Could Trump Deliver U.S. Energy Independence?

Breaking Story (3/13/18): The Financial Times has a story which mirrors the major points of our following blog article -- Go Here.

"We will become and stay totally independent of any need to import energy from the OPEC cartel" -- Donald Trump.

Key Background Points for Today's Blog: In discussing U.S. foreign oil dependency, two measures are used: Gross Imports % -- Total Imports/Total Petroleum Used. Net Imports % -- (Imports minus Exports)/Total Petroleum Used.

What does Energy Independence even mean? In a context of U.S. foreign energy independence, it is oil and only oil that's relevant.

Oil remains the dominant fuel used in the U.S., accounting for ~37% of total energy consumption in 2015. Oil is consumed mostly within the transportation sector, with very little used for electricity generation (~1%).

Metrics Used: Almost always when U.S. foreign oil dependency is discussed in the Media, it will be net imports that is being referenced. Inferring this metric, the EIA states "In 2015, about 24% of the petroleum used by the United States was imported from foreign countries -- the lowest level since 1970".

(Note: EIA data available on-line only goes back to 1973)

But only citing net imports does't tell a whole story. Of the total petroleum used in the U.S. in 2015:

A whopping 49% came from foreign countries (gross imports)¹;

25% was exported (mostly as refined products, e.g. gasoline & diesel);

Resulting in net imports of 24% (49% minus 25%).

⁽¹⁾ About 78% of gross petroleum imports is crude oil. In 2015, the U.S. consumed about 19.4 million barrels per day; imported
~9.4 MMb/d ; exported ~4.8 MMb/d; with resulting net imports of 4.6 MMb/d.

In using Net Imports as the most commonly cited metric, an assumption is thus inferred that Exports must reduce the foreign dependency of Gross Imports. Today, we will explore whether this is an appropriate assumption.

Gross Versus Net: The significance between gross versus net imports is a relatively recent development. For decades prior to the current boom in domestic oil production, yearly U.S. exports were very constant at ~5% of total petroleum used. However, during the past 9 years (breakthroughs in fracking, horizontal drilling), two things have dramatically changed:

1. Field production of oil/other petroleum liquids has more than doubled.²
2. Petroleum exports have increased by 5 times.³
⁽²⁾ From 5.5 million barrels per day (2006) to 12.6 million bpd (Feb. 2016).
⁽³⁾ Primary U.S. petroleum exports are diesel, gasoline, and natural gas liquids.

Percentage of U.S. Petroleum Exports Thus, while it may be technically correct that U.S. dependence on foreign oil (using the metric of net imports) is at the lowest level in 45 years, the composition of this metric is very different today than in 1970.

	1970	2015	Change
Gross Imports:	29%	49%	+20%
Exports	05%	25%	+20%
Net Imports	24%	24%	zero

Looking at the above numbers, one might "conclude" that the U.S. is now just importing more crude, refining it, and then exporting the end-use products of this foreign oil (gasoline, diesel) -- with a "net" of zero.

But the Import/Export paradigm (model) just isn't this simple due to:

1. Configuration/Design of many U.S. Refineries to use heavy oil.
2. U.S. Refineries using financial arbitrage to gain competitive advantages in high value World Gasoline/Diesel Markets.

Foreign Sources of Oil: This metric can also be misleading. While it is emphasized that Canada is the "single" largest foreign country supplier to the U.S. (2.81 million bpd) -- OPEC countries import a comparable amount of oil (2.65 million bpd).⁴

U.S. Petroleum Imports
(2015) Understanding Some Oil Basics: In long-term forecasts through 2040, the EIA projects that U.S. dependency on imported oil (net imports) will continue at an ~25% level.

Historical and Projections of U.S.
Oil Production & Consumption:

So with the U.S. oil boom, why are we still importing so much foreign oil? The answer is found in the fact that not all crude oil is the same. It can have a density ranging from heavy to light, sour (high sulfur content) or sweet; priced internationally (Brent) or priced domestically (West Texas Intermediate).

