Lesson 58: Exploiting Crude Oil
In this lesson, we will talk about how the United States came to
be dependent on other countries for oil, and the problems of relying so heavily
on oil as an energy source.
Fossil fuels are formed from
the remains of living organisms over centuries (100 to
500 million years ago) buried deep in the ground.
Until 1970, the United States was largely energy independent, using its own
reserves. However, after this period, oil companies in the United States were
unable to locate new areas. With rising consumption and failing production, the
U.S. turned to imported oil from the Middle East primarily. So did Europe and
Japan.
There was an energy crisis in the 1970s when the Organization for Petroleum
Exporting Countries (OPEC) formed a cartel and restricted oil supplies for
larger prices. Shortages occurred and the U.S. paid a lot more money to get its
fuel supply back. Oil prices went up for the average consumer as well. After
this experience, the government increased production with oil exploration,
building the Alaska pipeline and opening old oil fields, stockpiling oil in an
underground reserve (enough for roughly over 1 month of supply at 19 million
barrels per day), and setting new standards of fuel efficiency for automobiles.
Buying oil from
Arab countries in the Middle East has come with a host of problems including
involvement in local wars, fluctuating prices and dealing with insurgents and
rebels such as the Taliban in Afghanistan and dictators like Saddam Hussein in
Iraq.
How long will oil reserves last?
With dwindling reserves and increasing demand worldwide, there is concern that
there is not enough oil to last the century. In Canada, there are oil shale
reserves that are being exploited today as the cost is competitive with oil
prices. Oil shale is a sedimentary material containing bitumen, a tar-like,
viscous hydrocarbon that can be melted and refined like crude oil. The Keystone
pipeline carries oil shale from Alberta, Canada to Oklahoma and Illinois. The
United States also has oil shale reserves in the central part of the country.
However, the process is laborious and inefficient - a ton of oil shale yields
less than half a barrel of oil.