United States energy independence is the concept of eliminating or substantially reducing import of petroleum to satisfy the nation's need for energy. Some proposals for achieving energy independence would permit imports from the neighboring nations of Canada and Mexico, in which case it would be called North American energy independence. Energy independence is espoused by those who want to leave the US unaffected by global energy supply disruptions and would restrict reliance upon politically unstable states for its energy security.
In total energy consumption, the U.S. produces more energy than it uses. [1] In May 2011, the U.S. became a net exporter of refined petroleum products. [2] By 2014, the United States was the world's third largest producer of crude oil, after Saudi Arabia and Russia, [3] and second-largest exporter of refined products, after Russia. [4] In October 2019, the United States first became a net exporter of all oil products, including both refined petroleum products and crude oil. This was in the week ending October 18. During this week of "net exporter of all oil products, including both refined petroleum products and crude oil", "Weekly U.S. Commercial Crude Oil Imports Excluding SPR" were 5,857,000 barrels per day and exports were 3,683,000 barrels per day. In this week of "energy independence", the United States was still importing more crude oil than it was exporting. Weekly Production of Crude Oil for this week totaled 12,600,000 barrels per day. This "energy independence" occurred again during two weeks in December 2019. In 2020, this occurred in 38 weeks. It occurred 11 times in 2021 and it has occurred every week since the week ending March 11, 2022 through week ending May 5, 2023, (the most recent reporting of the EIA) 68 times. During the pandemic, weekly crude oil production dropped to a low of 9,700,000 barrels per day. As of week ending May 5, 2023, crude oil production had returned to pre-pandemic levels of 12,300,000 barrels per day. [5] By 2021 the US was the world's largest producer. [6]
As of March 2015, 85% of crude oil imports came from, in order of decreasing volume, Canada, Saudi Arabia, Mexico, Venezuela, and Colombia. [7] Nineteen percent of imported oil came from the Middle East. [8] The fraction of crude oil consumed in the US that was imported went from 35% immediately before the 1973 oil crisis, peaked at 60% in 2005, and then returned to 35% by 2013 [9] thanks to increased domestic production [10] from the shale oil boom. [11] Beginning in the 1970s, exports of crude oil were illegal without a permit; in 2013, the United States physically exported a relatively small amount of oil, and only to Canada. [12] The ban was repealed in 2015. [13]
Greater energy self-sufficiency, it is claimed, would prevent major supply disruptions like the 1973 oil crisis and the 1979 energy crisis. Proponents argue that the potential for political unrest in major oil suppliers, such as Saudi Arabia, Venezuela, and Nigeria, is abundant, and often causes great fluctuations in crude oil prices, especially in the short term.
Large individual US pipelines and other fuel infrastructure and extraction projects are controversial issues in US politics.
In the early 20th century the United States became a major oil supplier to the world. World War II prompted a Synthetic Liquid Fuels Program but it did not go beyond research. In mid-century the country shifted from being a major exporter to a net importer. An import quota imposed in 1959 (during the Dwight D. Eisenhower administration) limited imports to a fraction of domestic production until 1973. [14] After the 1973 oil crisis, the United States Department of Energy and Synthetic Fuels Corporation were created to address the problem of fuel import dependency.
The US's dependence on foreign oil rose from 26 percent to 47 percent between 1985 and 1989. [15] According to the Washington & Jefferson College Energy Index, by 2012, American energy independence had decreased by 22% since the Presidency of Harry Truman. [16] The US's imports of foreign oil fell to 36 percent in 2013 (during the Barack Obama administration), down from a high of 60 percent in 2006 (during the George W. Bush administration). [17]
Many proponents of energy independence look to the United States' untapped domestic oil reserves, either known or potential. Those who favor increasing domestic oil production often suggest removing many of the limitations on oil exploration in the Gulf of Mexico, the Arctic National Wildlife Refuge (see Arctic Refuge drilling controversy) and the outer continental shelf. Foreign dependence is not the only factor in North American energy politics, however; environmental concerns around land and water pollution and greenhouse gases are also matters of controversy.
