1. Honors C.A.D.

2.  We know that our oil supplies are varied, and that we have an INCREDIBLE thirst for oil.  Where does it come from? Where do we get it from?  http://www.pbs.org/frontlineworld/stories/colo mbia/images/map.swf

3.  In reality, we do import close to 60% of our oil.  We use 20 million barrels of oil a day (178 million gallons).  The Point – WE NEED A LOT OF IT!

4.  Why does oil change in price so often?  Think back to supply and demand:  When global supply decreases, what happens to the price? – It increases.  Seasons also affect prices – How?  Cleaner-burning summer fuels add to this

5.  What else can affect prices?  Natural disasters – think Katrina  Refining capacity  Political instability

6.  To make things simple, think of a dollar’s worth of gasoline. Who get what out of that dollar?  Taxes: 15 cents  Distribution and Marketing: 11 cents  Refining: 7 cents  Crude oil suppliers: 67 cents  In other places, gasoline is much higher because of higher taxes, distance from refineries.

8.  Drilling – mostly on land – Middle East, Africa, Canada, Russia, etc.  Shipped here in tankers and refined  Offshore drilling – billions of barrels of oil underneath the ocean, but there are risks:  Storms disrupting production  Rough seas  Oil spills – like right now

9.  Imagine this situation:  Probable Oil Reserves stand at 531 billion barrels  The world consumes 16.5 billion barrels each year.  How many years until we run out?

10.  You would think that the world was over here!  Those numbers reflect 1970 statistics.  Today, we consume over 26 billion barrels of oil each year, and reserves stand at over 1 trillion.  We probably will never pump every barrel of oil out of the Earth – Why?

11.  The answer, if you are wondering, lies with “probable reserves.”  Probable reserves – oil/coal/gas that has been discovered and can be extracted with current technology.  What can change about probable reserves?

13.  Where does our oil come from?  Why the price changes all the time?  What are some potential causes to a price change?  “How” do we get it?  Define a probable reserve, and how they can change.