The U.S. Energy Information Administration confirmed over a year ago that the US is the world’s biggest oil producer.
Yet, in 2019, we imported about 9.10 million barrels per day (MMb/d) of petroleum from nearly 90 countries. In the same year, we exported about 8.57 MMb/d of petroleum to about 190 countries and 4 U.S. territories.
It seems silly but it isn’t. It is necessary to continue to import oil… for as long as we are dependent on it. There are three important things we need to understand.
First, almost no one consumes oil directly. It must be refined into the fuels, feedstocks, materials and products that we use in our daily lives.
Second, where oil is produced versus where there is refining or manufacturing plants, or the location of the greatest consumer demand, affect its usefulness and therefore value.
Third, you need different kinds of oil to make different products. Despite the rapid increase in domestic oil output, significant portions of the oil that is being produced here may not be what is needed to make all of the products Americans use.
So we import. And that has economic, social, political, and environmental effects. None of which plays to our advantage.
Dependence on anyone for anything shifts power dynamics. When a country has something another country needs, the holder of the asset has more power to dictate the terms.
As U.S. strives to strengthen our position as the world’s greatest and strongest economic superpower, our dependence on oil is one of the hurdles we need to overcome.
That is why the US is tapping into alternative energy sources. We use oil to run vehicles and many other types of machines, produce energy, and produce heat. Solar energy can do all of those things.
Since 2008, U.S. installations have grown 35-fold to an estimated 62.5 gigawatts (GW) today. This is enough capacity to power the equivalent of 12 million average American homes. As of 2019, we have 128.58 million households.
Before you ask, yes, we mine silver and other metals necessary to produce more solar energy in the US.
So if you are looking into betting on something, bet on silver and other metals. That’s where the U.S. and the rest of the world is headed.