NCPA - National Center for Policy Analysis

Reducing Oil Dependency More Difficult than Commonly Thought

June 29, 2011

Since petroleum replaced whale oil as a main fuel source more than a century ago, chemical companies and refineries have found a startling range of uses for it, from asphalt to vanilla flavoring in ice cream to pills from the drugstore.  It has oozed into everyday life, so reducing dependency is a more complicated proposition than some might think, says the New York Times.

Take a typical barrel of oil.

  • About 46 percent of it is refined into gasoline, and another 40 percent or so is turned into jet and fuel oil.
  • Only about 2 percent becomes petrochemicals like polyethylene and benzene for everyday products (with the rest going to other uses).

Yet that 2 percent has a pervasive reach.  "Oil, no pun intended, seeps into just about everything in the economy," says David Garfield, a managing director at the consultancy AlixPartners.

  • When oil prices go up, companies reassess how they transport items, try to cut down on energy costs and look for alternatives to petroleum-based materials.
  • For example, some are replacing the hard-to-open plastic clamshell packaging that many consumers find so annoying.

But, says Michael Pishko, head of the department of chemical engineering at Texas A&M University, there are only a few alternatives to petroleum-based chemicals (one is natural gas as a base for polyethylene).  "Beyond that, it becomes very difficult to compete with petroleum, even petroleum at $100 a barrel," Dr. Pishko says.

Source: Stephanie Clifford, "Oil Oozed through Your Life," New York Times, June 25, 2011.

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