SLIDE 41 The Caliber of Your Choice
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US is world’s largest oil consumer (25%)
About 11 million barrels of oil (and imported refined oil products) per day Nearly $1 Billon per day is spent on imported oil Net imports of 51%
Oil Prices Increasing, and Will Likely Continue
Rapidly growing demand in India, China and other developing nations Oil production flat or dropping due to government mismanagement and internal conflicts in nations such as Mexico, Venezuela, Nigeria, Iran and Iraq Worldwide refining capacity at ~97%
Near-term Demand Inelasticity / Few Substitutes
Most current and planned platforms use petroleum (94%; 3% use NG, 3% use biofuels) $10/barrel increase in oil increases DoD costs by roughly $1.4B per year (DOD represents 1-2% of US oil consumption
U.S. Consumption Drivers
Transportation (99% of oil is used in this sector); Electrical, Heating, Petrochemical (1%)
DoD consumption drivers:
Jet fuel/marine diesel – 71% (mobility fuel = 74% of total energy use) Electricity – 11% In 2010, the USAF spent $6.7 billion on fuel and $1.2 billion on infrastructure energy
Energy Security