by Rene Pharisien

Created on: July 06, 2008   Last Updated: November 19, 2011

$60 oil is the equivalent of 1 American billionaire going bankrupt every day.

Even with a barrel of oil back down to $60, $1 billion leaves our country every day to buy oil from producing nations, every day, 365 days a year. That's $1 BILLION PER DAY; over $365 billion a year out of America. When oil returns to $150 a barrel, we will be shelling out $1 trillion a year out of America, to foreign oil countries. We can't afford that!

First, the facts on energy.

Today America consumes 21 million barrels of oil a day, roughly 25% of the world's consumption, even though we represent less than 5% of the world's population. 70% of the oil consumption goes to transportation, with 48% attributed to cars and pick-up trucks, 16% to heavy trucks, and 6% to airlines. The average American drives 12,500 miles and burns 500 gallons of gas a year. Because we only produce 6 million barrels a day, we must import 15 million, with 50% of the imports coming from the Middle East.

The 1974 oil crisis caused us to implement energy efficiency measures, with the average mpg doubling from 14 mpg to almost 28 mpg between 1975 and 1990. By 1990, with a daily consumption of 18 million barrels, and abundant cheap oil, we lost our focus and allowed our fuel efficiency to decline, to a low of 26 mpg by 2008. Had we maintained the same rate of improvement, today our cars would average 55 mpg; we would not need to import oil and may even have a surplus.

Supply and demand are not working. From 1990 to 2008, the price of a barrel of oil increased almost 15 times, from $10 to a peak of $147. And since 2000, while the demand for oil doubled, and supply kept up with demand, the price of oil managed to increase 7-fold from $20 to $147 a barrel! There were talks about shortages and dwindling supplies and "peak oil", but suspiciously no waiting lines at the gas stations. Oil prices are controlled by the oil "cartel", an organization that drives prices by limiting supply in a coordinated effort to maximize profits. In America it is illegal for competitors to join together in an attempt to manipulate prices, it is called "price fixing". But the oil cartel is above the law, and it is how they keep oil prices high.

The worldwide recession backfired on the cartel for the time being, as prices quickly cratered. They are scrambling to keep their member countries in line with reduced production quotas to limit supply, but they will be back.

In 1970, we produced enough energy to meet our own needs. How can we

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