Hello, I'm Dr. 
Sam Shelton, we're continuing here with 
Energy 101 and today we're going to talk 
about a topic that is in the press a lot. 
It particularly gets in the press in the 
political season, but energy 
independence. 
Energy independence has been discussed. 
And every president since President Nixon 
in the US has declared that they want to 
make the US energy independent, energy 
independent. 
and, unfortunately, by all, almost any 
way you want to measure it. 
We haven't made any signifigant headway 
in that direction. 
Even though it's stated to be a high 
priority. 
So what do we mean by energy 
independence. 
What is it? That's one of the, one of the 
big problems is you can define it in many 
ways, is energy independence just crude 
oil. 
We consider only crude oil and look at 
what percent of our crude oil we import, 
or do we assume oil and natural gas 
liquids, as we talked about last time, 
which are classified as petroleum. 
Do we talk about Petroleum as a whole? 
And, add, by adding oil and natural gas 
liquids together, and look at what 
percent of those quantities do we import. 
Or in some cases people have even shown 
numbers adding and making equivalent oil, 
Petroleum. 
Gas, natural gas and coal. 
so there's alot of ways you can assume 
it. 
this, the definition of independence and 
dependence so we'll look at some of those 
today, but, this is part 1 of, of a 2 
part, section I'll do on energy 
independence. 
And what does it mean and, and what do we 
have to do to get there? so first we, 
let's look at them individually so we 
won't get, get buried in the weeds 
through so quickly. 
Let's look at the individual different 
fuels because all fuels are not created 
equal. 
it looks, starting at the At the bottom. 
If you look at crude oil. 
This is a bar chart. 
And the first along the X axis. 
These are horizontal bars. 
And the bar is the length indicates the 
energy that we get from each of those 
fuels. 
Crude oil is on the bottom, and. 
What we see that we get we use that much 
energy, which is about 35 giga BTUs, or a 
quad, sometimes it called. 
what we mean by giga is 10 ^ 15. 
10^15 BTU's is 1 Giga BTU or quad, 
sometimes it's called. 
But we use 35 giga BTU's in a year. 
This was for 2011. 
And the red part shows what percent of 
that is imported, and the blue part what 
we produce. 
And so, you can see that we import in, 
more than we produce just plain crude 
oil, and let's get our terminology 
straight here. 
Crude oil is the same as oil, and 
sometimes but I like to add crude to it 
when I can, to specify that we are really 
talking about oil as it comes out of the 
ground. 
And Versus oil, that's motor oil for 
lubrication and some of those other, 
other uses for oil by itself that is, if 
we refer to as oil, even though we 
refined it. 
let's move up one then, look at natural 
gas. 
As we've looked at these fuels before We 
saw that most of the natural gas we 
produce, we only import about 15% and 
that's shown as about 25 giga BTU's total 
and about 15% of that we import and we 
noted before that most of that import 
right there Comes from Canada. 
And we feel a little more comfortable 
about importing from Can-, Canada, from a 
security viewpoint. 
But, it still has an economic impact. 
That's money that's flowing out of this 
country. 
That, if it were in this country, it 
could create jobs and create 
infrastructure. 
And create. 
a lot, add a lot to our economy. 
but we, our total use as we saw before 
for natural gas in energy units is less 
than oil. 
it's down about 25. 
Next, we talked about Natural gas 
liquids. 
And natural gas liquids, remember, are 
the liquids that can be separated from 
the natural gas, by pressurize them, the 
gas, and liquiefy em, such as propane and 
butane. 
So the natural gas liquids, are down 
around four. 
Quad of giga BTU's. 
Or 4 quads. 
And essentially, all of that, we produce 
ourselves. 
We import a negative amount. 
There is a sliver of red right here, if 
you look at it very closely. 
And then we have coal. 
Coal is the only fuel that any. 
Significant quantity at all we export. 
And here the, the red part of the bar is 
over on the left hand side and is a 
negative number, so rather than import it 
we are exporting that much coal. 
And the total coal that we use then Is 
the blue, and we produce that ourselves. 
And we, we produce about 21 giga BTU's. 
And but that is not a fuel that we worry 
about from an energy independence, 
because we actually are exporting a 
little bit. 
China is buying more and more coal from 
us Which the coal community obviously 
likes in the coal industry because of the 
jobs in the economy, that economic growth 
that it brings. 
that counters a little bit some of the 
decrease in coal production and coal use 
because of global warming and other 
environmental issues. 
Renewable energy. 
Renewable energy. 
And that, the renewable energy is one 
that includes a lot of different things. 
the biggest one being hydroelectricity. 
And, but it also includes ethanol, which 
we talked about last time. 
I believe. 
And wind energy, solar energy which is 
really a negligent amount but ethanol 
and, and biomass is what we, it was 
ethanol get classified as, and hydro from 
dams, hydroelectricity. 
So that's renewable and so when we add 
all those up and say, well. 
Of our total energy that we use which is 
about 120 Giga BTU's, 120 Giga BTU's is 
what we use. 
you sum all of these up, all of these 5 
different fuel resources or energy 
resources that we. 
That we use in order to supply the energy 
that we want daily to drive our cars and 
to heat our homes, etc. 
Then we come up with 120 and you can see 
theres a smaller percentage here, because 
obviously we're adding fuel, most of 
which we produce here at home to the 
crude oil. 
So that brings the. 
The fraction that we are importing of our 
total energy. 
But that's, that's way misleading because 
that's assuming all fuels can be treated 
equally and as I've already mentioned all 
energy is not created equal. 
that's the first rule you know, that is. 
Crude oil is about 16 dollars a million 
BTU's. 
And natural gas is about 3 to 4 dollars a 
million BTU's. 
So why would anyone use oil at all if 
they were equivalent. 
We'd just use natural gas. 
But in fact, there are some 
characteristics that prevent us from 
doing that. 
So. 
Why are we so interested in oil? Well, 
you've seen this chart before, briefly. 
But I just want to point it out again. 
Is that, the problem is, is that, that 
our, our, transportation system is driven 
by oil. 
And. 
That is a issue. 
And one, but, because all this is oil. 
Everything except ethanol, which is a 
renewable biomass. 
And why are we running a transportation 
system on oil, rather than. 
Other cheaper fuels and fuels we produce 
here at home well has to do with the 
characteristics of the fuel and 
converting that fuel into the type of 
energy form that, that our society wants. 
So that's the reason for our focus on 
oil. 
And as you've already seen we import 
about 60% of our oil if we just consider 
crude oil only. 
However about a third of that oil, as we 
saw, comes from Canada that we're less 
worried about. 
From a trend view point we've seen this, 
but when we looked at the import sect 
module, it was coming down some. 
We were at about 65%, and now we're at 
60%. 
So there's a small trend there. 
in the last three or four years it, 
that's bringing down our percent of oil 
imports. 
And you can see there've been some other 
periods that have, the same thing has 
happened. 
out here and we can talk about that later 
but there, there's good reasons why they 
went down when they did. 
So that's the trend and the oil imports 
that we've already mentioned, most of 
them come from, not most of them but our 
biggest importer is Canada and Mexico and 
they're from North America. 
So that's some of the topics on from the 
big picture on energy independence and 
we'll talk about it in more detail in 
Part 2 next time. 
Thank you.