Type of Oil: In 2015, ~90% of imported crude oil was heavier, with a gravity below 35 degrees API. At the same time, more than 70% of the crude oil produced in the Lower 48 states was light oil or condensate with an API gravity above 35 degrees.

As the below chart illustrates, as U.S. production of light & medium crude has increased, U.S. refineries have reduced their imports of lighter oils.

However, note that imports of foreign heavy crudes have increased.

U.S. Oil Imports by Type The market value of a crude stream reflects its density and sulfur content. Crude oils that are light and sweet (low sulfur content) are priced higher than heavy, sour crudes.

This is because products like gasoline which sell at a significant premium to other products (e.g., residual fuel oil) can be more easily and cheaply produced using lighter, sweeter crude oil in simpler refineries.⁵

Note how close Brent and WTI are in characteristics.

Pricing Benchmarks for Oil: West Texas Intermediate (WTI) is a benchmark at which oils produced in the U.S. trade. Internationally, about two-thirds of all crude contracts reference a Brent benchmark. For various reasons, internationally priced oil (Brent) has traded at a premium to domestic priced crudes (WTI) for the past decade⁶.

Stated another way, domestic U.S. oil has been trading at a discount from Internationally priced Brent Oil.

Spread Between Brent Versus WTI ⁶ Historically, some reasons have included the U.S. export ban on most crudes resulting from the Arab Oil Embargo in the 1970's; excess domestic production and storage.

What the Heck Is Going On? With the exceptional increase in U.S. oil production from tight shale formations/fracking (e.g., North Dakota, Texas, etc.) there is good and bad news:

1. Most of this oil is high quality light crude, relatively easy to refine in refineries that are not terribly complex.
2. However, many U.S. refineries can not use this lighter oil.

Design of U.S. Refineries: Prior to the shale boom, many U.S. Refiners guessed wrong in their planning. They spent billions of dollars to configure plants for heavier and sour foreign oils (the type from Canada and OPEC countries). For example, a high percentage of refineries (especially the Gulf Coast) have coking capacity that can upgrade heavy crude oil into higher-valued lighter products.⁷

⁽⁷⁾ As of January 1, 2014, there were 133 operating refineries with atmospheric crude oil distillation units (ACDU) totaling capacity of 18.9 million barrels per stream day. Heavy capacity denotes refineries with coking capacity; light capacity denotes refineries without coking capacity..

As a result of this infrastructure investment, the U.S. now has more complex Refineries than anywhere else in the world -- as shown in the below graphic which includes the Nelson Complexity Index:

Understanding the U.S. regional (called PADDs) composition of refineries ranging from simpler to complex (catalytic crackers, reformers, cokers) help explain the type of oils primarily used within each region.^8
(8) Recognizing that higher and lower API oils are always blended for specific Refineries to optimize production.

For example, Refineries in PADD 1 (East Coast) are generally not terribly complex and thus will use more lighter oils. In PADD 3 (Gulf Coast), 81% of Refineries have coking capacity -- explaining their use of more heavier oils.

	U.S. Oil Field Production	Primary Source & Type of Crude Used in Refineries9
PADD 1	01%	Domestic Light
PADD 2	20%	Canada Heavy
PADD 3	60%	Heavier Foreign
PADD 4	08%	Canada Heavy & U.S. Light
PADD 5	11%	50% Foreign Heavy
Total	100%

The overwhelming majority of Canadian oil goes to PADD 2. Most of the Middle East imports are received in PADD 3 (e.g., Saudi Arabia owned Motiva Refineries). Heavy crude imports from Mexico and Venezuela also primarily go to PADD 3 (e.g., Venezuela's CITGO Refineries). The majority of African oil is consumed in PADD 1.
⁽⁹⁾ U.S. Department of Energy Report, pages 15, 26.

Arbitrage: But historically, there's been more to understanding U.S. imports and exports other than just Refinery configuration -- something called arbitrage.

Oil Arbitrage: The practice of U.S. Refineries buying lower cost U.S. light oil (pegged to WTI), refining it, and exporting/selling gasoline to World markets that mostly used higher cost oil (pegged to Brent).

