Ending Dependence On Mideast Oil

Sen. Obama has spoken since the Democratic Convention of ending our dependence on Middle East oil in 10 years. That would be tough.

If we simply bought oil from countries outside the Persian Gulf, we would not escape the influence of the Middle East. That's because oil is a global commodity, so the global price is determined by all the major producers, regardless of who buys from whom.

The US imports more than half of its oil. Of that, 20 percent comes from the Middle East. So the Gulf provides about 10 percent of the oil we use. If we reduced consumption by 10 percent, we would still need to import plenty of oil. And, again, the Middle East has a big say in the global price of oil. Production levels in the Persian Gulf would still affect the amount we pay at the pump.

Drilling offshore of the United States wouldn't yield significant amounts of oil for about 10 years, and even then we could not expect to pump as much from those sources as is currently produced in the Persian Gulf. We could possibly increase global oil production by a few percent, so that would not have a large effect on the price of oil.

As we have recently seen, our oil consumption can go down -- as long as the price goes up enough. Sustained high oil prices could help us limit the amount of oil we consume, but it would not make consumers happy in the process.

Researchers are working on alternatives to oil, such as biofuels made from plant material. However, that requires building a whole new industry. And it will take decades, not years, to ramp up production. It's reasonable to assume we can produce about 30 percent of our fuel needs by 2030 with these alternative fuels -- but the industry is not a sure bet.

-- Richard Harris

11:37 PM ET | 10- 7-2008 | permalink

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