U.S. Department of Energy - Energy Efficiency and Renewable Energy

Vehicle Technologies Office

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.

Graph 1: Direct Economic Costs of U.S. Oil Dependence, 1970-2008
Graph showing the direc economic costs of U.S. oil dependence from the years 1970 to 2008. For more detailed information, see the table below.
Graph 2: Oil Dependence Costs Relativ to U.S. GDP, 1970-2008
Graph showing oil dependence costs relative to the U.S. gross domestic product from 1970 to 2008. For more detailed information, see the table below.

Supporting Information

Graph 1: Direct Economic Costs of U.S. Oil Dependence, 1970-2008
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.

Graph 2: Oil Dependence Costs Relative to U.S. GDP, 1970-2008
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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