Something remarkable has happened in the US energy market in the last couple of years. After decades of steady decline, oil production rose again. The production boost is from shale oil, which just became economically viable for the first time.
The boom has triggered a new optimism about America’s energy security, with many commentators even predicting that the US could become a net oil exporter. Politicians have run with the theme, promising a new era of oil independence. Mitt Romney’s energy plan boldy aims for energy independence by 2020.
This graph is from the Energy Information Administration’s 2012 report, and it contains everything you need to know about how realistic this vision is.
US oil consumption over time is shown in the green line at the top, and oil production below in blue. As you can see, America consumes far more oil than it produces, and has done for a long time. In 2010 around half of its oil was imported.
The right hand side of the graph shows the projection to 2035, with the EIA’s estimate of shale oil and conventional oil production. It rises, but even with the optimistic forecast here, the country would still be importing over a third of its oil in twenty years time.
So can the US ever be self-sufficient in oil? Absolutely – it can and it should, but the key lies in the green line rather than the blue one. Mitt Romney isn’t wrong about energy independence, he’s wrong about how to achieve it. In this scenario, America can be oil independent if cuts oil consumption by 40% by 2035. It would then need to keep cutting consumption to make sure it keeps ahead of the peak in shale oil production.
Since cutting oil consumption is the right thing to do to lower carbon emissions, there’s a double win here. Oil independence for America would be good for its economy, good for relations in the Middle East, and good for the climate.
So next time you hear a political activist talking about energy independence, don’t dismiss the idea. Instead, ask them about their plans for public transport. Ask them how they will support new urbanism, how they would reform zoning laws to create higher density housing and walkable neighbourhoods. Ask them about CAFE standards, fuel taxation, electric cars and renewable energy.