It looks like the USA has an emerging energy policy that is actually working to break our addiction to foreign oil.
Oil imports in August 2011 where 11% lower than in August 2010, according to an article in the August 27th Wall Street Journal. These 2011 oil import declines build on lower imports in 2010 when oil imports were their lowest level since 2003.
What is the emerging energy policy that has begun to wean the USA off of foreign oil? Rapidly rising biofuels production driven by a federal renewable energy standard, significantly raised federal fuel efficiency standards for cars, growing usage of natural gas and electricty to power transportation, and rising domestic US oil production add up to a recipe, almost a policy, for ending foreign oil imports.
Yet, providers of addiction treatment know that beating an addiction is a daily battle for the patient. And the progress made in 2010 and 2011 could be easily reversed, unless the policy needed to end our foreign oil addiction is boosted.
Specifically, while the federal policies are in place to increase biofuels and increase vehicle fuel efficiency, no coherent federal or state policy exists on promoting the use of gas and electricity in transportation. This is a major hole in policy that must be filled.
High global oil prices as long as they last will provide major financial incentives for oil drilling in the US and shale oil is a major new resource. But will high global oil prices persist?
Given booming Chinese and Indian demand for oil, the odds are high that global oil prices will be at least where they are today and quite likely much higher within the next 5 years.
While fueling domestic oil drilling, those higher global oil prices mean that another oil price shock is likely around the corner. Our economy can barely afford $80 per barrel oil and US economic growth is crippled by oil prices at $125 per barrel or higher.
We must reduce our oil consumption and end our reliance on foreign oil to protect our economy and national security. While few Americans know it, important progress in doing both is now underway. But our progress is fragile and must be nurtured with further smart policy.