Gasoline is an international commodity. A U.S. refiner could as easily sell their product to the international market if that would maximize their profit. According to the U.S. Department of Energy study, "Brent crude oil prices are more important than WTI crude oil prices as a determinant of U.S. gasoline prices".¹⁰

Thus, U.S. Refineries have had two highly significant market advantages in selling high-end products to both the U.S. and World markets (gasoline to Mexico & South America; diesel to Europe):

1. Financial Arbitrage on lighter oils.
2. Ability to use lower cost heavier crudes in complex Refineries.

The impact of these structural advantages are reflected in the below graphic -- where U.S. Refineries can have a profit margin as much as $6/bbl over their international competitors:^10
(10) US refining flexibility sustains export opportunities, profitability.

Nobody Knows Just How Dependent the U.S. is on Foreign Oil?   As previously argued, using a dependency metric of Net Imports would be totally appropriate under a paradigm/model where crude is imported, refined, with the end-product (e.g., gasoline) of this foreign oil exported: But the Import/Export Paradigm isn't this simple as U.S. Refineries also:
(1) Process Domestic lighter crudes into gasoline and diesel fuel for export;
(2) Import heavier foreign crudes for Domestic consumption:

Additional Flows of U.S. Refineries' Imports/Exports Exporting gasoline produced from domestic light crude to China wouldn't
decrease U.S. foreign dependency on heavy crude imports from Saudi Arabia.

Thus in using Net Imports as a dependency metric, it would be important to know its composition. Remember, the basic tenent in using Net Imports is that somehow, Exports decrease U.S. Gross Imports dependency.^11
(11) Gross Imports of 49% minus Exports of 25% equals Net Imports of 24%.

Incredibly though, not even the Energy Information Administration (EIA) can answer this question:

"We cannot determine the exact amount of crude oil produced in the United States that is consumed, as refined products, in the U.S."

In using EIA data though, we can at least frame the "How Much" question of foreign oil dependency -- where of the total Petroleum Consumed, about 50/50 came from Imports and Domestic Production, with 25% Exported:

In using two fictional scenarios, U.S. Dependency on Foreign Petroleum Resources can be "framed" as somewhere between 32% and 65%:

Scenario 1: ALL domestic oil is consumed within the U.S.
Scenario 2: ALL imported oil is consumed within the U.S.

Petroleum in the U.S.:	Low Domestic Use of Imports	High Domestic Use of Imports
Total Processed	100%	100%
Exported	(25%)	(25%)
Consumed Only in U.S.	75%	75%
Produced & Used Only in U.S.	51%	26%
Imported & Used Only in U.S.	24%	49%
Foreign Dependency	32%	65%

Potential Actions: Regardless of what "metric" that one believes is appropriate -- Donald Trump is correct in elevating foreign oil dependence as an important issue in this Presidential election:

While the old GOP mantra of "Drill Baby Drill" and eliminating environmental regulations will assuredly be a Trump meme, will he show depth and breath on this issue? The following are some items that could be proposed:

Refinery Tax Credits: As discussed, a major cause of foreign oil dependency is the configuration of U.S. Refineries to use heavy oil. Without incentives, Refineries are not going to simply walk away from their sunk investment and spend money to reconfigure yet again to primarily light oils. Federal incentives could be an investment tax credit (similar to solar energy) and/or accelerated tax depreciation (e.g., a one year write-off).

Oil Production Tax Credit: Another Federal incentive could be a tax credit (similar to yearly credits given to wind and nuclear) for the domestic production (per barrel) of heavy crudes. The U.S. has vast undeveloped resources of heavy oil in the Alaska North Slope.

Repeal Jones Act on Oil Transportation ; Shipping between U.S. ports costs significantly more than international voyages. This is largely because of a ~100-year-old federal law (Jones Act) which requires domestic cargoes to travel on U.S.built, owned and crewed vessels. A qualifying U.S. tanker currently commands rates from 3 to 4 times more than a non U.S. tanker of the same size.^12,13

The Jones Act explains how importing oil from half way around the world (Middle East OPEC countries of Saudi Arabia, Iraq, etc.) can be cheaper than transporting oil via tanker from the U.S. Gulf Coast area to East and West Coast markets.

