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Imagining a World of US Oil Exports

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Every year, the Energy Information Information Administration (EIA) releases its energy outlook, a survey of the global energy landscape with predictions for the future. This year’s report included two scenarios involving an energy self-sufficient America, something that wouldn’t have been within the realm of imagination even ten years ago. Though they exist on the fringe of possibility, the scenarios “high oil and gas resources” and “no net imports” show, as the FT reports, just how much shale energy has transformed the energy landscape:

[These two scenarios] forecast a massive decline in US oil imports – and even the shift to net exports – between now and 2040. The International Energy Agency has already touted the idea of net oil exports from North America – combining the US and Canada – but the new report only considers America.

The US first became a net oil importer in 1946 and since then the reliance on foreign sources has been a matter of national security. The degree of dependence peaked at 60 per cent in 2005. Since then, lower demand due to the impact of high oil prices and the economic crisis, combined with booming domestic production on the back of the shale revolution, have lowered net imports to 41 per cent of consumption.

For the better part of a century, the experts have warned that dependence on foreign oil could cripple the US. Eliminating dependence on foreign oil has been a campaign calling card but never a realistic goal. It likely still isn’t, both because the two aforementioned EIA scenarios are extremely optimistic, and because complete energy independence is a myth as long as America is powered by such a highly traded commodity as oil.

But while it’s probably not a realistic endpoint, it’s still worth striving for. Continuing to invest in our energy infrastructure will ensure that we get the most out of our shale resources.

[OPEC headquarters photo courtesy of Getty Images, Obama image courtesy of Shutterstock]

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  • rheddles

    Saying that energy independence is a myth as long as America is powered by oil is to make a big assumption. It is not at all unlikely that major portions of our energy consumption will switch to natural gas from oil. And natural gas is not nearly as easily a traded commodity as oil. About half of our oil is used for transportation. It is not hard to foresee our fleet converting to natural gas over a 20-30 year period. At that point, while we might still export and import in various locations for economic reasons, we would, for all intents and purposes be energy independent.

    With CNG today selling at retail nationally for any where from $1.00 to $3.00 per gasoline gallon equivalent, I would convert my beater in a heartbeat if there were a station near me.

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