GOP presidential candidate Mitt Romney argues that the United States is an “energy-rich nation” that is “living like an energy-poor nation.” It’s a catchy turn of phrase, to be sure. And Romney’s point raises some interesting questions. How does the United States stack up against other developed nations in terms of fossil-fuel stores? How does our supply compare to our long-term need? Why are we paying so much for imported oil if we’re sitting on vast energy supplies?
In 2009, the Congressional Research Service produced a report analyzing the total fossil-fuel stores available to the United States compared with other countries. It concluded that the United States has an embarrassment of energy riches. In fact, when the analysts converted all of our oil, natural gas and coal reserves into barrel of oil equivalents, the United States edged out Russia as the world’s most-energy-rich nation. The United States has more than three times the fossil-fuel stores of Iran and Saudi Arabia, and more than seven times as much as Iraq, when expressed as barrel of oil equivalents.
The report, however, came with lots of caveats and catches: It’s very difficult to compare the reserves of different countries. There’s no standardized international inventory system. Even within the United States, several agencies are tasked with monitoring fossil-fuel stores. So the international comparison is a bit of an educated guess.
Second, and more important, more than 93 percent of the U.S. fossil-fuel supply is in the form of coal. We have so much coal, in fact, that we could continue our current consumption for 250 years before we would exhaust our known, economically extractable reserves. That’s good (sort of), but it’s a bit misleading to discuss the United States as the world energy champion based on our massive coal deposits.
Coal is, in many ways, the most challenging fossil fuel to extract. Natural gas and oil deposits can be tapped with a drill and often harvested from a single extraction point. Coal is a solid, so it has to be dug out short ton by short ton.
This can be an environmental disaster. Some companies have turned to mountaintop-removal mining, which involves blowing the top off a mountain to expose the coal underneath. It’s cost-effective, but critics say it can fill in streams, cause flooding and destroy wildlife habitats.
In addition, a fair amount of U.S. coal stores are directly beneath communities. Entire towns aren’t likely to pull up stakes for the sake of our energy needs. In some states, just 10 percent of the proved coal reserves could realistically be extracted.
As a practical matter, coal and oil simply aren’t interchangeable. Car manufacturers, for example, are still grappling with how to build an affordable and efficient electric car. There aren’t any electric tractor-trailers or passenger jets on the horizon. Coal isn’t going to satisfy all of our energy needs for a long time.
In some ways, that’s a good thing. Coal also contributes more to global climate change, in terms of carbon dioxide equivalents emitted per unit of energy produced, than any other fossil fuel.
Turning to our relatively puny oil reserves, there’s more bad news. The United States has 21.3 billion barrels of proved reserves of oil, according to the CRS report, a little more than eight years’ worth of consumption. “Proved reserves” means stores that are known to exist and can be extracted for less than their value on the open market. It’s a constantly shifting number, because a rise in the market price of oil can make previously uneconomic reserves suddenly worth pursuing.
Changes in extraction technology can have the same effect, as has been the case with the drilling technique known as fracking, which has increased U.S. natural gas reserves by 63 percent since 2000. (Unfortunately, the process raises many environmental concerns, such as contamination of groundwater.)
It’s important to understand that not all proved reserves are created the same. Just because the high price of oil has made offshore drilling and Canada’s oil sands worth exploiting doesn’t mean that U.S. reserves are in the same category as the easier-to-get oil in Iran, Kuwait and Saudi Arabia. Those countries enjoy a market advantage because of the nature of their deposits. Simply adding up total reserves hides these differences.
So, considered as a whole, just how energy-rich is the United States? Since a hard number is bound to be misleading, all that can be said is that we’re kind of middle-of-the-pack among industrialized nations. We’re lucky not to be in the position of Japan: basically without fossil fuels and facing an uncertain nuclear future. But we’re far behind Norway, Canada and even Australia in energy wealth. It’s probably most fair to say we’re “energy middle class.”’