Tariffs on Imported Oil: While very much of a long-shot, an oil tariff could get political support from two unlikely bedfellows: the domestic oil industry and the renewable energy industry. The domestic oil industry would love a tariff because it protects the industry from the competition of cheaper OPEC oil imports. Saudi Arabia's current price suppression strategy specifically targets the high-cost hydraulic fracturing or fracking in deep shale deposits that has been largely responsible for the rise in U.S. oil production.

The renewable energy industry might well join the oil industry in supporting such a tariff because a high oil price makes alternatives to oil more attractive.¹⁴

Final Thoughts: When Foreign Oil Dependency is discussed, a metric stated in percentages can lose some of its impact as to a "big picture". The below graphic puts foreign oil dependency in a clearer perspective of dollars. Even using "Net Imports", the trade impact is a whopping deficit/negative $123 billion per year ($246.5 less 62.7 less 60.7).

The Significance of Oil Imports on the U.S. Trade Balance: A recent AP story further illustrates this point as the U.S. Trade Deficit hit a 10 month high ($45 billion) from a big rise in imports of oil and Chinese-made computers, cell phones and clothing.

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Additional Resources:
US refining flexibility sustains export opportunities, profitability (excellent)
Why are U.S. Oil Imports increasing in 2017?
Gas Glut in U.S. and Europe -- Bloomberg
Is Russia Influencing Trump’s Thoughts on Energy? (Texas Monthly)
Summary: Effects of Removing Restrictions on U.S. Crude Oil Exports
The myth of US self-sufficiency in crude oil -- Energy Matters Blog.
Who is Buying U.S. Crude Oil? (Bloomberg)
1st quarter 2016 Refiner Profits Decrease
Oil Rich Venezuela Imports U.S. Crude Oil
IEA warns of ever-growing reliance on Middle Eastern oil supplies
When U.S. President Eisenhauer Restricted Imported Oil
Trump is Wrong on Trade Agreements (Wall St. Journal)

Energy Information Agency (EIA) Analysis:
Effects of Removing Restrictions on U.S. Crude Oil Exports
U.S. Crude Oil Production Forecast Analysis of Crude Types
What Drives U.S. Gasoline Prices
U.S. Crude Oil Production to 2025: Updated Projection of Crude Types

Energy Information Agency Data:

The Untold Story on U.S. Foreign Oil Dependency.

Background Points for Today's Blog: (1) In discussing U.S. foreign oil dependency, two measures are used: Gross Imports % -- Total Imports/Total Petroleum Used. Net Imports % -- (Imports minus Exports)/Total Petroleum Used. (2) Under laws imposed after the Arab oil embargo of the 1970s, U.S. companies can export refined fuel such as gasoline and diesel but not crude oil itself.

Typically when U.S. foreign oil dependency is being discussed in the Media, it will be the net imports number that is cited. Using this benchmark, the EIA states "In 2012, about 40% of the petroleum used by the United States was imported from foreign countries -- the lowest level since 1991". For 2013 (using non-finalized data from the EIA), estimated net imports were 33% -- the lowest level since 1986.

Of the total petroleum used in 2013, an estimated 52% came from foreign countries (gross imports); 19% was exported (in refined products such as gasoline); with resulting net imports of 33% (52% minus 19%).

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¹ The above 2013 values are not official. In 2012 per the EIA, about 57% of the crude oil processed in U.S. refineries was imported.

Historical Perspective: The significance between gross versus net imports is a relatively recent development. For decades prior to the current boom in domestic oil production, yearly U.S. petroleum exports were very constant at approximately 5% of total supply. However, during the past 7 years, two things have dramatically changed:

U.S. field production of oil and other petroleum liquids has more than doubled from 5.5 million bpd (2006) to 11.3 million bpd (April 2014).

