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Dependence on oil hurts us

Report of serious corrosion in an Alaska pipeline owned by British Petroleum last week was bad news on top of bad news as fuel costs for Americans remain high.

Gasoline in many parts of the country has topped $3 a gallon for unleaded regular, although the average price in Albany pulled back to about $2.88. Fluctuations are the norm, but the trend lines all point upward. The U.S. Chamber of Commerce newsletter this month laid out facts that support the belief prices will not return to the low levels Americans have always enjoyed.

Americans' "addiction to oil" is on record. Since the 1991 recession, the U.S. demand for crude oil has risen 24 percent. From 1998 to 2005, usage rose 9 percent, according to the newsletter. Concerning gasoline supplies, less than 1 percent of total U.S. consumption in 1995 was met by imports, but last year imports supplied 5 percent of gasoline consumption.

Although the United States is the third-largest producer of crude oil in the world, we have to import two-thirds of our oil supplies because we consume more than any other country. Our consumption of crude oil, which accounts for about 50 percent of retail gasoline prices, according to the newsletter, far exceeds what we produce.

Oil consumption worldwide can be divided between developed countries, such as the U.S., Canada and Europe, and developing countries, such as China and India. Between 2002 and 2005, need for oil by developed countries rose 4 percent, while their production declined 7 percent. In developing countries, both usage and production increased by 14 percent.

The gap is expected to widen in the future as developing countries' demand for oil escalates. Their production will increase only marginally. Production by the U.S. and its peers is expected to continue to decline. In Prudhoe Bay in Alaska, which supplies 8 percent of all U.S. crude oil production, British Petroleum said last week it will be operating for months at only half its normal production of crude.

We're becoming more dependent on foreign countries meeting our oil and gasoline needs. The greatest oil reserves are concentrated in members of the Organization of Petroleum Exporting Countries (OPEC), many of which historically have been unstable politically and socially. Consider Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria Qatar, Saudi Arabia, United Arab Emirates and Venezuela.

The U.S. has placed the backbone of its entire economy in the hands of countries where anything can happen tomorrow morning.

We can't escape inflation because rising fuel costs are part of everything in our lives — travel, entertainment, food, clothing, construction, governments, etc. Companies use fuel both in production and delivery. Even if consumers are willing to pay increasing costs, Americans must be more aggressive in conserving and seeking alternative fuels. Our nation is at risk.

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