Some proponents of US energy independence promote wider use of alternatives such as ethanol fuel, methanol, biodiesel, plug-in hybrids and other alternative propulsion. A 2013 report published by the Fuel Freedom Foundation said that without a shift to domestic feedstocks for fuel, such as natural gas and biomass, the US would not be able to achieve energy independence. [18] As of 2014, the United States imposed an import tariff of 54 cents a gallon on ethanol fuel (there is no such import tariff on oil or methanol fuel). Ethanol fuel in Brazil is produced from sugarcane, which yields much more fuel per acre than the corn used for ethanol production in the United States.
In the United States, oil is primarily consumed as fuel for cars, buses, trucks and airplanes (in the form of gasoline, diesel and jet fuel). Two thirds of US oil consumption is due to the transportation sector. A national strategy designed to shift all transportation to a combined use of alternative fuels and plug-in hybrids is predicted [19] to make the US independent of petroleum (oil).
Oil imports are most problematic in domestic politics and energy security when they come from countries that are openly hostile to US foreign policy and interests (Iran, Venezuela, and formerly Iraq), are former or potential future rivals (Russia) or have questionable human rights practices (Saudi Arabia). Sometimes an alternative "North American energy independence" is proposed,[ by whom? ] by which North America as a unit should be energy independent, but in which the US could still import energy from Canada and Mexico, which are less problematic allies and more tightly economically integrated.
A related, less absolute, policy may be called North American energy security. In 2012 in an editorial to Canadian newspaper The Globe and Mail Mexican president elect Enrique Peña Nieto, called North American energy security a "common goal" of Canada and Mexico. [20]
The benefits are argued to be similar to US energy independence—the reduction of North America's energy dependence on unstable regions such as the Middle East and South America and accepting supplies from the reliable North American Free Trade Area, reducing exposure to terrorism abroad; lower balance of trade and foreign exchange stresses on the US economy in an era when suppliers may begin to price oil in euros; the development of renewable energy sources to displace fossil fuels; and the promotion of energy conservation technology exportable to energy-poor nations.
In Canada and Mexico there is also the concern not to have energy policy dictated by the United States, as well as tension over US ownership of energy companies.
In 1937 Mexico passed a constitutional amendment to nationalize its oil industry, which led to the creation of Pemex, the national oil company. [21] There have been several proposals to privatize Pemex since, but they have never come to fruition as many Mexicans fear foreign control of this strategic industry.
The 1957 Canadian election was fought partially in response to the 1956 Pipeline Debate which concerned whether or not the government should allow a US-owned company to build a trans-Canadian gas pipeline and whether the route should be entirely within Canada or partly through the United States. The right-leaning Progressive Conservatives and leftist Co-operative Commonwealth Federation opposition parties opposed American involvement in the pipeline while the Liberal government supported it. The Liberals were defeated in the 1957 election.
In 1973 Canada created its own state energy company Petro-Canada. It began operations in 1976, though it bought assets from private companies rather than seizing them as in many other countries. In 1980 the National Energy Program was launched to create oil self-sufficiency within Canada. It attempted to use tax incentives to discourage oil exports (mostly from Western Canada, primarily the province of Alberta) to the US, and redirect these towards to the oil importing provinces of Eastern Canada. The Foreign Investment Review Agency was also created to screen foreign (mostly US) takeovers of Canadian companies. These policies were bitterly opposed by the provincial government of Alberta, and were repealed and reversed during the Conservative government of 1984–1993 which sought closer economic ties with the US, including the Canada–US Free Trade Agreement of 1988.
