U.S. oil independence no longer a joke
By Christopher Swann
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
America imports some 10 million barrels of crude oil daily. Presidents have paid lip service to reducing this dependence since the 1970s. But as drivers shun gas guzzlers and U.S. production rises, imports could be cut in half this decade. Oil self-sufficiency could even be within reach.
In 1973 Richard Nixon became the first in a line of U.S. presidents to decry the nation’s reliance on overseas crude. At the time America bought just over a third of its oil from abroad, and Nixon believed it was possible to become self- sufficient by 1980. Instead, import dependence climbed to 60 percent by 2005.
To be fair, much of this deterioration was beyond the control of politicians. Aging wells meant that America’s oil production declined steadily after Nixon’s famous pledge — sliding almost 50 percent between 1970 and 2008. The national penchant for muscle cars and other gas guzzlers made the situation worse. By 2007, drivers were burning an extra 3 million barrels a day — a fifth more than in the early 1970s.
However, both of these trends have recently swung into reverse. All of a sudden America’s oil wells seem more fecund. Output from the Gulf of Mexico could increase by 1.7 million barrels a day by the end of the decade, research by Credit Suisse suggests. And more advanced oil recovery techniques are prolonging the life of geriatric wells and giving access to formerly inaccessible fuel.
Meanwhile, gasoline demand in the U.S. appears to have passed a peak. Already, this combination has caused import dependency to fall back to around half total consumption. If Credit Suisse is right, imports could be cut roughly in half by 2020.
And that’s with energy policy on auto-pilot. A more active Congress could, for example, choose to tax emissions in general or gasoline in particular. Those or other moves could promote conservation and a switch from oil to cleaner, domestically produced natural gas. Add that to the trends already in place and, 40 years on from Nixon’s target date, his dream of oil self-sufficiency just might come true.