The Power, Politics and Ethics of Oil Villanova University Spring 2011

Oil Foot Poll How much do you know about oil?

Going green: How long could you go without oil? A.Six months? B.a month? C.a week? D.a day?

Oil Fact: The Hydrocarbon Age Petroleum oil is more than just gasoline; it is the primary component of much of modern day society….. diesel oil for transportation and power plants engine and machinery lubricants home heating oil asphaltrubberplasticsfertilizers synthetic fibers in clothing

Record high gas prices are the result of... A.the aftermath of the BP Spill B.environmental & taxes regulations C.political uncertainty within oil exporting countries D.increasing global demand coupled with fears that we are running out of oil reserves

Oil Fact: US Daily Demand 987,000,000 gallons  23.5 million 42 gallon barrels of oil (BPD = barrels per day)  25%-30% of daily global demand  45% - 55% for gasoline  Roughly the equivalent of the complete freshwater supply of the Delaware River Basin ( for NJ, E. PA, Delaware & NYC)  400% increase from consumption in 1950  Demand projections for 2020: 30 Million BPD or 1,650,000,000 gallons daily!

Oil Fact: Annual Global Demand 3,616,200,000,000 gallons  86.1 billon 42 gallon barrels of oil  The equivalent of the monthly supply of all fresh water used in the entire United States  Driven not only by the developed US market, but the exponential growth of the emerging Chinese, India and Southeast Asia markets

So what? Given our demand, the United States…. A.should not worry about oil just as long as the supply keeps coming B.is far too dependent on foreign oil C.is too dependent on oil from the Middle East D.is too dependent on oil..… period

Oil Facts: U.S. Supply US imports approximately 58% of daily supply US became a “net importer” in late 1990’s Our domestic options are….  Intensified deep off shore oil exploration in the Gulf of Mexico  Artic National Wildlife Reserve (ANWR)  Legally restricted Pacific coastline  Oil shale project in the Pacific Northwest

Where is the “hot spot” for U.S. oil exploration for potential reserves? A.Russia B.The Middle East C.South America (Venezuela and Columbia) D.Africa

Oil Facts: U.S. Supply Top 5 Oil Exporters to the U.S. (68% of all US imports)  Canada  Mexico  Saudi Arabia  Venezuela  Nigeria

Oil Facts: About Supply from Africa Africa has become a key growth market in oil exploration. Foreign oil companies have invested over $50 billion into African oil exploration and production. African petro-states received over $300 billion in oil revenue in By 2025, 30% of the oil imported to the US will be from Africa. (Currently 12%)

For the people of these African states, oil…. For the people of these African states, oil…. A.has greatly enhanced their livelihood B.has just begun to create an economic boom C.creates no real change for the average person D.has intensified political oppression and economic regression

The Paradox of Plenty Tight concentration of power and resources….  PROPERTY RIGHTS: exploratory block grants in hands of political elite  TECHNOLOGY: very specialized knowledge in the hands of “big oil”  MONEY: highly capital intensive business Leads to the prevalence of “rent seeking”…. I nefficient even corruption business practices on the part of both governmental and corporate actors funnel oil revenues for personal gain I nefficient even corruption business practices on the part of both governmental and corporate actors funnel oil revenues for personal gain Causing “Dutch Disease” and other societal ills

If Not oil then what???? SolarNuclearWindBio-fuels

U.S. Energy Sources Today: Non-Renewables  Petroleum40%  Coal22%  Natural Gas23%  Nuclear 8% Renewables  Biomass 3%  Hydroelectric Power 2.8%  Wind energy 0.1%  Solar energy 0.06%

When will we run out of oil? A.2020 B.2050 C.2100 D.Never

Reframing the Question… When will global oil reserves “peak”? (Peak= When more than half of all earth’s oil reserves are extracted) When does the Energy Return on Energy Invested become negative? When do the environmental consequences catch up with society?

Summation: Seven Key Questions 1.How steep will the global demand curve be? 2.Is there supply to match the exponential demand? 3.What are the economic cost to obtain excess oil? 4.What are the socio-political consequences? 5.What are the environmental consequences? 6.What should be our long term energy plan? 7.Will we come to understand the dangers on our pervasive dependence on petroleum and make difficult choices?