Lawrence Solomon
National Post
August 13, 2008

Oil imports are destroying the U.S., say a rising tide of alarmists in the U.S., chief among them T. Boone Pickens, the legendary oil man turned wind power developer. “It is a clear and growing threat to our national security, and our national economy,” he testified to the U.S. Senate. “It has to be stopped. We are on the verge of losing our Super Power status.”

(T. Boone Pickens. Photo by Larry W. Smith/Getty Images)

To hear it from Pickens, who is mounting a national ad campaign to promote his wind power investments, it’s even worse than that – the U.S. is aiding and abetting its enemies.

“We don’t buy all of our oil from our enemies. We do have some friends – Canada and a few others. But most of the money that the world pays for oil goes into the hands of countries that are not our reliable allies. And some of that money is used right back against us in the war on terror. And so, we are funding the people who are trying to wreak havoc on this country.”

Pickens is outrageously misleading. True, the U.S. does import most of its oil, but barely – only 56.5% of net U.S. oil needs are now met from exports according to the most recent figures from the U.S. Energy Information Administration, not the 70% that Pickens’ ads claim. Moreover, this “oil dependency,” as it’s called, is diminishing, not increasing, as Pickens claims, and precious little of it comes from countries that can be thought of as enemies of the U.S.

Neither is the U.S. dependent on any one country for an outsized amount of oil – the U.S. imports oil from some 69 nations, most of it from friends and allies and precious little from hostile states, including from newly hostile Russia, which meets less than 2% of U.S. needs.

America’s single largest supplier of oil is America, which meets almost half of its own needs. America’s single largest external supplier is Canada, which meets some 12% of U.S. needs. Add in Mexico, another large and reliable supplier of oil, and the U.S. meets about 62% of its needs from North American sources.

Add in other friendly countries in the Americas, such as Brazil, Columbia and Argentina, and the U.S. meets more than two-thirds of its needs from this hemisphere.

The U.S. imports oil from only one country in the Americas that can be considered hostile – Venezuela, which meets 6% of U.S. demand. To eliminate that 6% – and Russia’s 2%, too – the U.S. would only need to develop a fraction of its offshore oil resources.

Much is made of America’s dependence on the Middle East for its oil imports. In fact, the entire Persian Gulf meets only 12% of U.S. needs, and that 12% comes overwhelmingly from allies. Saudi Arabia, America’s largest supplier in the Gulf, meets 8% of U.S. needs and Iraq, the second largest supplier and a fast growing one, meets 3%. Kuwait, the country the U.S. rescued in the first Gulf War, is next, at just over 1%. America’s true enemies in the Gulf – Iran and Syria – account for virtually 0%.

Should America forsake trade with its friends and allies in the Gulf region? Or in Africa, where 16 countries – most of them very poor and small – are oil suppliers? Or in Asia, which all told meets less than 2% of U.S. needs? Or European suppliers such as Norway? Every country that sells the U.S. oil in return buys U.S. food, machinery and other U.S. exports.

America should not fear trade, and it should not feel trapped. Its oil suppliers are highly diverse, from around the world. Moreover, because high prices have transformed the economics of developing North American energy resources, the bulk of U.S. oil needs – now and into the foreseeable future – is likely to come from the continent. Canada, which is rapidly developing its tar sands, is soon expected to double its exports to the U.S., with another doubling to follow.

More to the point, with the U.S. public now overwhelmingly in favour of exploiting America’s vast on-and offshore resources, the U.S. is likely to ramp up its own production and – if it ever wanted to – could well displace all of its non-North American oil imports.

But why would it want to?