American Dependence on Foreign Oil As Americans, we are dependent on our cars to get us from point A to point B. Before gas prices hit four dollars a gallon, no one was concerned where the oil came from as long as it was there and we had an unlimited supply available. Today, the demand for oil is so high that domestic production cannot keep up. Now we are forced to seek oil from foreign countries. The problem now is that the economy, being as it is, has forced the price per barrel to go up, in turn making the price of gas go up.
With the dramatic rise in gas prices, the American people have started to change habits in order to save a penny here and there. Even businesses have to make adjustment in order to keep a workforce. Will the high price of gas change the American way of life? American Consumption Today, the United States is the largest consumer of oil in the world. On average, the United States consumes 20. 7 million barrels of oil a day (EIA, 2008) but we are the world’s third largest producer of oil (EIA, 2008). The United States produces 5. 1 million barrels of oil a day and 3. million barrels from various other sources but there is a 13. 5 million barrel shortfall (EIA, 2008). This information allows us to conclude that the United States produces 10% of the world’s oil but consumes 24% (EIA, 2008). The United States is 42% independent on energy but the remaining 58% comes from foreign countries (EIA, 2008). What is interesting is that 49% of the oil imported into the United States comes from the western hemisphere, not from the Persian Gulf (EIA, 2008). The United States only receives 16% of its oil imports from the Persian Gulf (EIA, 2008).
The Largest foreign source of oil for the United States is Canada and Mexico (EIA, 2008), but it seems any negative news from the Middle East raises gas prices. This is disheartening considering gas prices have gone up 104. 8% in the last year (EIA, 2008). Social Changes There is little doubt that the increase in gas prices will affect the American way of life. As Americans, we love to drive and we love to drive huge gas guzzling SUVs (Sports Utility Vehicles). With the increase of gas prices, Americans have started to change habits in order to pinch that penny. One of the biggest changes is the amount of miles we as Americans drive.
In June of this year, Americans drove 12. 2 billion less miles compared to June of last year (Doggett, 2008). The decrease in the amount of driving has made the demand for oil drop by 800,000 barrels a day (Doggett, 2008). While Americans are driving less, they are also looking for transportation that is more efficient. In the automobile market, SUV sales have continued to drop while car sales have increased because of better gas mileage (Doggett, 2008). In a recent survey, 79% of those who responded said they were going to buy a more fuel-efficient vehicle (What to do about gas prices, 2008).
Have you ever considered getting a scooter? Many Americans have. Scooters are cheap costing from $1,500 to $6,000 while getting 75 miles per gallon (Dilonardo, 2008). Scooter sales have increased 24% in the first three months of this year (Dilonardo, 2008). The only drawback, the humiliation of actually driving one, but it seems many people are swallowing their pride in order to save some money. The increase in car sales, drop in SUV and truck sales, and the increase in scooter and motorbike sales are not the only social change that is effected directly by the high price of gas.
In a congressional hearing, it was determined that the high price of gas directly contributed to the increase use of public transportation (Millar, 2008). Americans took 2. 8 billion trips on vehicles that are for public transportation in the second quarter (Millar, 2008). That is an increase of 1. 5 million trips per day or 140 million more trips compared to last year during the same period (Millar, 2008). According to the testimony, a person whom uses public transportation will save $9,596 a year. Transit in general saves 4. 2 billion gallons of gas a year (Millar, 2008).
The problem is that there is a shortage of accessibility for public transportation and the demand is increasing so much, that in places where public transportation is offered, people have been turned away (Millar, 2008). So far, it seems that the high price of gas has hurt the economy because people have less money to buy luxuries like SUVs or even life necessities. On the brighter side, high gas prices help the environment because people seek cheaper, more efficient modes of transportation. Trying to save money where they can, people will car pool or use public transportation.
Using public transportation puts fewer emissions into the air. High gas prices have also saved lives. Since the day gas hit $3. 20 a gallon, the amount a deaths related to traffic fell by 22. 1% (The Associated Press, 2008). Traffic related deaths are at their lowest since the start of tracking them in 1961 (The Associated Press, 2008). A study shows the reason seems to be that people have changed how often they drive, decreasing traffic. People are also driving with more responsibility, like driving more slowly or at the speed limit, which increases gas efficiency (Associated Press, 2008).
Barack Obama even mentioned keeping tires filled with air. High gas prices have had their toll on the American people. Seventy-four percent of people surveyed said they are driving less. This is not the only result of high gas prices, other parts of the economy are starting to feel the effects as well. According to a survey done by consumer Reports Research Center, 63% have cut spending on entertainment or dining out, and 53% have changed their vacation plans (What to do about gas prices, 2008). People are now saving less money and racking up debt.
