Friday, September 30, 2011

US Oil Imports Falling Rapidly & Can Easily End By 2025

US will be less dependent on foreign oil in 2011 than in any year since 1999. A major reversal in oil imports is now underway, and the USA can indeed eliminate oil imports by 2025.

Here is what is happening and why.  Oil imports surged from 1985 to 2005, when they peaked and accounted for 60% of all the oil we consumed.  In 2010 oil imports provided 47% of the oil consumed here.

The good news keeps rolling in 2011, when the US may import less oil than anytime since 1999. 

Why is the USA reducing rapidly oil imports.  Three forces are at work right now.

First, domestic oil production is increasing after declining for 35 years and reaching its nadir in 2008.  US oil production is on track to increase again in 2011.  The breaking of the perpetual decline in USA oil production is a remarkable and remarkably important event.  The cause of the production increase is mainly new, unconventional oil production gaining momentum.

Second, USA biofuel production is surging.  Biodiesel production trippled in 2010 and ethanol production is reaching 900 million barrels/day, a considerable number, and up from 700,000 barrels per day in 2007.

Third, efficiency of oil use is increasing as miles per gallon rises.  The 2 major increases in CAFE standards since 2009 will have a significant impact when they are fully in place on total oil consumption.

What is not yet having much impact on oil imports is substituting natural gas and electricity for oil.  More natural gas and electricity is being used to power vehicles but the totals are minor currently.

Using more gas and electricity to power vehicles, when combined with domestic oil production increases, biofuel increases, and improved efficiency, can end USA dependence on foreign oil.

The USA should adopt a policy that drives down US oil imports by 3 percentage points every year for the next 15 years.  We now have powerful tools to end oil imports by 2025.

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