INTRODUCTION

We hear much about a looming Energy threat, but is it for real? The answer is emphatically YES!!

This summary and the separate USA and World sections linked below will tell you WHY.

A cheap and reliable supply of energy is the life-blood of America's economy and the very basis of citizen living standards and national security. Energy especially underpins our transportation and our food supply sectors, as well as our homes, work places, medical facilities, police and national security operations. Yet, worryingly, America's per capita energy consumption increased during the 1990s in spite of a declining US manufacturing base and despite importing more manufactured goods than ever before (i.e. produced by other nations using their own energy). A rising population calls for more energy, not less.

For electricity, America can become self-sufficient since 89% is generated domestically from US-based coal (60%), nuclear (20%) and hydro-power (9%). However, excess reliance on natural gas (declining reserves and rising imports) and oil for electric generation, together with infrastructure and regulatory restraints, can undermine potential self-sufficiency.

But - transportation (auto, truck, aircraft, military), plastics and food energy demands are nearly 100% exclusively dependent on a predominance of oil, although USA-based oil reserves and production are declining - - causing a soaring dependence on foreign supply. Before 1950, including during World War II, America produced more oil than needed, even exporting to other nations. That comparative economic and national security advantage has disappeared.

Oil supply, therefore, represents America's main energy challenge into the future.

THE ENERGY CHALLENGE
IS MORE SO NOW THAN EVER BEFORE

The world oil market daily produces 76 million barrels.
The United States, with 5% of the world's population, daily consumes 20 million barrels - - or 26% of the world's total.
And, America consumes 3 times more oil than it produces.

This chart shows > U.S. oil consumption has climbed to a record high [black line on chart] to 7.3 billion barrels per year (20 million daily) U.S. oil production [red line on chart] has declined to a 50-year low (since 1950, when America had 139 million fewer citizens) to just 2 billion barrels per year (5.7 million daily), a 71% consumption-to-production gap. [inventory adjustments not shown] U.S. oil reserves are declining with 4-10 years remaining if feasible to use every known drop. requiring soaring imports from other nations (blue line on chart) - - while reserves of prime import sources decline. No alternatives appear close to filling much of the increasing gap. Additionally, U.S. natural gas production has flattened. Reserves are falling and imports are rising. [Note for 2003: With record trade deficits and declining manufacturing one would expect U.S. oil consumption to be steadily declining since more and more goods consumed in the U.S. are created with energy from other nations. But, consumption continues to rise.]

"The country is facing the most serious energy shortages since the 1970s.
Without a solution, the energy crisis will threaten prosperity and national security
and change the way Americans live."
U.S. Energy Secretary Spencer Abraham

While facing this Energy Challenge...

	America, already the world's largest international debtor, explodes international trade deficits to new records, and
	Domestic debt ratios of household, business and financial sectors soar to record highs, and
	Personal savings plunge to record lows.

 
The U.S. may be more vulnerable than ever.
Not a nice bequest to our young generation.

Citizens must be smarter than an ostrich about this ENERGY CHALLENGE because it will impact all of us. Above you read the summary page of this Energy Report. But, it's wise to know more than an ostrich, by scanning the 2 main sections of the report and their tell-all graphics: First read the USA ENERGY section, where 8 powerful energy trend pictures are worth a thousand words, helping you understand the big picture regarding the U.S. energy challenge. And then read its link to the WORLD ENERGY section, where 5 tell-all graphics help you understand the bigger, world energy picture. IF you have read these 2 sections, then you may wish to refer to the Table of Contents page for index to sub sections, graphics list, valuable reference links and about the authors.

The authors of the Grandfather Economic Energy Report, a chapter of the Grandfather Economic Report series, are Michael Hodges (USA) and Jean Laherrère (FRANCE).
Jean Laherrère (email), a retired French oil and gas explorer and geologist-geophysicist, has published extensively regarding international energy resource and depletion research. Michael Hodges (email), educated in physics and a retired business executive, has developed extensive research regarding long-term economic & education trends in America as author of the Grandfather Economic Report series. The authors have concerns regarding freedom and economic conditions facing the generation of their children and grandchildren.

This Energy Report is a chapter of The Grandfather Economic Report, a series of picture reports showing threats to the economic future of families and their children, compared to prior generations - -on: family income, debt-dependence, savings, government spending and size, trust funds, education quality, social security, regulations, taxes, inflation, productivity, foreign trade and exchange, voter turnout, trust, celebration, national security, energy, and health care/life expectancy. It's a free, public service to enhance knowledge. You are now at the brief chapter on Energy supply, a significant threat facing our young generation. Welcome. We hope your visit will find useful information. Knowledge is Power, if you have it based on hard data..

The Grandfather Economic Report series is the intellectual property of its author; all rights reserved under Copyright Conventions. Permission to redistribute all or part of this series for non commercial purposes is granted by the author, provided the associated web page address is included and full credit given to the Grandfather Economic Report and the author, Michael Hodges. Notice appreciated via email.

© 2004 Michael W. Hodges & Jean Laherrère
Financial Sense Archives for Mr. Hodges

 Web note: The above editorial is a recent summary of an updated chapter from Michael Hodges series,
Grandfather Economic Report. Read the full article on G.E.R.

Michael W. Hodges
Grandfather Economic Report
Email Mr. Hodges