In his Malaise speech, President Jimmy Carter declared that the United States will never again import as much oil as it did in 1977 (Carter), [22]
In his 2006 State of the Union Address, President George W. Bush used the phrase addicted to oil, a phrase widely discussed in the media. [23] [24] [25] Oil imports into the US peaked in 2006, when imports supplied nearly 12 million barrels/day which is 60% of US consumption; they have declined since, due both to increased domestic oil production, and reduced consumption. [26]
In 2011, President Barack Obama released his Blueprint for a Secure Energy Future that aimed to reduce oil dependence by a third, by producing more oil domestically, increasing use of cleaner alternative fuels, and improving efficiency. [27] Obama stated, “The fact of the matter is, is that for quite some time, America is going to be still dependent on oil in making its economy work." [27]
In 2012, Obama repeatedly stated that the US had begun "freeing ourselves from foreign oil." [28] Canadian observers noted that his usage of "foreign" did not include Canada. [29] Obama called Canada and Mexico "stable" foreign energy suppliers. [27]
The Keystone XL pipeline from Alberta to the Gulf Coast would expedite processing of Canadian oil. In November 2015, Obama rejected the proposal to build this pipeline because of domestic environmental concerns over water quality as well as the general antipathy of the environmental movement to pipeline building, and the production practices in the source (the Athabasca oil sands). [30]
In March 2017, President Donald J. Trump announced the granting of a permit for construction of the Keystone XL pipeline, calling it "the first of many infrastructure projects" that he intended to approve in order to put more Americans to work. The permitting came two months after Trump, only days into his presidency, signed an executive order aimed at reviving the Keystone XL and Dakota Access pipelines. [31]
In May 2017, President Donald J. Trump promised "complete" independence from foreign sources of oil. [32]
During his administration's Energy Week celebration of June 2017, President Trump announced that he was formally seeking a review of US energy policies, in order to help the Nuclear power industry prosper. Trump also announced that the Interior Department would be kicking off the formal process to expand areas available for offshore drilling of oil and natural gas. He vowed to create "American energy dominance". [33]
In May 2018, it was reported that US liquefied natural gas (LNG) exports had quadrupled[ citation needed ]. The value of US LNG exports was estimated to reach nearly $5 billion in 2018 and $12 billion in 2019. [34]
In early December 2018, it was reported by Bloomberg that the US had turned into a net exporter of oil "last week", thus breaking nearly 75 continuous years of dependence on foreign oil. Reportedly, the US sold overseas a net of 211,000 barrels a day of crude and refined products such as gasoline and diesel. This, compared to net imports of about three million barrels a day on average previously during 2018 and the prior annual peak of more than 12 million barrels a day during 2005, was confirmed by the US Energy Information Administration. [35] This occurred not because of an increase in crude oil production, as it remained at 11,700,000 per day, it occurred because of an over 1,000,000 barrel per day increase in crude oil exports that came from an equal reduction in Crude Oil Stock. The next week, the Weekly U.S. Imports of Crude Oil and Petroleum Products returned to 1,322,000 barrels per day.
In March 2019, crude oil prices regained momentum after reports showed an unexpected drop in US fuel supplies. The American Petroleum Institute reported domestic crude inventories declined 2.58 million barrels the previous week. The US Energy Information Administration was due to report on the official numbers on domestic supply and demand. However, James Williams, president at WTRG Economics in London, Arkansas said, "These are clearly bullish numbers, and if reinforced it will be more bullish". [36]
It wasn't until January 2020 that Weekly U.S. Field Production of Crude Oil hit 13,000,000 barrels per day and at this level, consistently made the U.S. a net exporter of Crude Oil and Petroleum Products. By May, as the COVID-19 pandemic took hold, production dropped to 11,900,000 barrels per day and then by the end of August to 9,700,000 barrels per day. Even at these low levels of production, the U.S. remained a net exporter due to the suppression of demand.
In January 2021, when President Joseph R. Biden Jr. became president, the United States was still "energy independent" even though domestic crude oil production had declined to 10,900,000 barrels of crude oil per day from its 13,100,000 peak. As demand recovered from the pandemic, the United States lost its "energy independence" until it regained it in the end of 2021, even though, domestic weekly production of crude oil had only grown to 11,500,000 barrels per day. By the week ending March 18, 2022, the United States regained its "energy independence" with daily production only increasing by 100,000 barrels of crude oil per day; it has maintained it ever since.
While the Biden administration has often been maligned for its efforts to migrate to renewable energy and its opponents have promised to return the United States to "energy independence," the United States has been "energy independent" for 80 of the 142 weeks of President Biden's term in office and has been continuously since March 2022. By the definition commonly used[ example needed ], the United States is energy independent.
