The Potential of Coal to Reduce US Dependency on Imported Crude

Inexpensive crude oil contributes to the U.S. economic prosperity; however, the increasing reliance upon imported crude oil makes the United States vulnerable to oil supply disruptions and threatens the nation's economic and energy security. As evidenced by the 1973 Arab oil embargo and the 1979 Iranian revolution, abrupt and prolonged losses of crude oil from the Persian Gulf region drastically affect the U.S. economy, increase unemployment, and boost inflation [23]. Even shorter periods of spiking prices, such as that experienced during the 1990 Gulf War, resulted in a downturn in the U.S. economy. In 1979, President Carter called this situation "a clear and present danger to our national security" [23]. Since the 1970s, there has been much discussion about energy security and national security by the U.S. Congress and White House; however, the United States is more dependent upon foreign oil today than it was in the 1970s. In 1973, the United States imported about 34% of its crude oil [24]. Currently, the United States imports approximately 60% of the oil it uses [1], and it is estimated that this could increase to 75% by 2010 [24]. The current U.S. dependency on imported crude oil is illustrated in Figure 8-6, which shows the petroleum flow in the United States in 2002 [1].

Blending Components

FIGURE 8-6. Petroleum flow in the United States in 2002 in million barrels per day. (From EIA, Annual Energy Review 2002, Energy Information Administration, U.S. Department of Energy, Washington, D.C., October 2003.)

Blending Components

FIGURE 8-6. Petroleum flow in the United States in 2002 in million barrels per day. (From EIA, Annual Energy Review 2002, Energy Information Administration, U.S. Department of Energy, Washington, D.C., October 2003.)

The solution to achieving energy security in the United States does not involve isolationism or switching to importing crude oil only from non-Persian Gulf countries, even if either of these options could be realized. Taylor [25] points out that being energy independent, with respect to oil consumption, does not insulate oneself from a global crisis. The oil price spike of 1979 affected Great Britain, where all of the oil Great Britain consumed came from the North Sea, as much as it affected Japan, a country that imported all of its oil. The reason for this is the market for crude oil is global, not regional.

The United States is increasingly dependent on foreign crude oil and is very vulnerable to an oil supply disruption. Currently, four major producers provide over one-third of the U.S. oil supply: Canada, Mexico, Venezuela, and the Persian Gulf region (Bahrain, Iran, Iraq, Kuwait, Qatar, Saudi Arabia, and the United Arab Emirates) [26]; therefore, reducing the quantity of imported crude oil consumed in the United States is of utmost importance and is a crucial step to attain energy and economic security.

While the price of crude oil may be influenced by global events, the goal of reducing the total amount of imported crude oil should be pursued. Approximately two-thirds of the petroleum consumed in the United States is in the transportation sector, with another 25% being consumed in the industrial sector. Reducing the reliance of the transportation sector on oil is clearly a key to improving energy security. Options to lessen the dependency on imported crude oil include improving vehicle fuel efficiency and diversifying the feedstocks to produce transportation fuels, transportation fuel additives, and liquid fuels/feedstocks to the industrial sector. Feedstock diversification can be achieved by using biomass and coal. Utilizing biomass for producing biofuels and additives is important and should be pursued; however, coal can provide the greatest and quickest impact in reducing dependence on imported crude oil due to the vast coal resources and proven technological capability to produce liquid fuels from coal. Technologies exist to convert coal to liquid products, as discussed in Chapter 5 (Technologies for Coal Utilization) and Chapter 7 (Future Power Generation), with activities under way to further improve these processes. Gasification followed by Fischer-Tropsch synthesis is the leading processing candidate for producing the liquid fuels. The importance of coal to produce a variety of products, including transportation fuels, is evidenced by the direction of the DOE's research and development programs addressing future plants that produce power, fuels, and chemicals.

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