April 22, 2010 3:11PM # Oil Import Make Believe By [Jerry Taylor](https://www.cato.org/people/jerry-taylor) --- SHARE A conversation with documentarian Robert Stone regarding Earth Day [is featured today](http://dotearth.blogs.nytimes.com/2010/04/21/earth-day-the-sequel/?emc=eta1) in *The New York Times’s* “Dot Earth” online column. In the course of his conversation with the *Times’s* Andrew Revkin, Mr. Stone — who is quite alarmed about our reliance on foreign oil — asks: “How many Americans know that we send about $800 billion to the Middle East every year for oil?” Hopefully, not many. [According to the U.S. Department of Commerce](http://www.census.gov/foreign-trade/Press-Release/2009pr/12/), the U.S. spent *$95.4 billion* on crude oil imports from OPEC sources in 2009. But not all OPEC members are from the Middle East. That $95.4 billion includes dollars spent on oil originating from Algeria ($6.3 billion), Angola ($9 billion), Ecuador ($3.4 billion), Nigeria ($17.7 billion), and Venezuela ($23.4 billion) — none of which are in the Middle East. Subtract out that oil and we arrive at *$35.6 billion* spent on Middle Eastern crude oil (a figure rounded from the original nominal counts. I have used the customs value — that is, the estimated value — of the oil being imported rather than the figures that include additional costs for insurance and transportation because money being spent on insurance and shipping goes to third parties that are not for the most part located in the Middle East. But if one wants to use those slightly higher figures, it won’t change the numbers very much at all). For what it’s worth, the total amount of dollars Americans sent abroad for crude oil from all sources was $188.5 billion last year. Even if the figure *were* $800 billion, so what? No one is *forcing* refineries to buy crude oil from foreign suppliers. They presumably believe that the oil at issue is more valuable than the money that must be offered to secure said oil and that oil from other sources is more expensive than oil from the Middle East. Hence, they buy. This is by definition a wealth creating transaction for American business enterprises. Foreign trade, Mr. Stone, is a good thing. The implicit claim, of course, is that there are negative externalities associated with foreign oil consumption. This, however, [is faith masquerading as fact](https://www.cato.org/pubs/articles/taylor_vandoren_energy_security_obsession.pdf) (an argument [also well made](https://www.cato.org/pub_display.php?pub_id=9810) by Cato adjunct scholar Richard Gordon). Regardless, Mr. Stone overstates the alleged problem by orders of magnitude. ##### Related Tags [Energy and Environment](https://www.cato.org/research/energy-environment), [Trade Policy](https://www.cato.org/trade-policy), [Herbert A. Stiefel Center for Trade Policy Studies](https://www.cato.org/herbert-stiefel-center-trade-policy-studies) [![Creative Commons License](/build/cato_2020/images/creative-commons.svg)](http://creativecommons.org/licenses/by-nc-sa/4.0/) This work is licensed under a [Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License](https://creativecommons.org/licenses/by-nc-sa/4.0/).