Domestic oil drilling - Good or bad energy option?

A not so long ago president Obama backed new drilling for oil and natural gas off parts of the US coastline. This support was supposedly a president's idea to decrease nation's energy dependence on foreign oil import but can this idea really work, and will U.S. really be less dependent on foreign oil with domestic offshore oil drilling?

Many energy experts agree that domestic offshore oil drilling is not only unwise energy option from environmental but also from economical point of view. Why? Because it is very likely that domestic oil will in the end cost even more than the foreign oil, and given the current economic times we live in there won't be many people that will be thrilled to support the idea of buying more expensive energy option just because it is domestic, heck if that was the case than we wouldn't see the cheap stuff from China everywhere we turn to.

Capital costs of these projects are projected to be very high, and U.S. still needs to test potential sites by making drilling tests and some other required tests and studies that of course don't come cheap either. And once domestic oil starts flowing you can be sure that these upfront costs will be included in final oil price making it more expensive compared to foreign fuel option.

How many of you would buy more expensive oil just because of its domestic origin? In today's economy patriotism doesn't pay off, and cheaper solutions are always the popular ones. In reality, the only thing that could make people buy more expensive domestic oil is some government regulation, and this definitely wouldn't go well with public.

Renewable energy is much better option, and instead of drilling for domestic oil U.S. should put more efforts to develop renewable energy technologies in order to make renewable energy projects more feasible. Yes, renewable energy option is still a rather expensive option but offshore oil drilling doesn't come cheap either. Therefore, renewable energy is definitely the better option, if not for anything else then because of its environmental benefits.

But U.S. still fails to realize this rather simple logic, and this is really the main reason why U.S. is currently well behind China in global clean energy race.

Global oil statistics

At the end of 2009, there were 1333.1 billion barrels of proved oil reserves (this number doesn't include Canadian oil sands) according to the BP's Statistical Review of World Energy.

Russia is currently the world's largest oil producer. In 2009, Russia produced in average 9.93 million barrels of oil per day for a total of 494.2 million tons, which is around 12% of world's total oil production.

According to the data from IEA China is currently the world's largest oil consumer. In 2009 China consumed 2.252 billion tons of oil equivalent, which is about 4% more than the U.S., which consumed 2.170 billion tons of oil equivalent. It is also expected that China’s oil demand will likely rise by more than 5% in 2010.

In 2009, China's oil consumption increased by 6.7 percent while US oil consumption declined by 4.9 percent (mostly because of recession).

According to the data from the US Energy Information Administration, approximately 4.1 billion barrels of oil are held in strategic reserves, of which 1.4 billion is government-controlled.

International Energy Agency (IEA) predicts that the global oil demand in 2010 would grow by 170,000 barrels a day to 86.5 million barrels, mostly because of developing countries which depend on oil to continue their economic growth.

Besides United States and China, the list of five largest oil consumers in the world also includes Japan, Russia and India.

Saudi Arabia is currently the world’s second largest crude oil producer behind Russia. It is estimated that Saudi Arabia currently produces around 8.5 million barrels of oil per day.

World crude oil demand grew an average of 1.76% per year from 1994 to 2006.

Transportation sector has the highest oil consumption rates, accounting to 55% of oil use worldwide, and for approximately 68.9% of the oil used in the United States.

Saudi Arabia's largest oil fields are now declining at a rate of around 8% per year. The average global rate of field decline is at about 4.5% per year.

In 2005, global oil production reached an all-time high of 73,720,000 barrels per day.

Oil had the largest price on June 30th, 2008 crossing over $143 a barrel.

Top five countries in oil reserves category are Saudi Arabia, Canada, Iran, Iraq, and United Arabian Emirates.