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Projection: US to Pay $440B for Imported Petroleum in 2008

Petroleum Intelligence Weekly (PIW) projects in its latest issue that the US will pay $440B for imported crude oil and finished petroleum products in 2008—an increase of some 300% since 2002.

Piw
The imported petroleum bill. Click to enlarge.

The increase to the estimated $440 billion for 2008 is based on an average $90 per barrel crude oil price for the year. In 2002, before the current bull market for oil began, US oil imports cost less than $103 billion. The preliminary figures for last year came to some $327 billion.

PIW calculates that the US paid out a record $245 billion for about 10 million barrels per day of crude oil imports in 2007, and another $82 billion for about 3.5 million b/d of imported oil products. With US crude production continuing to fall, demand for imports of high-priced transport fuels remaining strong, and oil prices around 30% higher year-on-year so far in 2008, PIW sees the bill continuing to rise.

With oil prices this year as strong or stronger than in 2007, any moderation in the US import bill must come from reduced volumes. While oil demand growth has slowed slightly in recent years due to both high prices and greater fuel efficiency, the higher quality of crude oil imports that US refiners require and the emphasis on high-quality transport fuels in the product import mix are likely to keep upward pressure on import costs even if volumes are stable, according to PIW.

Although “energy security” and “dependency on the Mideast” get the attention in the national debate over oil imports, huge and rapidly rising costs are of greater immediate economic significance, PIW says. Relatively secure supplies from Canada and Mexico account for about one third of crude imports.

Comments

litesong

Its so obvious that my 1988 Ford Festiva (averaged 45MPG & still have it) was needed in 1988 & is so much more important in 2008. I even took the bus at times despite my Festiva. Its time & way past time for gas guzzler people to reexamine their wants & see if their lives can operate even better with more efficient transportation. Surely they will have more money instead of burning unnecessary fuel.

aym

How much can short term thinking be changed though? Housing is sprawling and specialized JIT production needs moving as well as food. There is a maximum amount that can be saved due to these infrastructure limitations from years of cheap energy. Should'a used the surplus in the good years for better things.

GreyFlcn

And they will spend less than $0.25 billion on solar/geothermal/hydro/wind combined.

stomv

"There is a maximum amount that can be saved due to these infrastructure limitations from years of cheap energy."

That's true -- but we're nowhere near that maximum.

In the immediate term, we could pass tax incentives on higher mpg vehicles at the purchase price, higher gas taxes, higher tolls on roads, more hov lanes, etc.

In the 3-5 year term, we could invest substantially in mass transit infrastructure -- both local and between cities.

In the 5-10 year term, we could start seeing results from changing zoning code now, as well as results from investing in elec-hybrid car infrastructure, which hopefully corresponds with a reduction in GHG generated from elec due to elec infrastructure improvements.


What is that maximum? I believe that we could cut our oil consumption by 3-5% per year indefinitely. There won't be one effort: it will have to be a comprehensive effort of fed, state, and local gov't tax, zoning, and regulatory policy.

MeanandGreen

Our soaring oil import bill is a disgrace and every congressmen, senator, and president that has held office over the past 20 years should bow his and her head in shame as the resulting damage to the U.S. economy and global environment grows to new heights.

The dollar is plummeting under the weight of endless U.S. budget and trade deficits, soaring dollar holdings worldwide, and all these cowards had to do was impose higher fuel and/or a carbon tax to reduce oil consumption and imports, encourage innovation, energy efficiency, and electrification of transportation. I think that future generations of Americans, saddled with a soaring federal and foreign debt, a hot and eventually dry climate, an environmental genocide resulting from the massive extinction of defenseless wildlife and plant life, will curse our current leadership and lack of action to clean up this mess. Buffet has it wrong.

Santos

"all these cowards had to do was impose higher fuel and/or a carbon tax to reduce oil consumption and imports"

The only way to have voters remove you from office any faster in the US is to be caught in bed with a young boy.

Harvey D

GreyFlcn + Mean&Green:

Yes, less than $1 billion a year for solar-geothermal-hydro-wind combined but $400+ billions a year for imported oil by 2008 (+ many more billions for imported NG, electricity and ethanol) is far from being a balanced (or intelligent) energy approach.

Add another $150+ billions for Oil wars and a possible $150+ a barrel oil price for 2009/10 and the situation may be a lot worse.

How can the American public agree and support such shortsighted (pro-oil) leadership when they very knew that 200 million gas guzzlers would quickly gulp 2 to 3 times the oil that USA can produce.

