Wednesday Feb 08, 2023

What “Energy Independence” Really Means For The U.S. – OilPrice.com

Since the days of President Jimmy Carter and the 1970s oil crisis, the United States has relentlessly pursued the utopia of energy independence. Indeed, energy independence is a worthy pursuit that both Democrats and Republicans readily agree upon. After all, relying on other countries for oil, natural gas or coal is an inherently risky proposition since It can lead to wars, or compromise the country’s relationships with foreign powers.

The notion that the country could become self-sufficient by producing enough energy to sustain the entirety of its population and industries was first floated by Nixon when he declared war on foreign oil during the oil crisis of the 1970s. 

It was later popularized by Bush in a state of the union address in February 2006 when he decried United States’ addiction to oil, which is often imported from unstable parts of the world before announcing plans to break this addiction by developing several alternatives, including a multibillion-dollar subsidized ramp-up of biofuels. 

Bush went on to boldly declare that by 2025, America would “…make our dependence on Middle Eastern oil a thing of the past” by cutting imports from Gulf states by three-quarters.

Well, it turns out the former president was prescient on some key predictions, which in hindsight appears quite remarkable when you consider that back then, the shale industry was barely on its feet.

The revelation that the U.S. is currently producing more energy than it consumes suggests that America has finally achieved the seemingly elusive goal of producing enough fuels to avoid relying on the rest of the world.

Net Energy Exporter

According to the U.S. Energy Information Administration (EIA), the United States was a net energy exporter in 2019 and 2020.

EIA notes that total U.S. annual primary energy net imports (imports minus exports) generally increased in most years since the mid-1950s, reaching a record high in 2005, equal to about 30% of total U.S. energy consumption. Since 2005, total annual energy imports have gradually decreased while total energy exports have increased. 

The United States became a net total energy exporter in 2019 for the first time since 1952, and maintained that position in 2020 even though both total energy production and consumption were lower in 2020 than in 2019. Total U.S. energy exports exceeded total energy imports by 3.46 quadrillion British thermal units (quads) in 2020, the largest margin on record. U.S. energy exports in 2020 totaled 23.47 quads, and energy imports fell 13% to 20.0 quads, the lowest level since 1992.

Crude oil accounts for the largest share of U.S. energy imports on an energy content basis. Even though the United States remained a net importer of crude oil in 2020, crude oil net imports were at the lowest level since 1985. Moreover, some of the imported crude oil is refined into products that are exported.

Source: EIA

Despite a 4% drop in domestic crude oil production in 2020 from 2019, U.S. crude oil net imports in 2020 were the lowest since 1985. U.S. total annual crude oil exports have increased every year since 2010 and reached a record high in 2020 of …….

Source: https://oilprice.com/Energy/Energy-General/What-Energy-Independence-Really-Means-For-The-US.html

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