Posted by: Francis Koster Published: January 10, 2012

Brighter Days Ahead for U.S. Energy Supplies

Brighter Days Ahead for U.S. Energy Supplies

by Francis P. Koster, Ed.D.

There are several reasons for optimism about our energy situation as we kick off 2012.

Americans have been fearful of a repeat of fuel shortages and economic disruptions ever since the 1970s, when Arab nations cut off oil supplies. And there has been good reason for fear: Until recently, our oil imports from countries that did not like us were growing rapidly. Many Americans are not aware this situation is changing for the better.

The first reason for optimism is that our petroleum energy imports have dropped significantly from their all-time high in 2005, when we imported 60 percent of our demand. During 2010, we imported slightly less than half — a stunning drop after four decades of continuous growth. (2011 numbers are not out yet, but early reports show the trend continuing). Of the 11 percent decline in imports since 2005, it’s estimated that about half is due to increasing energy conservation efforts, fuel efficient cars and so forth, and the balance due to our economy getting gut punched in 2008.

The second reason for optimism has to do with who we get our imports from. For now, at least, the days of getting the majority of our oil from the Middle East are gone. Now we import only 12 percent from Saudi Arabia. Our biggest import sources are Canada (25 percent), Nigeria (11 percent), Venezuela (10 percent) and Mexico (9 percent).

Reason No. 3 is that advances in technology have made it possible, if adequate environmental protections are enforced, to extract more oil and natural gas from existing reserves inside U.S. boundaries. This supply is much less vulnerable to terrorists who may try to interrupt our supply lines.

For all this good news, we still have challenges. Having a more secure supply does not mean we have cheap energy. Even if a lot of energy is pumped, mined or refined by companies operating in the United States, our citizens do not have an automatic right to it. Rather, these fuels are sold at a global auction, and we are bidders against other countries, even for energy supplies taken from under our feet.

Recall that there are about 300 million people in the United States, and eight times more (2.6 billion total) in India and China alone. For many years, U.S. citizens have consumed about 20 times more energy per citizen than a citizen of India. As others even double their per-citizen consumption, and go from using “essentially nothing” to using “close to nothing,” the demand on global markets is as if another United States started buying fuel. And in the global auction, prices will inevitably rise as customers try to outbid each other.

And that leads us to the opportunity, which is the reduction in public health problems caused by pollution linked to oil and coal energy supply and production. Did you know that more people die of the effects of air pollution in the United States than die from auto accidents? About 10 years ago, it was realized that in the United States, traffic fatalities totaled just over 40,000 per year, while air pollution (much of it from cars and coal-fired generating stations) claimed 70,000 lives annually. U.S. air pollution deaths were calculated to be equal to deaths from breast cancer and prostate cancer combined. More recently, using newer study techniques and advanced computing, studies done by the California Air Resources Board show the death rate in California is roughly triple these previous estimates.

Thanks to the effectiveness of regulations - such as fuel mileage standards for cars, emissions controls on power plants and energy conservation building standards - we are beginning to do a better job balancing the good from energy use while limiting the bad side effects.

In your own home, if you own an older electric water heater and it feels warm to the touch on the outside, you can buy an insulating blanket specially made for water heaters. Depending on your family water usage and thermostat setting, this will save 4 to 9 percent of your water heating bill. If you can slide an insulating piece of rigid foam under the same tank, you save another 4 to 9 percent. You have saved money, and reduced national health care costs — I am proud of you!

As energy prices inevitably rise in the global auction, more and more of our energy needs will be met by efficiency savings, energy conservation and new, cleaner sources. If we do this, our nation will become healthier and more secure; the taxpayer will save money; and our future will be brighter.

Copyright 2011. All rights reserved.

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Francis P. Koster Ed.D.

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