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The History of US Oil Consumption (good read) [View All]

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Deja Q Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jun-21-04 09:32 PM
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The History of US Oil Consumption (good read)
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Up until the 1910s, the United States produced between 60 and 70 percent of the world's oil supply. As fear grew that American oil reserves were dangerously depleted, the search for oil turned worldwide. Oil was discovered in Mexico at the beginning of the twentieth century, in Iran in 1908, in Venezuela during World War I, and in Iraq in 1927. Many of the new oil discoveries occurred in areas dominated by Britain and the Netherlands: in the Dutch East Indies, Iran, and British mandates in the Middle East. By 1919, Britain controlled 50 percent of the world's proven oil reserves.

After World War I, a bitter struggle for control of world oil reserves erupted. The British, Dutch, and French excluded American companies from purchasing oil fields in territories under their control. Congress retaliated in 1920 by adopting the Mineral Leasing Act, which denied access to American oil reserves to any foreign country that restricted American access to its reserves. The dispute was ultimately resolved during the 1920s when American oil companies were finally allowed to drill in the British Middle East and the Dutch East Indies.


By the early 1970s, the United States depended on the Middle East for a third of its oil. Foreign oil producers were finally in a position to raise world oil prices. The oil embargo of 1973 and 1974, during which oil prices quadrupled, and the oil crisis of 1978 and 1979, when oil prices doubled, graphically illustrated how vulnerable the nation had become to foreign producers.

The oil crises of the 1970s had an unanticipated side-effect. Rising oil prices stimulated conservation and exploration for new oil sources. As a result of increasing supplies and declining demand, oil prices fell from $35 a barrel in 1981 to $9 a barrel in 1986. The sharp slide in world oil prices was one of the factors that led Iraq to invade neighboring Kuwait in 1990 in a bid to gain control over 40 percent of Middle Eastern oil reserves.

In the century-and-a-half since Edwin L. Drake drilled the first oil well, the history of the oil industry has been a story of vast swings between periods of overproduction, when low prices and profits led oil producers to devise ways to restrict output and raise prices, and periods when oil supplies appeared to be on the brink of exhaustion, stimulating a global search for new supplies. This cycle may now be approaching an end. It appears that world oil supplies may truly be reaching their natural limits. With proven world oil reserves anticipated to last less than forty years, the age of oil that began near Titusville may be coming to an end. In the years to come, the search for new sources of oil will be transformed into a quest for entirely new sources of energy.

The ending is a bit sappy and optimistic... but the alternative is too depressing and akin to putting our own necks in the noose and withdrawing the plank.
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