stewart and Tertzakian, that assumption is completely false.

My interest sufficiently piqued, I decided to do a little follow-up research on the web. After uncovering some official import statistics from the Department of Energy's Energy Information Administration web site, I found what I was looking for:

Crude Oil Imports (Top 15 Countries)
(Thousand Barrels per Day)
Country Dec-05 Nov-05 YTD 2005 Dec-04 Jan - Dec 2004

CANADA 1,892 1,776 1,642 1,556 1,616
MEXICO 1,707 1,658 1,550 1,552 1,598
SAUDI ARABIA 1,438 1,267 1,438 1,449 1,495
VENEZUELA 1,183 1,009 1,231 1,379 1,297
NIGERIA 1,174 1,163 1,060 1,006 1,078
ANGOLA 425 641 450 306 306
IRAQ 390 572 520 626 655
ECUADOR 340 264 276 261 232
KUWAIT 268 273 215 205 241
ALGERIA 212 265 228 199 215
BRAZIL 159 65 94 0 51
GABON 139 66 127 233 142
COLOMBIA 135 281 156 135 142
NORWAY 66 103 119 63 143
TRINIDAD AND TOBAGO 62 70 62 22 49

Sure enough, we import the most crude oil from our neighbors to the north. In fact, approximately 36% of our imports come from our two North American neighbors and top two crude oil partners, Canada and Mexico, while only about 20% of our imports come from the Middle East.

Furthermore, because our imported oil represents only about 50-60% of our total consumption (meaning our domestic production makes up the balance), the percentage of our total consumption - around 20 million barrels a day - that comes from the Middle East is only in the range of 10-12%. That's it! And about two-thirds of that comes from Saudi Arabia with most of the remainder coming from Iraq and Kuwait.

Now, I don't want to necessarily imply that Middle Eastern oil is insignificant to us. Certainly, that region of the world has vast reserves of fossil fuels. But to learn that better than 75% of our nation's consumption of crude oil is supplied by the U.S., Canada and Mexico? Needless to say, it came as quite a surprise.

So it begs the questions: If we really aren't so reliant on Middle Eastern oil after all, why is it that we all believe we are? And why is it that our government continually drives home the point that we are?

And more to the point: Are we dependent upon the Middle East....or is the Middle East dependent upon us?

Another one of those things that make you go, "Hmmmmmmmm."


At 4:03 PM, Blogger Eric in Ottawa said...


I said this over at the mblog before...

That if we wanted to start really making a difference in the world, in terms of reigning in the insanity that seems to be ensuing thanks to our friends to the south, we should nationalize our oil resources, a la Venezuela.

We could even stop selling the United States our oil and sell it to some other country instead.

That would get their attention real quick. Of course, we'd probably find ourselves quickly "liberated" from our tyrannical government if we tried anything like that.

At 4:05 PM, Blogger Eric in Ottawa said...

er... the mblog can be found here in case you have no idea what i'm talking about.

At 4:56 PM, Blogger DrewL said...

Believe it or not, I believe there exists a plan of attack to invade Canada, should the need arise. And from what I understand, it is updated regularly. Of course, the U.S. military keeps all sorts of contingency plans available for such things. But it's still kind of creepy to think about, especially given that both of my parents are Canadian.

At 10:07 AM, Blogger Eric in Ottawa said...

Yeah, I don't doubt it one bit.

I'd like to think, in my naive little world, that the rest of the world would have quite a problem with that though.

Sigh. What a world we live in, eh...


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