1. 1 The Cost of Energy Dependence Frank Clemente Ph.D. Senior Professor of Social Science & Energy Policy Penn State University fac226@psu.edu

2. 2 The Price of Energy Dependence ●Dependence means loss of control. In 2000, the EIA projected oil would be $25 per barrel in 2008. Actual price is over $130 ●Cost of imported oil- record trade deficits. Over a decade we will spend more than $5 trillion to buy foreign energy -- $50,000 for each American household. ●Disproportionate costs. Lower income groups spend as much as 15% of their income on energy. ●Competition for oil from China, India and other developing nations must now be factored into our energy planning. ●National security is at risk because we are vulnerable to sudden disruptions and extortion---Iran, Russia, Venezuela

3. 3333 The Reality of Energy Supply in the U.S.-- Oil and NG Production have both Peaked

4. 4 Our Growing Dependence on Foreign Crude Oil DependenceDependence

5. 55 The Cost of Dependence— Transferring wealth of the American People Annual Cost of U.S. Petroleum Imports

6. 6666 The U.S. Bets On A Brave New World Where new NG supply came from 1993 - 2006 Where new supply is projected to come from 2006-2019 Source: EIA “North America is setting itself to import LNG in large quantities” (IEA, 2007)

7. 77 Emerging Competition for LNG :

8. 88 What We Pay for LNG Now and Will Pay if NG Replaces Coal For perspective, if NG replaces coal generation the cost for LNG from 2015-2030 would be over 3 trillion dollars with Projection based on NYMEX Future Strip to 2013