The Switch Of The United States Essay

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At the beginning of the year the President of the United States announced that the United States was in the middle of a nation wide energy crisis. The President gave many solutions including using more solar and wind energy, nuclear power, and drilling in the Arctic National Wildlife Refuge (ANWR). The President told the American people that they would have to watch their energy use and conserve as much as possible. Gas prices reached $2 per gallon in the Midwest for the second straight summer, and California continued to be hit by unprecedented power woes that forced rolling blackouts. The price of crude oil rose sharply, from around $10 a barrel to a peak of $37. The current rate has settled at about $26 per barrel. The cost of home heating oil rose as well. “Many energy analysts, while willing to apply the term “energy crisis” to California, say the nation, as a whole is not in the throes of a crisis. They note that oil imports continue unabated and say the current price problems come from shortcomings in the transmission of energy to companies and consumers.”(Energy Conservation News, 2000)

At the moment, our biggest problems, in the oil market, are that the United States is in the clinches of the mighty oil countries that decide how much oil to pump and sell to the United States. When an oil producing country is angry at the United States withholding oil until demands are met seems to be a popular solution. Leaving the United States to seek alternative oil sources to pump so as not to be at the mercy of these smaller oil producing countries and their blackmail attempts. The top three producers of oil are; Saudi Arabia with 8.10 billion barrels, United States with 3.24 billion barrels, and Russia with 2.56 billion barrels in a year. The top three consumers of oil are; United States with 7.06 billion barrels, Japan with 1.18 billion barrels, and China with 0.50 billion barrels in a year. The United States would have to almost triple its producing efforts to equal the consumption rate. Early last year, environmentalist and United States oil company executives found themselves sharing the same concern: low oil prices. As the year began, the average cost of crude oil continued to fall despite high demands during a cold winter, limited reserve capacity among members of OPEC and the continuing absence from the market of any oil from Iraq. In January, crude oil was selling at a five-year low of $12 a barrel. And OPEC, which once virtually dictated world oil prices by manipulating supplies, failed in two attempts to persuade its members to cut production by just 2 percent.

Environmentalists were dismayed because cheap oil meant a continuing lack of economic incentives to develop or switch to alternative energy sources. Average regular gasoline prices at the pump fell in January to $1.06 per gallon, obliterating the effects of the small energy tax imposed by the federal government the previous October to encourage conservation.

United States’ oil companies were unhappy with the low prices because 15 percent of the 6.6 million barrels per day they are capable of producing comes from wells that are very expense to operate. Oil executives estimated that they needed prices of about $18 per barrel to keep such wells profitable. By mid-year, oil prices had inched upward but still hovered below $17 per barrel – low enough to keep people “hooked on oil.”

Despite the bargain-basement prices, many electric utilities continued to reduce their reliance on oil in order to comply better with the 1994 Federal Clean-Air Laws. Such utilities, along with certain other industries, are capable of switching fuels. But, last year, the companies tended to stick with natural gas, which burns cleaner, even when oil would have been cheaper.

The main problem in the electric area of energy is that no one wants to use energy saving items until it is too late. The ensuing consumer rush of purchasing energy saving items is comparable to “closing the barn door after the horse gets out”. The majority of Americans do not try to save energy, then when a mild drought comes, like the one last spring, the United States has a major problem on their hands. In the northwest, there is an agreement between Washington State and California. The agreement is that in the summer Washington sells all its extra electricity to California, and in the winter, California sells all its extra electricity back to Washington. The drought that hit the northwest was no major problem for Washington or Oregon, but when California’s conservation efforts came up short they did not have any extra electricity to sell to Washington. Instead, Washington and Oregon had to sell electricity to California, which caused Washington and Oregon to drop into their own energy crisis. Thus causing a ripple effect across the entire northwestern United States.

The more serious problems are the long-term effects of our energy consumption. Americans continue to use fossil fuels, which are non-replenishable resources. Fossil fuels also, release toxins such as carbon dioxide into the atmosphere, which combine with other gases to form what is called Greenhouse gases. Greenhouse gases are so named because they work like the glass in a greenhouse: They permit sunlight to enter but prevent heat from escaping. Many scientists believe a buildup of greenhouse gases is causing global warming, the gradual heating of the atmosphere.

Now don’t be worried about using up all of the oil right away, there is estimated to be about 73 billion barrels in North America. However, only a small fraction of this can be extracted at current prices. Of the known oil reserves that can be profitably extracted at current prices, more than half are in the Middle East: only a small fraction are in North America. At the end of the 20th century, the world reserves of petroleum were estimated to be roughly 1 trillion barrels. By 1998 worldwide consumption of petroleum totaled 27 billion barrels a year. “The world’s natural gas reserves were estimated to be roughly 1,500 trillion cubic meters (5,000 trillion cubic feet). Worldwide consumption of natural gas by 1998 totaled 2.3 trillion cubic meters (82 trillion cubic feet) a year. At the end of the 20th century the world coal reserves were estimated to be roughly 1 trillion metric tons, and by 1998 world wide consumption of coal totaled 5 billion...

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