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July 22, 2010
The costs and risks of domestic oil production are projected to rise substantially as production from older U.S. oilfields declines and drilling expands into more difficult and challenging environments, such as deep offshore areas. Other costs and risks of U.S. oil dependence, including economic vulnerability to price shocks, geopolitical instability, military expenditures, health effects, oil spills, and other environmental impacts, are already significant and likely to increase if global demand continues its upward trend and supplies tighten. These direct and indirect costs add up to a true cost of oil that, by some estimates, is at least double current market prices.
On July 22, 2010, the Environmental and Energy Study Institute (EESI) and the Office of Senator Jeff Merkley held a briefing on America’s dependence on petroleum and potential strategies to reduce U.S. oil use. According to numerous studies, and as illustrated by the catastrophic oil spill in the Gulf of Mexico, the costs and risks of America’s continued reliance on oil are projected to increase. This briefing examined different technology and policy options to cut oil consumption.
With approximately 70 percent of U.S. oil consumption devoted to transportation, proposed strategies to reduce U.S. oil dependence have focused on non-petroleum fuels and increased efficiency of both vehicles and the overall transportation system. The Oil Independence for a Stronger America Act (S.3601, related House bill pending), sponsored by Senators Jeff Merkley, Tom Carper, Tom Udall, and Michael Bennet, would achieve oil savings of approximately 8 million barrels per day (mbd) by 2030 (from a projected baseline of approximately 19 mbd), and eliminate oil imports from non-North American nations.