Petroleum exports (e.g., refined products of gasoline, diesel) have increased almost 400%.

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bpd -- barrels per day.

Percentage of U.S. Petroleum Exports

Thus, while it may be technically correct that U.S. dependence on foreign oil (defined using the benchmark of net imports) is at the lowest level in almost 30 years, the composition of this benchmark measure is very different between 2013 and 1986. Using a gross imports benchmark, the U.S. is much more dependent today on foreign oil.

	1986	2013	Change
Gross Imports:	38%	52%	+14%
Exports	05%	19%	+14%
Net Imports	33%	33%	-

In a world where all oil was the same (type and price), use of net imports would be totally appropriate. After all, this would be an example of American refining technology ingenuity where we import oil, refine and then export it into world markets better (lower costs) than anybody else. However, this isn't what's happening. Not all oil is the same type (light versus heavy crude) or priced the same (U.S. versus World oil prices).

Understanding Some Oil Basics 101: In long-term forecasts through 2040, the Department of Energy projects that U.S. dependency on imported oil (net imports) will stubbornly be above +30%.

Historical and Projections of U.S.
Oil Production & Consumption: So with the U.S. oil boom, why are we importing so much foreign oil? The answer is found in the fact that not all crude oil is created the same. It can be heavy or light, sour (high sulfur content) or sweet.

With the exceptional increase in U.S. oil production from tight shale formations/fracking (e.g., North Dakota, Texas, etc.) there is good and bad news. Most of this oil is high quality light crude, relatively easy to refine in refineries that are not terribly complex. The bad news is many U.S. refineries (especially on the West Coast and Atlantic Seaboard) can not use this lighter oil. Prior to the shale boom, U.S. refiners spent billions of dollars to configure their plants for heavier and sour foreign oils (from Canada and OPEC countries of Venezuela, Saudi Arabia, and Iraq).

The below chart from the EIA illustrates this above point. While U.S. imports of light crudes have been reduced dramatically in recent years (displaced by new oil production from North Dakota, Texas, etc.), imports of heavy crudes have remained constant.

Digging Deeper into the Data: Contradictory to what is reported in the Media, OPEC (not Canada) remains the largest oil importer to the U.S. While statements that Canada is the largest crude oil importer is not a "pants on fire" misrepresentation -- it is "Spin Doctors" at work. Although it is again technically correct that Canada is the largest single country importer, this fails to recognize that OPEC (comprised of 12 countries) is a cartel and operates as a single entity.

U.S. Petroleum Imports (2013)OPEC is the largest Importer to the U.S.

U.S. Petroleum Exports (2013)U.S. is becoming the Oil Refiner for the World.

In addition to gasoline exports, a major growth market for U.S. refiners is diesel fuel (especially Europe and South America). A large number of European refining plants have closed, as they can not compete with U.S. produced diesel.

U.S. Petroleum Exports: As discussed in prior blogs, a major reason in the unprecedented surge in U.S. petroleum exports is the price difference between U.S. and Internationally traded crude oil.

Current Oil Prices:
U.S. (WTI) Versus International (Brent)

During the current U.S. oil boom, the benchmark price for domestic oil (West Texas Intermediate -- WTI) has been below the international benchmark for crude (Brent). As a result, many U.S. refineries have been using lower cost WTI priced oil, refining it (e.g., gasoline, diesel), and then pricing the refined products into international markets (where competing foreign refiners must pay the higher cost Brent price for crude oil).

Since it is legal for refined oil products to be exported, a refiner's access to lower cost domestic oil does not necessarily translate to cheaper gas for the U.S. driver and consumer. A U.S. refiner could as easily sell their product to the international market if that would maximize their profit. This explains why even with dramatic increases in domestic crude oil production (especially in the last 3 years), U.S. gasoline prices have basically remained unchanged.

