The catastrophic deterioration of the American oil position is shown even more starkly in figure 2, which presents the U.S. share of total world oil production over the period from 1940 to 2010. In 1940, the United States produced 60 percent of the world’s oil. Today we produce 7 percent. Or, put another way, in 1940, the United States, alone, produced half again as much oil as the entire rest of the world put together; today they produce 13 times as much as we do.
Fig. 2: U.S. Oil Production as a Share of Total World Output.
As I explain at some length in my book Energy Victory, during World War II, the American strength in oil production was a decisive advantage for the Allies. Airplanes, ships, and tanks all ran on oil, and we controlled the supply. Because we were so rich in oil, we had no compunction whatsoever deterring us from bombing the Third Reich’s oil refineries or sinking the Japanese tanker fleet, and by doing so, we brought the enemy to their knees. In contrast, today, we are afraid to strike the Islamists for fear that our actions might endanger their petroleum output. The Kharg Island oil terminal handles 80 percent of Iran’s oil exports. An air raid on this extremely flammable facility would bankrupt the regime, thereby putting an end to its nuclear bomb project — and probably its existence. But we are not prepared for the economic consequences, and so must refrain, even as the terrorists continue to pour ever more bomb-usable, highly enriched uranium from their centrifuges.
In the 1940s, the petroleum business was an American game, and it was enormously to our advantage that the world ran on oil. Today, the exact opposite is true in both respects. That is why we need to take two vital steps:
1. We need to improve our horrible position within the petroleum game by eliminating the EPA and other crippling bureaucracies that have turned the U.S. from the game’s biggest winners into its worst losers.
2. We need to drastically reduce the importance of the petroleum game itself by enacting flex-fuel-vehicle legislation that will open the transportation market to fuels derived from non-petroleum sources.
America’s massive shortfall in liquid-fuel production is an ongoing economic disaster and a five-alarm strategic weakness. It cannot be remedied by business as usual, a philosophy of less-is-more consolation, goofy New Age–inspired feel-good projects, make-believe success claims, or rhetorical spin. Rather, it must be dealt with in a serious and forceful way. If Mr. Obama is not prepared to do that, it is essential that he be replaced by someone who is.