U.S. Dependence on Oil in 2008: Facts, Figures, and Context
Andrew S. Grove, Robert A. Burgleman, and Debra Schifrin
Stanford University Graduate School of Business, Research Paper No. 1997
An understanding of the scope and ramifications of the United States’ dependence on foreign oil will be crucial in helping the Obama administration chart a sensible energy policy. The authors of this paper provide an in-depth examination of U.S. energy consumption in 2008, paying special attention to the strategic implications of the nation’s dependence on foreign oil. They note that there are five primary sources of global energy — oil, coal, natural gas, nuclear power, and renewable sources (including hydro, solar, and wind) — and that the United States relies on oil for 40 percent of its energy needs. The transportation and industrial sectors use 93 percent of the 20 million barrels consumed in the U.S. each day, 65 percent of which are imported from overseas. The price shock experienced in 2008, when oil prices rocketed to more than US$140 a barrel, slammed the U.S. economy, causing sales of SUVs to plummet and forcing airlines to ground portions of their fleets. The authors also note that the U.S. military, which uses more than 57,000 barrels of oil each day in Iraq and Afghanistan, is almost completely dependent on oil to power its vehicles. The study highlights the need for the U.S. to reduce its reliance on foreign energy to remain competitive in a rapidly changing global environment.
Recognizing the degree to which the United States relies on foreign oil is a critical first step on the road to long-term energy independence.