Yearly Average of U.S. Gas Prices Putting the Pieces Parts Together: While Politicians and Talking Heads make environmental issues (e.g., Keystone Pipeline, Global Warming, ethanol use²) the center of the U.S. Oil Policy debate -- here is what's really going on:

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² As this Blog continues to point out, the current blending of ~10% ethanol in gasoline achieves well established health science benefits (lead removal, oxygenate for cleaner air).

Drivers Of U.S. "Net Imports" Oil Dependence
Note: Notice that there are no major oil pipelines to the West Coast or Atlantic Seaboard.

Foreign Oil Imports: Using 20/20 hindsight, the crystal ball of many U.S. refiners (on the West Coast and Atlantic Seaboard) was not very good. They did not foresee the magnitude of the current domestic oil boom coming -- investing billions to configure their refineries to use foreign heavy oil. These refineries are simply not going to walk away from this capital investment and re-configure their plants yet again to use domestic light crude in making gasoline.

Refined Products Exports: Many U.S. Refiners (along the Gulf Coast) use lower cost domestic oil (WTI), but price their products (gasoline, diesel) into an international gasoline and diesel market based heavily on more expensive Brent. The cheaper WTI becomes in relation to Brent, U.S. refiners make more profits and increase world market share.

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Related News Stories:
U.S. Oil Boom Drives Gasoline & Diesel Exports -- (Fox Business News).
Impact of Lifting Ban on U.S. Crude Oil Exports -- (Wall St. Journal).
World Refinery Margins -- (BP Energy Outlook).
Technical Chemical Engineering Discussion: Why U.S. Gasoline Refiners use so much Imported Heavy Oil
Where the U.S. got its oil in 2015 -- (Fortune Magazine, Robert Rapier).

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Outrage!!! (over less than a penny a gallon?)

In the continuing Red State versus Blue State Ideology Battles, yet another "flashpoint" has erupted over President Obama's proposal to eliminate $4 billion annually in tax deductions for oil companies. From the N.Y. Times, outrage why these tax benefits should continue given record earnings by Oil Companies. And from the Wall St. Journal, their outrage over even considering eliminating oil tax benefits.
After hours of debate and bills introduced in Congress and the countless hours of media "Talking Heads" vilifying either Obama or Corporations and Republicans as the Anti-Christ of Satan -- this topic must be pretty important -- Right?


While we are no fancy Ivy League Economist, we thought maybe we are smart enough to do some "simple math" (with the help of Google, of course). As we understand it, most of these tax benefits are allowable deductions to taxable income (like how us common folk claim a tax deduction for interest on our home loans).

According to the Wall St. Journal article, the effective tax rate for major Oil Companies in 2009 was about 25%. So the $4 billion in allowable expenses, reduced their tax bill about $1 billion (i.e., $4 billion times a 25% tax rate).

Using the wonderfulness of Google, we see that the U.S. uses about 140 billion gallons of gasoline every year. So, spreading $1 billion in taxes over the gas we use equals less than 1 cent per gallon ($1 billion divided by 140 billion gallons).

The toxic ideological talk coming from both Democrats and Republicans is just plain silly -- as keeping or eliminating the Oil Companies' tax benefits will not have any measurable change in gas prices.

Another example of how oil prices are used for political gain is how data is "cherry-picked" by members of Congress and the Media to serve one's ideology. Recently, we saw a graph on how oil prices have increased under the Obama administration -- with the objective to blame Obama's policies for high gas prices. The problem with this presentation was it was neither "fair nor balanced". The below chart is much better in objectively showing oil prices under three Administrations of Clinton, Bush (where record prices occurred), and Obama.

As we have repeatedly said over the years, our oil dependency problem is not a Red State versus Blue State issue, its an American problem that deserves much better effort than our elected members of Congress give us. America can not simply "Drill, Baby, Drill" our way out of this problem.

Core American Values and Oil Use

The N.Y. Times has an insightful story of how Renewable Energy and Energy Efficiency is gaining a solid foothold in Kansas, even through 52% of Kansans are highly skeptical on the science of Climate Change/Global Warming (and downright dislike Al Gore types and Big Government actions to regulate greenhouse gases). In America's very politically conservative Heartland, progress is apparently being made by addressing energy issues in terms of "Core American Values" like patriotism, ethics, saving money, spiritual convictions, economic development and job creation at local levels -- but just don't bring up the divisive subject of Global Warming.