In a 2012 poll of energy experts by Foreign Policy magazine, almost two-thirds of respondents said energy independence was not a sensible goal. [37]
Highlighting the difficulty of separating domestic and foreign oil sources, journalist Robert Bryce stated in 2008 that "the trends of energy interdependence are growing and are inexorable" and branded the idea of being able to choose where your oil came from as "hogwash".
The structure of the argument of critics is arranged as follows:
In 2008, Roger Howard [46] has argued [47] in The Wall Street Journal that oil dependence has significant benefits for the US and other oil-importing nations. First, the world's major oil exporters are highly dependent on their oil revenues, and fear rapid drops in the price of oil, such as occurred in late 2008 and in 2014/2015. Second, this fear restrains destructive actions by exporters: Howard cites the example of Russia's 2008 invasion of Georgia. Russia's stock market plunged, and "within a week capital outflow reached a massive $16 billion, suddenly squeezing domestic credit while the ruble collapsed in value." He also gives the example of Libya, where Muammar al-Gaddafi gave up his nuclear weapon program in exchange for the US lifting its economic sanctions, which had prevented Libya from increasing its oil production.
In 2008, Andy Grove argued that energy independence is a flawed and infeasible objective, particularly in a network of integrated global exchange. He suggests instead that the objective should be energy resilience: resilience goes hand in hand with adaptability, and it also is reflected in important market ideas like substitutability. Resilience is one of the best features of market processes; the information transmission function of prices means that individual buyers and sellers can adapt to changes in supply and demand conditions in a decentralized way. His suggestion for how to increase the resilience of the US energy economy is to shift use from petroleum to electricity (electrification), that can be produced using multiple sources of energy, including renewables. [48]
In 2008, former vice president Al Gore challenged the United States to commit to producing all electricity from renewable sources (AERS) like solar and wind power in 10 years. [49] [50] Both the Center for Resource Solutions and former president Barack Obama have publicly stated they support Al Gore's AERS goal. [51]
Canada is the world's second largest producer of hydroelectricity (after China) and exported three billion dollars worth of electricity to the US in 2015, mostly from the major hydro-producing provinces of Québec, Ontario, Manitoba and British Columbia. [52]
Petroleum is a naturally occurring yellowish-black liquid mixture. It consists mainly of hydrocarbons, and is found in geological formations. The term petroleum refers both to naturally occurring unprocessed crude oil, as well as to petroleum products that consist of refined crude oil.
A drop in oil production in the wake of the Iranian revolution led to an energy crisis in 1979. Although the global oil supply only decreased by approximately four percent, the oil markets' reaction raised the price of crude oil drastically over the next 12 months, more than doubling it to $39.50 per barrel ($248/m3). The sudden increase in price was connected with fuel shortages similar to the 1973 oil crisis.
Petroleum politics have been an increasingly important aspect of diplomacy since the rise of the petroleum industry in the Middle East in the early 20th century. As competition continues for a vital resource, the strategic calculations of major and minor countries alike place prominent emphasis on the pumping, refining, transport, sale and use of petroleum products.
The energy policy of the United States is determined by federal, state, and local entities. It addresses issues of energy production, distribution, consumption, and modes of use, such as building codes, mileage standards, and commuting policies. Energy policy may be addressed via legislation, regulation, court decisions, public participation, and other techniques.
Petroleum production in Canada is a major industry which is important to the overall economy of North America. Canada has the third largest oil reserves in the world and is the world's fourth largest oil producer and fourth largest oil exporter. In 2019 it produced an average of 750,000 cubic metres per day (4.7 Mbbl/d) of crude oil and equivalent. Of that amount, 64% was upgraded from unconventional oil sands, and the remainder light crude oil, heavy crude oil and natural-gas condensate. Most of the Canadian petroleum production is exported, approximately 600,000 cubic metres per day (3.8 Mbbl/d) in 2019, with 98% of the exports going to the United States. Canada is by far the largest single source of oil imports to the United States, providing 43% of US crude oil imports in 2015.
Energy in the United States is obtained from a diverse portfolio of sources, although the majority came from fossil fuels in 2021, as 36% of the nation's energy originated from petroleum, 32% from natural gas, and 11% from coal. Electricity from nuclear power supplied 8% and renewable energy supplied 12%, which includes biomass, wind, hydro, solar and geothermal.
