Will the US ever be energy independent?

The United States is largely dependent on crude oil. It is used to make gasoline, diesel fuel, aviation fuel, electricity, plastics, and essential products such as asphalt. Modern farming and food processing also use significant amounts of oil. [1] Because of these dependencies, where consumed US oil is produced can have a huge impact on our economy and national security.

Currently we are going in an energy direction that would delight all presidents since Nixon. There has been a surge in new oil rigs across the country from deep sea sites to rural oil havens, reversing twenty years of decline. Newly developed technologies combined with rising oil prices since 2004 have spurred this rise in production. [ 2]

Not only has production increased, but US consumption has decreased because of the economic downturn beginning in 2008, rises in oil prices, and movements toward using more fuel efficient vehicles. In 2005 60% of consumed liquid fuel was imported, while in 2011 this percentage dropped to 45%. This can be seen in a chart in source [3].

Though these trends may be counterintuitive economically (supply rising, consumption falling, and prices driving upward), the rising global demand for oil is controlling the economic fluctuations in the oil market. BRIC countries are growing faster than they can create an energy infrastructure, pressuring existing producers to increase output. United States oil production is currently 5.7 MMBD and is predicted to double by 2020. [2]

Obama’s plans to increase energy independence, as announced in his first speech as President to Congress in January of 2009, have mostly come true. His three main initiatives are as follows:

  1. Create a new American energy economy by making homes more energy efficient and increasing the energy infrastructure
  2. Ensure fuel efficient cars are built in America to maintain competition with foreign carmakers and reduce oil consumption per capita
  3. Encourage the federal government to work with states to reduce greenhouse gases, and create incentives to develop clean energy. [4]

While this third bullet will suffer as a result of increased oil production within the United States, cars built today are increasingly fuel efficient, and the American economy and energy infrastructure is growing.

Recently Obama has begun to change his tune, seemingly as a campaign tactic for the upcoming the election. With less emphasis on clean energy, and more on encouraging new oil production, signs are pointing toward an administration after this election that will emphasize oil production and US energy independence from fossil fuel products. While global growth will largely affect this possibility of becoming more independent, it may be more a question of whether US policy and energy companies can keep up with global demand.

[1] “Why we may never be able to say goodbye to oil”: http://www.bbc.co.uk/news/10311029 %5B4%5D Obama speech: http://news.bbc.co.uk/2/hi/americas/7851970.stm

[2] “The US inches toward goal of energy independence”: http://www.nytimes.com/2012/03/23/business/energy-environment/inching-toward-energy-independence-in-america.html?_r=1&ref=energy-environment

[3] Charts: “While the US moves toward energy independence”: http://www.nytimes.com/interactive/2012/03/22/business/energy-environment/while-the-us-moves-toward-energy-independence.html?ref=energy-environment

[4] Obama speech: http://news.bbc.co.uk/2/hi/americas/7851970.stm



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2 responses to “Will the US ever be energy independent?

  1. ghasemidoroh

    Thanks for your topic.
    Let me make some comments about your post:
    1) For Energy In-dependency in general , Except for transportation, in my opinion yes! Soon United States will be independent. US has some major sources of energy such as Shale Gas, Shale Oil and Gas Hydrates. With the growing technology, we will be able to produce economically from these resources. Furthermore, we are working on Renewable sources of energy as well which pushes us toward energy In-dependency as well.
    2) For Oil In-dependency , I think No.
    US needs gasoline for the transportation . Gasoline is taken from light components of crude oil. And US does not have enough light oil resources to provide the demand for gasoline. Oil produced from Shale Oil and possible heavy oil reservoirs will not be a good source for providing gasoline. There is only one solution for this part and that is moving our cars toward replacing gasoline with gas. This plan can be a long time plan but I think in short time we can not reach this point. Consequently, we need to import oil and increase in domestic oil production won’t be a solution. We can not produce enough light oil for supplying the whole emand for gasoline in the US.

    In summary, in my opinion we should invest in two sections if we want to be energy independent one day :
    1) Investing in Shale gas and Gas Hydrate production technology to produce natural gas from those sources economically
    2) Replacing gasoline with Natural gas in cars and encourage people to use the new cars instead of conventional ones.

    Hope to see the US to be Energy Independent soon!

  2. lwinm

    Thanks for your post. I believe the subject of U.S. energy independence is one of the greatest challenges our nation faces today in regards to continued economic growth and national security. You have identified some key points that as the global price for crude oil has increased, domestic consumption has decreased (initially due to the recession and recently due to sustained high gasoline prices), yet domestic production has increased (seemingly on an upward trajectory). As the election draws near, it seems that the President’s policy focus has shifted towards reducing domestic gasoline prices, a sign that fossil fuels, in particular gasoline, is still very much embedded in the U.S. economy.

    To build on ghasemidoroh’s comments, I wanted to point out that it might be important to clarify what we mean by U.S. “energy independence”. The reason I say this is because we have two main energy sectors in the U.S., namely transportation and electricity. Both sectors rely heavily on fossil fuels; however, only transportation relies on gasoline as a source of fuel. Certain solutions to “energy independence” said generally would have less impact on transportation and it’s dependence on oil. For example, energy efficient homes would reduce consumption of electricity but would impact gasoline consumption less directly. Furthermore, the development of renewable energy primarily focuses on renewable energy used for electricity generation. This could potentially help in reducing dependence of foreign oil, if and only if a large percentage of the cars were electric vehicles or plug-in hybrids.

    Lastly, I believe ghasemidoroh brought up a good point that even if we increased domestic oil production further, we would still not be able to meet demand entirely. In other words, as long as our transportation sector relies on gasoline, the U.S. will most likely need to import some significant percentage of it. I would like to suggest that instead of focusing one type of fuel for transportation (gasoline, natural gas, etc.), wide adoption of electric vehicles and plug-in hybrids would be a wiser investment. From history, we know that depending on a one fuel source for transportation, subjects a large portion of the U.S. economy to volatility in price. In the future, there is no guarantee that natural gas prices will remain low. Electricity, on the other hand, can be generated from a portfolio of sources. Similar to an investment portfolio, diversification will reduce overall risk of the portfolio. Additionally, developing generation from renewable energy as a significant percentage of this portfolio will only enhance independence, i.e., reduce the risk of our economy being impacted by factors which are less under our control.

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