Forty-five percent said they have put less money into savings and 17% say they have used credit cards to pay bills and get necessities (What to do about gas prices, 2008). Not many people are looking to the future positively. Nearly 90% believe that they will be facing financial hardships over the next six months because of higher gas prices (What to do about gas prices, 2008). Social Change in Business Employers have to be competitive in order to maintain a workforce. If one business offers better benefits, then the other company risks losing people who seek better working conditions.
Several local government agencies have already offered a program where one works only four days a week. The thought is that if there is one less day to commute to work, employees will spend less in gas. So far, the results show a 20% savings on commuting and employees get to have longer weekends (Gentile, 2008). The IRS (Internal Revenue Service) has a cap for mileage reimbursement and human resource managers are trying to get it raised. The cap is currently just above fifty cents a mile and some business do not think that is enough. Meanwhile the next best thing is Flextime.
Fifty-nine percent of employers now offer Flextime, which allows the employees to set their own hours (Flexible Schedules Get Boost from High Gas Prices, 2008). Telecommuting is another practice that has become popular, which allows the employee to work from home via internet (Flexible Schedules Get Boost from High Gas Prices, 2008). Telecommuting saves the employee and employer time and money. People are no longer late to work and employees do not have to commute to work, saving one gas. There are several other programs or solutions for high gas prices. Many employers are allowing employees to transfer to closer business locations.
Gift cards for gas are handed out for good work. Employers are giving advanced funds for travel reimbursement instead of post-travel reimbursement. Bicycles are given to those who are willing to give up their parking space, and employers try to hire employees who live nearby (Flexible Schedules Get Boost from High Gas Prices, 2008). Possible Future Social Change Right now, there is a debate in politics on whether to allow drilling in now banned coastal waters, the arctic preserve, and other government-protected lands or not. The Republican Party believes that drilling will decrease the cost of oil, in turn lowering the cost of gas.
The Democratic Party believes that the oil companies already have access to leased lands that are not currently being explored or drilled on for oil. Why should they be granted access to more lands if they are not using the ones that they already have? Studies give estimated figures that show there is enough oil to last the United States for more than a hundred plus years in lands owned by the United States that are not currently being explored, or drilled due to restrictions (Hoar, 2008). A recent poll shows 74% favor more drilling domestically (Hoar, 2008).
There have been new laws proposed in congress to allow drilling or fund green energy but none has made it through. Each political party sticks to its partisan views, and no progress is being made. The inability for Congress to come to a resolution makes the American people have a doubtful outlook for relief in the near future. Maybe some time soon we will have an energy policy that steers the United States towards energy independence. People now seem to look into the future and see a utopia where all our energy is produced through renewable resources like solar, geothermal, wind, hydroelectric, and bio-fuel.
According to the Energy Information Administration, only 7% of the nation’s energy was made through renewable resources in 2007, which is a percent lower than in 2006 (EIA, 2008). Nearly half of the renewable energy made is used in industry, mostly to make paper. The rest is used to make electricity (EIA, 2008). Although a small part of energy made is from renewable resources, the United States ranks second worldwide in producing green energy (EIA, 2008). The future use of green energy seems grim at best. The United States is in an energy crisis now with too much dependence on foreign powers to meet the United States’ demand for energy.
As of now, it is projected that the United States will only produce 12. 5% of its energy from renewable resources by 2030 (EIA, 2008). The demand for energy solutions are high but the cost to build plants that make renewable energy is equally high and the usually remote locations increase the cost of distribution (EIA, 2008). Recently in Northern Utah, there was a plan to put up a power plant that makes its energy through use of the wind. The idea was rejected because the windmills would be an eyesore for the people living nearby. Conclusion The high price of gas and oil has brought to the United States some negative and positive outcomes.
Some people nearly have to sell their children in order to drive their cars to work. The price of gas has harmed our nation’s economy. Given, there are other reasons why the economy is hurting but if people can barely fill their cars with gas, how can they purchase products that make the economy stronger. Capitalism cannot survive without the consumer base, and that base currently has little money. Although the price of gas hurts the average American, from an environmental point of view and an energy point of view, the high gas prices are useful. The oil demand has gone down because people are driving less.
When people drive less, the environment is a little better off because there is less carbon emission being exhausted into the atmosphere. Forget about the environment, with fewer cars on the road, fatalities caused by traffic congestion are the lowest they have been since 1961. Gas may cost more financially but the cost in human life is priceless. References Associated Press. (2008, August 25). High gas prices lead to big drop in traffic fatalities [News]. Charleston Daily Mail (Charleston, W. V. ), sec. News, p. D2. Retrieved September 3, 2008 Via ProQuest. Daggett, T. (2008, August 14).
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