Taking an Honest Look at America’s Relationship With Oil and Gas

Richness in natural resources has undeniably been an essential component to the success of the United States. In our short history, the USA has been both reliant on other nations for oil and is also one of the world’s most prominent oil-producing countries.

The rise of the automobile, petroleum-based plastics, air transportation and many other industries that we now view as essential aspects of normal life has formed an indelible bond between our country and fossil fuels. For us to continue to enjoy the benefits of oil, our test in the years to come will be to redefine our relationship with this essential element in a way that satisfies our needs but is also sustainable.

The Early Days

During the 1840s and ‘50s, Americans living in desert regions would collect oil that seeped to the surface and distill it. The resulting product was used as a lubricant and also to fuel fires. In 1859, Colonel Edward L. Drake drilled the first oil well in the United States in Titusville, Pennsylvania. It wasn’t long before investment from the Rockefeller family catapulted the oil industry into profit and the public eye.

As oil giants like Standard Oil and Pacific Coast Oil navigated the antitrust laws of the early 20th century, advances in technology allowed for more efficient refinement. This increased production, helping American oil satisfy the increase in demand brought on by World War I and the new automotive industry.

Technology for oil extraction and refinement would continue to advance. Leaded gasoline and the use of catalysts allowed for cleaner-burning, more potent fuel. Offshore drilling was expanding by the 1930s, and by the end of World War II, the United States handily controlled the majority of the world’s oil production.

Victory Culture and Luxury Products

With the war over, American fuel rationing could end. The number of cars on American roads nearly doubled from 26 million to 40 million in five years. Suddenly, everyday use of petroleum-based products like cosmetics, face creams and crayons made from paraffin wax become a regular part of American life.

Plastics become prominent, appearing as upgraded trim on American cars. Today, up to 5 percent of oil production in the states is devoted to making plastics. During the late 1950s and ‘60s, synthetic fabrics like polyester were introduced, and Styrofoam became a new alternative for packaging and insulation. In terms of oil extraction technology, however, we were still only just getting started.

OPEC and the U.S. Import Quota

Throughout the 1950s and ‘60s, America implemented strict regulations to keep the price of native oil high under President Dwight Eisenhower. The plan works, and despite a saturated global market, American oil prices stayed 60-70 percent higher than the Middle Eastern equivalent.

On Sept. 14, 1960, the first meeting of the Organization of Petroleum Exporting Nations (OPEC) is held following the Bagdad conference. The goal of OPEC is to wrest back control of oil exports that are being run by the Seven Sisters, a group of multinational oil companies with strong ties to the west.

In 1967, the Six-Day War inspired American oil production to ramp up again. When the conflict is short-lived, the global oil market is flooded, bringing prices down and resolving any potential oil crisis.

The Oil Crisis of 1973 and the Iran-Iraq War

Seven years after the Six-Day War, another conflict broke out close to the Jewish holy day Yom Kippur. The United States sent billions in military aid to Israel, and in retaliation Arab nations placed an embargo on oil shipments to the USA. Supplies stay low into 1974, after which the American government unveils a new set of policies designed to promote energy independence.

Relations with oil-producing nations would continue to be strained into the late 1970s and early ‘80s. Oil prices again go on the rise, but with the advent of the Iran-Iraq war in 1980, the USA under the Carter administration seizes the chance to improve the tone of foreign relations in Bagdad.

In response to the dire situation exposed by the Iran-Iraq conflict, offshore drilling on the coast of California and other locations is revisited. New finds in the Gulf of Mexico and off the coast of Alaska reassert the importance of oil platforms for American production and contribute 8 percent of U.S. oil producing during 1981. By the mid-1980s, U.S. production is on the rise.

The Persian Gulf and Energy Diversification

Following Iraq’s invasion of Kuwait in August of 1990, the United States once again found itself in a war with implications on oil and gas prices. The Bush administration uses the country’s strategic oil reserve to stave off a crisis. However, prices actually dip below where they were previous to the conflict.

A new era of energy awareness follows the Persian Gulf, as science seeks to unlock the secrets of alternative energy sources so America will no longer be dependent on the Middle East for oil.

America’s love affair with the SUV only exacerbated the issue, with gas-guzzling trucks driving home the rising costs of gasoline.

In the early 2000s, American oil demand reached a new record high at nearly 21 million barrels per day. At the same time, the Kyoto protocol — a global agreement to reduce emissions passed in 1997 — loomed over global oil usage and motivated petroleum-dependent industries to seek alternative fuels.

The Modern Era

Today, a person living in a developed country uses an average of 14 barrels of oil per year. New extraction methods have allowed America to once again become a top world producer, making fuel prices acceptable despite the growing number of cars on the road, but there are still a great many industries that use oil in addition to transportation.

More of the world uses oil in excess than ever before, and we must be responsible enough to accept that new avenues should be explored. Electrical power, hydrogen and solar energy are all emerging as viable sources of alternative energy for cars, buildings and other things we take for granted thanks to oil.

To think that oil usage will go away, ever, is far-fetched. It certainly won’t happen during our lifetime.

We should have a serious conversation about which uses for oil will need to continue on when alternative fuels are more developed. By learning how our lives will change as oil becomes more commoditized, we can help inform the way petroleum companies create better products and distribute them intelligently.