Oil imports are falling substantially and may fall back to 1987 levels, as a result of increased domestic production, more fuel efficient vehicles, and oil displacement by biofuels, electricity, and natural gas. While good news for national security, importing less oil does not remove oil's continuing threat to our economy.
Please take a look at the great chart by Michael Levi in the linked to article or go to Michael's piece here:
Levi's data shows three fascinating things. First, oil purchases have risen above 2.5% of GDP twice--in 1979 and 2008--and both times the nation's economy was damaged very badly. Second, during the economic boom from 1984 to 2000, the nation spent 1% or less of its GDP to purchase oil. Third, currently, the US is spending 1.5% of its GDP on oil.
Spending 1.5% of our GDP on oil is consistent with the slow economic growth that we see today. Indeed the difference between spending more than 2.5% of GDP on oil and less than 1% is about $250 billion per year.
The price of oil alone does not make or break the US economy, but it can create great economic stress or opportunity. In terms of our economic security, two oil variables are critical--the price of oil and the amount of oil consumed, whether imported or not.
To protect our economy from globally-priced oil, the only measure that works is to reduce the consumption of oil by using it more efficiently and by displacing more oil with natural gas, electricity, and biofuels. For our economic security, America and Pennsylvania continues to do far too little to roll out alternative energy fueling stations, the single most important thing that can be done to break the oil threat to our economy!