Energy Independence

Energy Independence

Is this an oxymoron, fallacy or just plain ignorance?

July 27, 2010

Some energy analysts think energy independence is an oxymoron.  Some people have defined energy independence as zero imports. Energy experts generally describe “energy independence” as a strategy aimed at reducing our reliance on foreign petroleum by increasing the exploitation of our domestic resources, such as oil in protected areas, coal, nuclear power, and alternatives like wind, solar, hydrogen, etc. 

The U.S. currently uses approx 20 mbpd(according to the Energy Information Agency).  That’s about 10,000 gallons per second for you detail aficionados.  Of that, about 62 percent in 2009 is imported from neighboring countries like Canada and Mexico.    The rest is imported from countries around the world including the Middle East. See chart below.

Crude Oil Imports (Top 15 Countries) (Thousand Barrels per Day)
Country	May-10	Apr-10	YTD 2010	May-09	YTD 2009
CANADA	1,997	1,883	1,937	1,746	1,860
MEXICO	1,290	1,134	1,110	1,088	1,174
SAUDI ARABIA	1,093	1,245	1,068	996	1,079
VENEZUELA	1,011	851	918	1,228	1,025
NIGERIA	1,004	1,092	986	552	608
ANGOLA	423	508	401	493	555
IRAQ	394	490	480	254	487
RUSSIA	358	288	250	416	266
ALGERIA	352	292	306	126	249
BRAZIL	312	289	274	380	349
COLOMBIA	295	364	306	227	250
KUWAIT	219	278	201	93	170
ECUADOR	160	179	177	187	229
CONGO (BRAZZAVILLE)	89	116	90	74	49
NORWAY	78	88	39	92	70

Source: Energy Information Agency

The first call for energy independence came some 35 years ago right after the oil embargo of 1973. The U.S. was importing about 6 million barrels of oil a day. Then President Richard Nixon proclaimed our country was being held hostage by the oil producing countries and issued a proclamation that we would be energy independent within the decade.    Here we are some three and a half decades later, and we are using twice as much oil per day.  Say it ain’t so, Joe! So much for energy independence.

Why oil imports are not necessarily in our best interests.

1.  Financial: given the U.S. imports 20 mm bb/day, at $70/bbls, that’s $980 million dollars a day leaving the U.S.  each and every day. This is a huge drain on the U.S. financial institutions and is threatening our economy.   No wonder the deficit continues to balloon. Kinda frightening isn’t?

2. The second reason this is a bad idea is national security.    Some of these countries (except Canada and Mexico) are not necessary the best U.S. friends.  Relying heavily on crude oil imports from unstable and unreliable countries such as Argentina, Nigeria, Angola and Iraq does not build a great degree of confidence in the American consumer.  The U.S. economy and our military run on petroleum.  It is the engine for our entire manufacturing, culture, lifestyle and general well being.

3.  In looking at the proven reserves, the bulk of the known remaining reserves are found in the Middle East.  Government stability in this area is not sure thing and future U.S. imports will become more unreliable and unavailable as China and India all clamor for more petroleum imports.

What to do?

1.  Maximize all existing energy sources.  And yes, that means fossil fuels, nuclear, renewable energy, biofuels, geothermal, ocean and hydro.

2.  Incentivize U.S. consumers to practice conservation, energy efficiency and generally reduce consumption.  Hard to do with SUVs, more gas guzzling vehicles on the road to add to the 250 million already clogging America highways and byways.  3500 sq ft homes, big screen TVs etc, more U.S. citizens and more electronic gizmos like Blackberry, cell phones, game boys, etc. Encourage mass transit.  Convert large fleets of light duty vehicles to natural gas.  

3. Invest (public and private) in research and development to generate new energy sources, improve the efficiency of current technology by orders of magnitude.

4.  Continue to increase the communication plan to American consumers of why this is important.  Such topics as creating new clean jobs, buying energy efficient appliances, trading in the SUVs, improving mileage reqs., gas lines, oil embargo, price spikes, etc., ought to get the attention of many consumers.

5. Understand this is a major shift for the American public.  In spite of the current economic crisis, Americans are still in love with the auto.  It is a paradigm shift for the American consumer. It will take time and money to covert from an oil import environment to and energy independent economy.

This strategy will enable the U.S. to meet our basic energy requirements as well as develop new and more efficient energy sources.  We are at the crossroads.  Continuing status quo is no longer an option.  Our economic security and our sovereignty may well depend on our moving away from continued dependence upon foreign oil.  The way is clear; but we must act now!