Changing 200 million (under 20/22 mpg) gas guzzlers for 200 million efficent 50+ mpg vehicles (hybrids-PHEVs and BEVs) is not an overnight affair and will take up to 20-25 years.

Producing corn ethanol and other biofuels at the rate of 18 million barrels/day is not possible without drastically reducing food production.

The choice (for the short and mid terms) may be between importing food or Oil to keep the inefficent fleet on the road.

A crash national program to develop, produce, promote and sell PHEVs + BEVs to replace the older (worse) gas guzzlers, at an accellerated rate (up to 10+ million units a year) could reduce the transition period by a few years. France is doing just that by offering up to $10K towards the purchase of a BEV to people who will scrap an older gas guzzler. Why coundn't USA do likewise for the purchase of PHEVs and BEVs and to take 10+ year old vehicles and gas guzzlers off the roads.

litesong

Lots can be done politically & hope that avenue gets started.

Americans have to see their individual economic choices are crucial to save America. For the decades I've driven my small cars to work, all I got was derision from those many people who thought only big guzzlers & trucks were the way Americans should live their lives.

I thought in the late 70's & early 80's, that gap had been bridged with the smaller cars I saw. However, Americans had only temporarily been drug to small cars & have since embraced the big again. I'm afraid even if Americans can be drug back to more efficient vehicles, they still won't subscribe to the things necessary to keep America healthy, economically & politically.

ejj

Truly sickening. $4 a gallon for your car, and billions to fight wars against scummy countries overseas. We're funding terrorism; paying to kill our own countrymen & military members........energy independence now!

GreyFlcn

Harvey, check this:
http://greyfalcon.net/iraqvsenergy.png

Harvey D

litesong:

Are you saying that the average American would rather give up other essentials in order to keep driving their huge (monster) gas guzzlers.

If so, the 'bigger' & 'heavier' than yours addiction is rooted much deeper than I thought and USA may be in for a rough ride.

Turning every thing that grows into fuel may not provide the 15 to 20 million barrels a day required to feed this persistent addiction.

Will we see more costly Oil wars to ensure Oil supply?

Will much higher oil price make a difference and reduce consumption? If not, the trade deficit will reach new summits and the USA $ new lows. A lower USD means higher Oil price (in USA dollars).

Of course Canada could help with about 5 million barrels a day from the tar sands but the economic, environment and political price will be high.

Let's hope that the next generation will adopt other values.

Treehugger

This chart illustrates beautifuly the "Hard awakening" that america is due to, in the same time america will have to pay 140 billiaons / year for iraqui war and they forget to mention that we are becoming a net importer of natural gaz as well as coal since domestic production is stalling. With a collapsing dollards is going to be tough to buy more of this import of energu

The american dream is in jeopardy and that is only the beginning....

Joel

Santos, European politicians are able to charge higher fuel taxes, adopt congestion, carbon taxes and/or cap and trade, and sleep around while still staying in office. Note also that the Euro is one of the strongest currencies in the world, and energy prices are not increasing in Euro terms.

But you are right in one sense, we Americans elect these morons, even though they are helping to destroy our economy, our way of life, and our environment, while mortgaging our children's future through oil wars, and rising foreign and government debt. U.S. conservatives espouse a bankrupt ideology that advocates: tax cuts regardless of government spending levels; so-called free trade regardless of a country's human rights, labor and environmental practices; protecting the life of the conceived and unborn, but trashing the lives of future generations; pre-emptive war in anticipation of vague terrorist threats but do nothing policies with respect to climate change, environmental genocide, and the poverty of developing countries; safe haven for terrorists in allied countries (Pakistan and Saudi Arabia), but warfare with countries(e.g., Iraq) that are hostile to the U.S., even if they are state level rather than terrorist threats; and providing military protection to middle east oil producers so they can in turn fund Islamic terrorists and supply our international rivals with cheaper oil.

Cervus

Treehugger:

I'm not so sure about natural gas any more. Just recently new drilling methods have been developed that could free hundreds of trillions of cubic feet. As shown in this previous GCC article.

I doubt we'll become a net coal importer any time soon, since we simply have so much of it. Fear of carbon taxes has already shelved 1/3 of planned coal plants since last year to boot.

DS
$4 a gallon for your car, and billions to fight wars against scummy countries overseas. We're funding terrorism; paying to kill our own countrymen & military members

It's a Win-Win situation for Halliburton, Blackwater, KBR, Exxon, GOP......

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