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U.S. Foreign Oil Dependency

President George W. Bush said in his speech on Feb. 1, 2006 "America is addicted to oil", which quickly became a favorite quote in the press recently. Both sides of the political aisle seem to agree with him (a rare scene in the current political landscape) and vowing to reduce the dependency to foreign oil has quickly become one of the major popular political strategies for the 2008 campaign to the White House. But to what extent the US depends on the foreign oil is quite much debatable.

Popular Belief
The famous Texas oil man, business tycoon T. Boone Pickens claimed in his Pickens Plan and TV commercial that US imports a total of 700 billion dallors worth of oil from different parts of the world annually — mostly from the Middle East countries; and this is the biggest transfer of wealth in the history of mankind.

Government Data Source
According to the U.S. DOE (Department of Energy) data source, the United States consumed 20.7 million barrels per day (MMbd) of petroleum products during 2007 making us the world’s largest petroleum consumer. The United States was third in crude oil production at 5.1 MMbd. But crude oil alone does not constitute all U.S. petroleum supplies. Significant gains occur, because crude oil expands in the refining process, liquid fuel is captured in the processing of natural gas, and we have other sources of liquid fuel, including biofuels. These additional supplies totaled 3.6 MMbd in 2007. However, we still needed 13.5 MMbd of imported crude oil and petroleum products to meet U.S. demand. The United States also exported 1.4 MMbd of crude oil and petroleum products during 2007, so our net imports (imports minus exports) equaled 12.0 MMbd.

The 700 Billion Dollars Question
Based on the current oil price of $100 to $130 per barrel (assuming it reaches $150 dpb by the end of 2008), the total worth of imported foreign oil is:

12,000,000 bpd × 150 dpb × 365 dpy ≈ 657 (billion dollars per year)

where

bpd = barrels per day

dpb = US dollars per barrel

dpy = days per year

This more or less confirms the 700 billion dollars oil import mentioned in Pickons' TV Commercial

In the Pickens Plan, Mr. Pickens projected that oil price will reach more than $200 dollars per barrel in not so distanced future. For more information please check with the Pickens Plan and related reference.