"The United States Could Be Energy Independent."
No. This massive new U.S. oil and gas output has brought talk of American energy independence back into vogue. Energy economist Adam Sieminski, the new EIA administrator, captured the shift in a February interview: "For 40 years, only politicians and the occasional author in Popular Mechanics magazine talked about achieving energy independence," he observed. "Now it doesn't seem such an outlandish idea." The numbers would appear to back up this sentiment.
Just five years ago, the experts were bracing for the United States to become dependent on imported liquefied natural gas, with uncertain geopolitical consequences, such as dependence on vulnerable Middle Eastern suppliers and entanglement in a global gas market in which Moscow plays a troubling role. That now seems like ancient history, as record gas production has spared the United States the need for large-scale imports. According to one only somewhat hyperbolic headline, "We've Fracked So Much Gas We've Got No Place to Put It."
The math is shakier when it comes to oil. The most bullish projections foresee around 15 million barrels a day of U.S. liquid fuels production by 2020, while the consultancy Wood MacKenzie claims that U.S. production could rise to about 10 million barrels a day by the close of this decade and 15 million before the end of the next. In any case, U.S. consumption is vastly greater. As of 2009, Americans burned through nearly 19 million barrels of oil-based liquid fuels each day to power their cars, trucks, and factories, and although that figure has edged down over the past couple of years, domestic supply is still a long way from matching U.S. demand.
That said, U.S. demand for oil appears to have peaked. While part of the recent fall can be chalked up to slow economic growth, sustained high oil prices and improving automobile technology are also at work. New fuel- economy standards, if they stick, could drive U.S. consumption down much further. Ultimately, though, it's a massive stretch to think the United States will eliminate the gap between oil supply and demand anytime soon.
In any case, energy independence requires more than impressive arithmetic. As long as the United States is fully integrated into the world oil market, U.S. fuel prices will rise and fall along with events on the other side of the globe -- say, a war with Iran. Greater domestic production will blunt the economic shock of rapidly rising prices -- better to suddenly be sending massive sums to North Dakota than to Saudi Arabia -- but because oil producers everywhere are relatively slow to spend their windfalls, skyrocketing prices could still knock the economy on its back.