268 PETROLEUM TECHNOLOGY, ECONOMICS, AND POLITICS
The dependency on foreign oil in the United States has increased
steadily since 1986 and has reached record highs in the past decade
two years — the degree of import dependence as percentage of
consumption increased from about 50% in the early-to-mid 1980s
to 60% in the early 1990s because of higher economic growth and
lower oil prices on the demand side and declining US production
on the supply side. Currently, 65-70% of the daily oil and oil products is now imported into the United States. There have been some
minor fluctuations but the changes in the amount of oil imported
into the United States are usually related to changes in the US economy and the US oil production.
The United States is the only oil-importing country with significant production, which is also a net importer. It is also unique
in that among the net importers it has the lowest dependence in
terms of net imports as a percent of consumption but it also has the
highest absolute level of imports. The geo-political and economic
interests and commitments raise the level of concern by US policy
makers about dependence on imported oil.
In addition, commercial oil stocks in the United States have
been at their lowest level three decades. Total petroleum inventories, which include commercial and stocks in the Strategic
Petroleum Reserve are relatively low, in terms of daily coverage.
Current commercial inventories are near the level at which spot
shortages can occur. The past decade has seen scenarios in which
the decline in commercial stocks is greater than the increase in
the Strategic Petroleum Reserve and the capacity of the Strategic
Petroleum Reserve and commercial stocks to deal with a crisis is
less than before the refilling program began (Williams and Alhajji,
2003). Moreover, the premature release of petroleum from the
Strategic Petroleum Reserve can jeopardize national security in
case of continued political problems in the oil producing countries and weakens the ability of the United States to respond to
real shortages.
Although some of the oil-importing countries have made progress in reducing their dependence on oil, the dependence of the
United States on petroleum has increased in recent years from 38%
of total energy consumption in 1995 to approximately 40% at the
current time. This indicates two possible areas of concern regarding the extent to which petroleum influences energy security: the
increase in the petroleum share of energy use, and the inability or
unwillingness of the United States to reduce dependence on oil.
The dependency on foreign oil in the United States has increased
steadily since 1986 and has reached record highs in the past decade
two years — the degree of import dependence as percentage of
consumption increased from about 50% in the early-to-mid 1980s
to 60% in the early 1990s because of higher economic growth and
lower oil prices on the demand side and declining US production
on the supply side. Currently, 65-70% of the daily oil and oil products is now imported into the United States. There have been some
minor fluctuations but the changes in the amount of oil imported
into the United States are usually related to changes in the US economy and the US oil production.
The United States is the only oil-importing country with significant production, which is also a net importer. It is also unique
in that among the net importers it has the lowest dependence in
terms of net imports as a percent of consumption but it also has the
highest absolute level of imports. The geo-political and economic
interests and commitments raise the level of concern by US policy
makers about dependence on imported oil.
In addition, commercial oil stocks in the United States have
been at their lowest level three decades. Total petroleum inventories, which include commercial and stocks in the Strategic
Petroleum Reserve are relatively low, in terms of daily coverage.
Current commercial inventories are near the level at which spot
shortages can occur. The past decade has seen scenarios in which
the decline in commercial stocks is greater than the increase in
the Strategic Petroleum Reserve and the capacity of the Strategic
Petroleum Reserve and commercial stocks to deal with a crisis is
less than before the refilling program began (Williams and Alhajji,
2003). Moreover, the premature release of petroleum from the
Strategic Petroleum Reserve can jeopardize national security in
case of continued political problems in the oil producing countries and weakens the ability of the United States to respond to
real shortages.
Although some of the oil-importing countries have made progress in reducing their dependence on oil, the dependence of the
United States on petroleum has increased in recent years from 38%
of total energy consumption in 1995 to approximately 40% at the
current time. This indicates two possible areas of concern regarding the extent to which petroleum influences energy security: the
increase in the petroleum share of energy use, and the inability or
unwillingness of the United States to reduce dependence on oil.