In a N.Y. Times article on training returning Iraq and Afghanistan War Veterans to become farmers (which can include growing energy crops for biofuels like ethanol), we especially liked the quote of an ex-Marine: "It's a national security issue. The more responsibly we use water and energy, the greater it is for our country."

The below chart reflects the top 5 importers of crude into the U.S., 9 years after we were attacked on 9/11. Clearly, historical and current events in Saudi Arabia, Venezuela, and Nigeria don't reflect America's "Core Values".
One place where "Core Values" should especially be discussed is in Florida. According to U.S. Department of Energy data, Florida uses ~41% of the total oil consumed in the mainland U.S. to generate electricity. This is no one-year fluke, but has been going on for decades in Florida.

So, the next time you fill up your tank with gas or especially in Florida, flip on a light switch -- just think about where your dollars are going.

Supporting Terrorism Isn't an American Core Value.	Oil dependence is among the most dangerous threats to U.S. national security. For years, senior military and intelligence officials have warned that too much of U.S. oil payments eventually trickle down to terrorists, who use it to buy the weapons used against our troops in Afghanistan and Iraq.

Bribery Isn't an American Core Value. Nigerian authorities recently made an out of court settlement on criminal bribery charges against Halliburton and former CEO Dick Cheney. The Settlement is the latest fallout of a U.S. federal court conviction of Halliburton and its subsidiary of a bribery scheme in Nigeria -- with a record $579 million fine.

Hurting our Economy Isn't an American Core Value.

Environmental Destruction Isn't an American Core Value. While the BP oil spill in the Gulf of Mexico made world headlines in 2010 -- this type of destruction has been going on in Nigeria for decades. Look at some of these pictures. The issue isn't about some liberal, latte sipping Treehuggers wanting to protect "Mother Earth" -- its about things like clean drinking water for innocent children.

Killing Christians an Isn't an American Core Value.
Especially at Christmas, news stories of Christians being murdered in the Middle East and Africa were horrifying. But this isn't anything new in places like oil rich Nigeria or Iraq. Americans and especially American Christians need to understand the Islamic law which governments in the Middle East impose -- where converting to Christianity or any Christian missionary conversion efforts are punishable by death (e.g., Saudi Arabia, Afghanistan)

Radical Religion Isn't an American Core Value. All Americans understand the tragedy when Religion is hijacked in the Middle East to achieve a political agenda. But what about when this occurs in the U.S.? In the current Green Dragon Campaign Environmentalism is being demonized as the work of Satan to a target audience of conservative Christians. But, you're not going to believe where a major source of funding is coming from to pay for this campaign -- its gulp, Exxon/Mobil.

A New Mind-set
In thinking and talking about Energy, Americans (and especially our politicians) need to have a new mind-set. We need to move away from the pure Red State/Blue State, Conservative versus Liberal Ideologies, and always include "Core Values" in a civil national discussion which includes all resources of energy from "Drill, Baby, Drill", Renewable Energy, Natural Gas, Nuclear, and Coal.

Oil Use for Electricity Generation in Florida

Today we are referencing data from the Department of Energy on oil use in the U.S. As the below charts show, about two-thirds of all electric utility generation from oil use occurs in two states -- Florida and Hawaii.

While Hawaii's oil dependence can be understood (e.g., natural resources, transportation limitations), Florida's dependence is both confusing and troublesome. Another way of stating this is that Florida's electric utilities use more oil to generate electricity than the total used in all other continental States.

U.S. Oil Use for Electric Utility Generation in 2008

U.S. Oil Use for Electric Utility Generation in 2009

Now, Florida's dependence on oil (from not exactly friendly places like Venezuela) for electricity generation is certainly no anomaly, as this occurrence has been going on for decades -- leading us to ask, what in the world are Florida's electric utilities and lawmakers thinking about?