Survey Reveals Oil And Gas Ignorance
The third annual “Energy IQ” survey, conducted for the American Petroleum Institute (API), finds that while Americans recognize the need more energy in the coming years, they continue to underestimate the amount of oil and gas that government experts predict will be needed to meet that demand. Conversely, respondents overestimate the role that renewable energy sources will play in meeting future demand, the amount of oil the U.S. imports from the Middle East, and oil and natural gas industry earnings.
“Americans understand fundamentally that we need more energy to grow our economy but they continue to undervalue oil and gas in meeting expected demand,” said Jack Gerard, API’s president and chief executive said.
“The American public wants to believe there is a silver bullet answer to our energy challenges despite what government experts predict,” said Jim Hoskins, senior vice president for Harris Interactive, which conducted the survey for API. “Americans have become more aware of how current policies limit increased domestic production, but they also continue to subscribe to common, yet critical, misconceptions regarding how the industry operates and the energy we’ll need to meet growing demand.”
Comparing the results to last year’s survey, respondents showed a continued misunderstanding on key issues such as the significance of North American oil and natural gas resources, the number of people employed by the oil and natural gas industry in the U.S. and the amount of taxes the industry pays every year.
API commissioned the online research by Harris Interactive of 1,298 U.S. adults between April 30 and May 8, 2009. Results were compared to the previous two years’ responses. Among the survey’s key findings:
More Americans understand that U.S. energy demand will increase during the next 20 years, but they underestimate the vital role that fossil fuels will play in meeting demand. While the U.S. Energy Information Administration (EIA) projects that U.S. energy demand will increase 9% during the next 20 years, only 5% of respondents chose the correct answer. The majority overestimated this number, believing that U.S. demand would increase 16% to 21%. When asked what percent of global energy demand will be met by fossil fuels such as oil, gas and coal, according to government projections, only 10% of respondents answered correctly that fossil fuels will meet 85% of energy demand. This is the second consecutive year this number has dropped, even though the EIA figure for future U.S. reliance on fossil fuels has risen by 5% since 2008. Similarly, while the EIA projects that more than 55% of U.S. energy demand in 2030 will be met by oil and gas, only 16% of respondents chose this answer.
Those surveyed overestimate the amount of oil and natural gas supplied to the U.S. by the Persian Gulf countries and underestimate the amount that is supplied from North America. According to the U.S. Department of Energy (DOE), 12% of the oil consumed last year in the U.S. came from the Persian Gulf countries. Only 7% of respondents chose correctly, while more than 40% of respondents believed that over 30% of our oil supply came from the Persian Gulf. About 53% of respondents believed that Saudi Arabia was the largest U.S. supplier of imported crude oil. In fact, according to the DOE, Canada is the largest supplier of imported crude oil. Only 5% of respondents knew that more than 73% of oil and gas consumed in the U.S. was produced in North America. This is down 3% from last year’s survey. A surprising 42% were under the misconception that the answer was less than 35%.
People underestimate the contributions the industry makes to the U.S. economy through jobs and taxes, and overestimate the industry’s profits. Only 15% of respondents knew that six million Americans are employed directly or indirectly by the oil and gas industry. Only 9% of respondents knew that oil companies pay more than 40% in income taxes as a share of their income. The majority thought that it was less than 30%, with 33% of all respondents under the misconception that companies pay less than 15% in income taxes. Similarly, when asked how much the oil and gas industry paid in taxes over the past three years, 25% of respondents believed that the U.S. oil and gas industry contributed less than $100 billion. 43% of respondents chose “not sure” and only 10% answered correctly — $242 billion, according to the EIA. More than 40% of respondents believed that the oil and gas industry earned more than $0.20 per every $1 of sales. In fact the industry earns just below $0.06 on every $1.
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