Why does the U.S. Import a lot of oil?
Over the course of the past few years, a great deal of media attention has focused on the not only the cost of oil but the availability of oil. Citizens of different countries around the world, including those in the United States, have become increasingly concerned about the cost and availability of fuel oil.
With that in mind, many people have expressed concern about:
• the growing dependence of the United States on oil imports
• the stability of the major oil producing nations
• the remaining proven oil reserves still existing on the planet
We know the U.S. actually gets most of its imported oil from Canada and Latin America. And many Americans might be surprised to learn that the U.S. now imports roughly the same amount of oil from Africa as it does ...view middle of the document...
As a general rule, the cheapest oil is already being extracted.
Meanwhile, other nations are sitting on large quantities of "easy" oil. They can produce oil much more cheaply, relative to their opportunity costs, than the United States can. Many of these nations are desert nations with no other major industries. They have historically been among the poorest nations, before they were able to make money by selling oil to the rest of the world.
In short, oil is their specialty, and they have few options besides oil for making money off of their own resources. This makes their opportunity costs lower than those of the United States.
The "easy" oil can be produced in the United States is not enough to meet the domestic demand, since everybody knows that there is other oil on the world market. So the United States produces some oil, but consumes a lot of oil from cheaper foreign sources.
Why does the U.S. consume such a huge amount of oil?
From the 1940s onwards, The U.S. government started the construction of the road network throughout the country, so as to promote the popularity of cars and car industry. In order to support the automotive industry as a pillar of the national economy, the government’s policy encourage public consumption of gasoline for a long time. This is why the U.S. long-term maintenance of a low level of fuel duty. First, the U.S. economy developed, the oil is the blood of industry, including many industry chemicals, petroleum refining medical needs taken from the production of raw materials, on the other hand a lot of power is provided by the oil.
Secondly, due to the United States is the world's largest family car, diesel and gasoline demand is also largest in the world.
Thirdly, the U.S. has a huge military force, and there are aircraft from fighters to "eat the oil of the devil."
Fourth, in order to avoid the risk of rising oil, the U.S. reserves a lot of oil.