Interesting Facts About U.S. Consumption of Oil

U.S. oil reserves have declined to the point that annual U.S. oil consumption is now equivalent to about 1/4th of total proven reserves. This means that if the USA had to supply its own oil, and no new discoveries occurred, its only would be gone in 4 years! (http://www.hubbertpeak.com/us/)

The U.S. dependency on oil has been driven by 25 years of relatively "cheap oil". Despite the recent rapid rise in fuel costs, since the last price spike in 1979 on an inflation adjusted basis oil prices have dropped more than 75%. This era of "cheap oil" lead to fundamental shifts in the way the global economy has worked:

1. Longer commutes to low priced housing options (1-2 hour commutes)
2. Manufacturing moved off-shore to leverage labor cost advantages overseas due to inexpensive ocean freight
3. Just in time inventories since partial truck (rather than full truck load) deliveries were economically feasible, lowering the overall cost of inventories and carrying costs

Due to these fundamental changes in our economy, how much more oil are we consuming than other industrialized nations? According to an August 12, 2008 article in the WSJ, a lot! In 2007,

• Japan consumed 14 barrels per person
• Eurozone consumed 17 barrels per person
• U.S. consumed 25 barrels per person