Energy security is the association between national security and the availability of natural resources for energy consumption. Access to cheaper energy has become essential to the functioning of modern economies. However, the uneven distribution of energy supplies among countries has led to significant vulnerabilities. International energy relations have contributed to the globalization of the world leading to energy security and energy vulnerability at the same time.
Energy in Kazakhstan describes energy and electricity production, consumption and import in Kazakhstan and the politics of Kazakhstan related to energy.
Petroleum has been a major industry in the United States since the 1859 Pennsylvania oil rush around Titusville, Pennsylvania. Commonly characterized as "Big Oil", the industry includes exploration, production, refining, transportation, and marketing of oil and natural gas products. The leading crude oil-producing areas in the United States in 2023 were Texas, followed by the offshore federal zone of the Gulf of Mexico, North Dakota and New Mexico.
Oil reserves in Canada were estimated at 172 billion barrels as of the start of 2015 . This figure includes the oil sands reserves that are estimated by government regulators to be economically producible at current prices using current technology. According to this figure, Canada's reserves are third only to Venezuela and Saudi Arabia. Over 95% of these reserves are in the oil sands deposits in the province of Alberta. Alberta contains nearly all of Canada's oil sands and much of its conventional oil reserves. The balance is concentrated in several other provinces and territories. Saskatchewan and offshore areas of Newfoundland in particular have substantial oil production and reserves. Alberta has 39% of Canada's remaining conventional oil reserves, offshore Newfoundland 28% and Saskatchewan 27%, but if oil sands are included, Alberta's share is over 98%.
Within the petroleum industry, proven crude oil reserves in the United States were 44.4 billion barrels (7.06×109 m3) of crude oil as of the end of 2021, excluding the Strategic Petroleum Reserve.
Energy security of the People's Republic of China concerns the need for the People's Republic of China to guarantee itself and its industries long- term access to sufficient energy and raw materials. China has been endeavoring to sign international agreements and secure such supplies; its energy security involves the internal and foreign energy policy of China. Currently, China's energy portfolio consists mainly of domestic coal, oil and gas from domestic and foreign sources, and small quantities of uranium. China has also created a strategic petroleum reserve, to secure emergency supplies of oil for temporary price and supply disruptions. Chinese policy focuses on diversification to reduce oil imports, which used to rely almost exclusively on producers in the Middle East.
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Energy in Libya primarily revolves around the production, consumption, import, and export of energy, with a significant focus on the petroleum industry, which serves as the backbone of the Libyan economy. As of 2021, Libya is recognized as the seventh-largest crude oil producer in OPEC and ranks third in total petroleum liquids production in Africa. The country holds 3% of the world's proven oil reserves and 39% of Africa's, marking it as a key player in the global energy sector. Despite its abundant resources, the energy industry in Libya has faced significant challenges due to political instability following the civil war that began in 2011. These challenges have led to frequent disruptions in oil production and exports, directly impacting the national economy and its contributions to the global oil market. The sector's future is closely tied to the resolution of political conflicts and the effective management of its vast hydrocarbon resources.
Energy in Algeria encompasses the production, consumption, and import of energy. As of 2009, the primary energy use in Algeria was 462 TWh, with a per capita consumption of 13 TWh. Algeria is a significant producer and exporter of oil and gas and has been a member of the Organization of the Petroleum Exporting Countries (OPEC) since 1969. It also participates in the OPEC+ agreement, collaborating with non-OPEC oil-producing nations. Historically, the country has relied heavily on fossil fuels, which are heavily subsidized and constitute the majority of its energy consumption. In response to global energy trends, Algeria updated its Renewable Energy and Energy Efficiency Development Plan in 2015, aiming for significant advancements by 2030. This plan promotes the deployment of large-scale renewable technologies, such as solar photovoltaic systems and onshore wind installations, supported by various incentive measures.
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Washington state has the fifth highest oil refining capacity of any state. As of 2018, there are 5 refineries in Washington state with a joint capacity of 637,700 b/d. They are, in order of greatest b/d capacity, Cherry Point refinery, Puget Sound refinery, Marathon Anacortes refinery, Ferndale refinery and U.S. Oil refinery.
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