U.S. Oil Supply/Demand Conundrum

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"The U.S. consumes roughly 21M bpd but produces just 5M bpd."

It's a well-known fact the U.S. has imported oil since the 1970s because domestic production can't meet rising demand. According to the 2009 yearly average, U.S. oil consumption is around 21M barrels per day (bpd) and domestic production is only around 5 million. Why are things escalating so fast? Why are resources running out at such speed? There is no simple answer, but it all relates to one single concept—exponential growth.

Within the last two centuries, technological advances have made the world completely oil, gas and coal dependent. So, it's obvious the modern industry is completely dependent on oil.

Since the 1850s, the number of patents, technological inventions and scientific breakthroughs has been also increased exponentially—all of which are all pretty much based on electricity, fuel, plastic and oil-derived products. The following chart shows the amount of U.S.-granted patents since 1870.

U.S. Patents Granted

U.S. Oil Patents Granted

So, we have an exponential growth in population devices that rely on a finite resource to function. Even if new reserves are discovered and double the amount that we've already used, exponential demand means it will last only a few more years.

The current situation can't be sustained for much longer—60 or 70 years at the most. We now understand why. The question remaining is: What will happen to prevent the collapse in society that this would imply?

Stopping the population growth seems almost impossible, unless some big catastrophe happens. Let's hope that will not be the solution.

A more positive and possible solution is to stop relying so much on oil. Interesting advances have been made on renewable energy sources.

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