Hello there
In one word "economics."
The short answer is that it would seem to economically benefit those
selling to us more than it benefits us. We spend $50 billion a year
on imports. But, that is only looking at the surface.
Whether it is oil or any other product, trade benefits the importing
nations when the product imported is less costly than the domestic
alternative. U.S. domestic resources are far more costly to produce
than foreign alternatives.
To expand on that short answer - - A good example can be made from 20
- 30 years ago. The US went into oil price shock because of
uncontrollable events in the OPEC nations. This in turn produced
record rates of drilling in the US. This drilling spree involved tax
relief and other incentives to encourage the exploration and drilling
of these wells.
Between the early 70s and 1980, the total footage of wells increased
three times over. The amount of new capital investment in the economy
going to the oil industry rose from 2% to 7%.
Here is what we got in return for that investment. During that same
time, US production dropped 7% and the petroleum industry's share in
the GNP dropped from 4% to 2%.
The gap between investment and production totaled more than $100
billion from 1975 to 1987. That enormous diversion of income would
have produced much greater economic benefits if it had been invested
somewhere else in the economy.
The reason for the mismatch between investment and the return of that
investment is due to two factors. Over time, the domestic oil
resource is depleted to the extent that large investments in drilling
can't provide a commensurate increase in oil supply.
"On net, depletion effects outweigh technology in discovery,
development, and production. Production and proved reserves of oil
have dropped more than 40% since their peaks in 1970 despite a massive
drilling campaign. Returns to drilling generally have fallen as well.
Second, short-run increases in drilling effort reduce return on
investment through the "highgrading" effect. At high drilling rates,
lower quality resources are targeted for development, and vice versa.
Much of the recent increase in drilling "success" is due to the
collapse of drilling effort in the last decade.
"The gap between output and investment disappears in 1986, and has
remained so through the present. Note as well that the size of the
investment-output gap rises and falls with the drilling rate. There
is every reason to believe that the gap will re-appear should
political decisions that promote domestic production through sunsidies
or other means." - - Quote from "Why the Bush Oil (Energy) Policy Will
Fail" by Cutler J. Cleveland and Robert K. Kaufman.
http://www.hubbertpeak.com/cleveland/bushpolicy.htm
Now, in another word "ecology."
While this may sound like an "America First" and rather selfish kind
of statement, importing oil helps keep our own natural environment in
better condition. You will also realize when you visit the website I
am garnering most of this information from, that I am paraphrasing
much of it, with credit given. The reason is that first of all we
cannot simply fill an answer with nothing but quotes. Secondly, while
the essay being used is rather short, it provides the most easily read
and understood explanation for continuing imports I have found. I
wish I could simply copy and paste the whole thing because it provides
an excellent answer to your question.
Those people who are pushing the hardest for US independence from oil
imports are of course pushing for, and looking at, the Arctic National
Wildlife Refuge among other places.
The USGS estimates there is about 20.7 billion barrels in the ANWR and
the amount recoverable with existing technology is 7.7 billion
barrels. The amount that can be recovered economically at a $20 per
barrel price is estimated to be about 3 billion barrels.
WOW, that is a lot of oil isn't it? There is so much oil there to be
recovered, that the technically recoverable oil will last us a whole
year or more (390 days at current use rates). The economically
recoverable oil would last us an entire 152 days. Now that is
certainly worth messing up the Alaskan wilderness for, isn't it? - - -
My apologies, I do have a tendency to sermonize at times
You can read the whole story here:
http://www.hubbertpeak.com/cleveland/bushpolicy.htm - the same
citation given above.
Importing oil works to our economic benefit and our ecological
benefit. There is one other concern which is not addressed in the
article. With the US oil production reserve being as low as it is, it
would also seem to be in our best interest to conserve it for future
need should the international situation deteriorate or should foreign
supplies dwindle for any reason. There is also the prospect that by
keeping this oil in reserve, we may in the meantime develop renewable
resources to the point that such a low reserve could readily supply
those industries for which a petroleum substitute is currently
impossible, such as chemicals, pharmaceuticals, and certain high grade
lubricants.
All in all, it would seem that taking advantage of imports while we
can and for as long as we can would be to our advantage now and in the
future.
We spend $50 billion a year on imported oil. Current government
subsidies for domestic production range as high as $35 billion a year.
The energy plan proposed by the administration would increase those
subsidies by another $20 billion. Instead of spending $50 billion a
year on imports, which we know are available, we would be spending an
"additional" $55 billion a year for a 1 in 20 chance any hole drilled
in Alaska would produce oil, and even if they all did, the total
production would be less than 1% of global production. As the article
states, "dust in the winds of the global oil market."
Cutler J. Cleveland and Robert K. Kaufmann are professors in the
Center for Energy and Environmental Studies and the Department of
Geography at Boston University.
Search - google
Terms - benefits from imported oil, benefits from imported petroleum,
economics +of importing oil, oil imports and the american environment
If I may clarify anything before you rate the answer, please ask.
Cheers
digsalot |
