API: American's Don't Understand Oil Business

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API: American's Don't Understand Oil Business

Most U.S. adults do not understand energy demand and supplies or the role of America's oil and natural gas companies, according to results of a survey commissioned by the American Petroelum Institute.

When presented with 20 multiple choice questions about the oil business, on average more than 25 percent of respondents said they were "not sure" of an answer and in many cases chose the response farthest from the correct answer.

Those surveyed greatly overestimate the amount of oil the United States imports from the Middle East. When asked which country was the largest supplier of oil, almost 60 percent chose Saudi Arabia, which is actually the fifth-largest supplier, after Canada, Mexico, Nigeria and Venezuela. Only one in 10 people correctly identified Canada as the largest supplier to the United States.

Only 8 percent correctly noted that less than 15 percent of the oil the United States consumes comes from the Persian Gulf countries. One-quarter of respondents pegged the figure between 46 percent and 60 percent, three to four times higher than the actual figure.

Americans seriously overestimate the size of U.S. oil and natural gas companies relative to competing companies that are owned by foreign governments. When asked "What percentage of the world's 10 biggest oil and natural gas companies are owned and operated by foreign governments?" 2 percent of respondents knew that all of the top 10 companies fall into that category.

Similarly, only 8 percent knew that ExxonMobil, the largest U.S. oil and natural gas company, was not among the 10 largest oil reserve holders. More than one in three people (36 percent) thought ExxonMobil was among the top three largest companies.

The public also underestimates the continued importance of fossil fuels in meeting global energy demand in the next 25 years, and overestimates the impact renewable sources will have in meeting that demand. While the International Energy Agency projects that 81 percent of global energy demand in 2030 will be met by fossil fuels like oil, natural gas and coal, only 14 percent of respondents chose this answer. The majority thought it would be 61 percent or less.

While the U.S. Energy Information Administration projects that less than 10 percent of U.S. energy use will be supplied by renewable energy sources in 2030, only 5 percent of respondents chose that answer. More than one in three people thought renewable sources would account for 20 percent or more.

People also overestimate the profits of U.S. oil and natural gas companies and have little understanding of the investments the companies are making in emerging energy technologies, API said. On profits, 42 percent of respondents guessed that the industry earned between 16 and 20 cents of every dollar of gasoline sales in 2006. In fact, the industry earned 9.5 cents, a choice (six to 10 cents) selected by only 14 percent of respondents.

On investments, 7 percent correctly estimated that U.S. oil and natural gas companies invested almost $100 billion in emerging energy technologies in North America between 2000 and 2005. More than one third estimated less than $25 billion, the lowest possible choice.

The American Petroleum Institute commissioned the online research by Harris Interactive of 1,333 Americans between May 29 and June 4, 2007.