Fact #522: June 9, 2008
Costs of Oil Dependence 2008
The direct economic costs of oil dependence to the United States are expected to reach $560 billion dollars in 2008, based on the Energy Information Administration's Short-term Energy Outlook Projections for 2008 and the Oak Ridge National Laboratory's Oil Security Metrics Model methodology. Higher oil prices are expected to reduce U.S. GDP by over 1.5%, or approximately $230 billion. Most of the 2008 cost ($330 billion) will consist of the transfer of wealth from U.S. oil consumers to oil exporting economies. This will bring the 5-year (2004-2008) economic costs of U.S. oil dependence to $1.7 trillion, of which $1 trillion is wealth transfer to oil exporting states. – David L. Greene, Oak Ridge National Laboratory, April 28, 2008.
Supporting Information
| Year | Loss of GDP Potential (Billions of 2007$) |
Dislocation Losses (Billions of 2007$) |
Wealth Transfer (Billions of 2007$) |
|---|---|---|---|
| 1970 | $0 | $2 | $0.57 |
| 1971 | $0 | $3 | $0.90 |
| 1972 | $0 | $2 | $1.58 |
| 1973 | $0 | $6 | $4.94 |
| 1974 | $2 | $79 | $62.26 |
| 1975 | $7 | $117 | $65.13 |
| 1976 | $11 | $65 | $70.64 |
| 1977 | $17 | $36 | $79.60 |
| 1978 | $20 | $15 | $72.12 |
| 1979 | $30 | $36 | $110.41 |
| 1980 | $51 | $110 | $139.92 |
| 1981 | $72 | $117 | $118.85 |
| 1982 | $86 | $43 | $82.57 |
| 1983 | $88 | $12 | $64.52 |
| 1984 | $89 | $25 | $62.37 |
| 1985 | $85 | $29 | $53.20 |
| 1986 | $68 | $54 | $18.09 |
| 1987 | $58 | $59 | $33.49 |
| 1988 | $46 | $46 | $21.19 |
| 1989 | $39 | $35 | $35.19 |
| 1990 | $35 | $10 | $45.97 |
| 1991 | $30 | $9 | $29.19 |
| 1992 | $26 | $17 | $27.36 |
| 1993 | $21 | $19 | $19.12 |
| 1994 | $17 | $21 | $16.58 |
| 1995 | $14 | $14 | $21.50 |
| 1996 | $13 | $9 | $35.67 |
| 1997 | $11 | $6 | $26.23 |
| 1998 | $8 | $16 | ($1.97) |
| 1999 | $7 | $16 | $21.17 |
| 2000 | $8 | $30 | $67.82 |
| 2001 | $8 | $30 | $38.70 |
| 2002 | $8 | $0 | $44.54 |
| 2003 | $9 | $12 | $62.23 |
| 2004 | $12 | $41 | $101.75 |
| 2005 | $18 | $83 | $162.52 |
| 2006 | $28 | $112 | $201.07 |
| 2007 | $40 | $113 | $225.71 |
| 2008 | $76 | $169 | $332.82 |
|
Source: Oil Security Metrics Model, David L. Greene, Oak Ridge National Laboratory, April 2008. | |||
| Year | Total (% of GDP) |
GDP Losses (% of GDP) |
|---|---|---|
| 1970 | 0.1% | 0.0% |
| 1971 | 0.1% | 0.1% |
| 1972 | 0.1% | 0.0% |
| 1973 | 0.2% | 0.1% |
| 1974 | 2.8% | 1.6% |
| 1975 | 3.7% | 2.4% |
| 1976 | 2.7% | 1.4% |
| 1977 | 2.3% | 0.9% |
| 1978 | 1.8% | 0.6% |
| 1979 | 2.8% | 1.1% |
| 1980 | 4.9% | 2.6% |
| 1981 | 4.9% | 3.0% |
| 1982 | 3.4% | 2.1% |
| 1983 | 2.5% | 1.6% |
| 1984 | 2.5% | 1.6% |
| 1985 | 2.3% | 1.6% |
| 1986 | 1.9% | 1.6% |
| 1987 | 1.9% | 1.5% |
| 1988 | 1.4% | 1.1% |
| 1989 | 1.3% | 0.9% |
| 1990 | 1.1% | 0.5% |
| 1991 | 0.8% | 0.5% |
| 1992 | 0.8% | 0.5% |
| 1993 | 0.7% | 0.4% |
| 1994 | 0.6% | 0.4% |
| 1995 | 0.5% | 0.3% |
| 1996 | 0.6% | 0.2% |
| 1997 | 0.4% | 0.2% |
| 1998 | 0.2% | 0.2% |
| 1999 | 0.4% | 0.2% |
| 2000 | 0.9% | 0.3% |
| 2001 | 0.6% | 0.3% |
| 2002 | 0.4% | 0.1% |
| 2003 | 0.7% | 0.2% |
| 2004 | 1.2% | 0.4% |
| 2005 | 2.0% | 0.8% |
| 2006 | 2.5% | 1.0% |
| 2007 | 2.7% | 1.1% |
| 2008 | 4.0% | 1.7% |
|
Source: Oil Security Metrics Model, David L. Greene, Oak Ridge National Laboratory, April 2008. | ||
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