Can The U.S. Achieve Energy Independence?

The International Energy Agency projects that the U.S. is set to become the world’s leading oil and natural gas production superpower. Is that realistic?

Last week I had articles published in both Forbes and the Wall Street Journal (WSJ) addressing a recent report from the International Energy Agency (IEA).

The IEA made headlines when it projected in its World Energy Outlook 2017 that the U.S. would be a net exporter of oil within a decade. The IEA also projected that the U.S. is set to become the world’s dominant oil and gas production leader for decades.

In a pair of articles that risk making peak oilers’ heads explode, I argued that “Yes, the U.S. could achieve energy independence.” However, it depends on how we define energy independence, and there are several important caveats.

Instead of republishing the articles here, I will simply link to them and hit the key points. The Wall Street Journal article is:

Is the U.S. On Track for Energy Independence? 

That Forbes article is more focused on numbers and trends:

Is U.S. Energy Independence In Sight?

Here is the key point. I was asked in 2005 whether the U.S. could achieve energy independence. I essentially answered that there was a near zero percent chance of that. At that time, U.S. net imports of crude oil and finished products like gasoline had reached a record 12.5 million barrels per day (BPD).

I then proceeded to watch U.S. shale oil ramp up, U.S. refineries start exporting finished products, and U.S. net imports fall by nearly 8 million BPD. My certainty began to waver. In fact, prior to the oil price crash of 2014, the U.S. was on a trajectory to reach zero net imports by 2019:

Net imports of crude oil and finished products plummeted from 2005 to 2015.

I would venture to say that virtually 100% of the peak oil camp would have been like me and deemed such a decline impossible in 2005. So, I have learned to be careful about what I declare to be impossible.

However, there are important caveats. One is the timing of peak shale oil production. I don’t have a good feel for that. It was climbing at a rate of a million BPD each year leading up to the price crash. How long could that last? I don’t really know. It’s possible it could have peaked before 2019, but the price crash made it a moot point.

Energy independence is likely influenced by oil prices. Imagine that oil prices are $150/bbl. That is going to destroy demand, and at the same time spur marginal oil production. Both of those factors would push the U.S. in the direction of energy independence, albeit at the potential cost of wrecking the economy.

Second, even if we do achieve energy independence, it will likely be fleeting. In other words, had we reached zero net imports by 2019, we would still be facing a shale oil peak at some point. Then, the U.S. would once again start to become dependent on foreign producers for our oil.

That is unless demand can be curbed. I mentioned this near the end of the WSJ article.

So, those are the high points. I discuss definitions and caveats in those articles. But one thing the last decade has taught me. Be careful about saying “never.”

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7 thoughts on “Can The U.S. Achieve Energy Independence?”

  1. No doubt that the production of ETHANOL in the US to the tune of 1+ million bbls per day has helped us in our quest for energy independence.

    https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=W_EPOOXE_YOP_NUS_MBBLD&f=W

    According to the latest WASDE, we are cranking out RECORD Ethanol production And RECORD Corn yields attaining 175.4 bushels per acre. Therefore, we grind about a third of the corn crop to ethanol.. Feed and Export the remaining DDGS which amount to about a third of what we grind.. AND at the end of the year we have HALF of what we grind LEFT OVER to Carry INTO the next year..

    https://www.usda.gov/oce/commodity/wasde/latest.pdf

    And some think we will plant MORE acres next year.. while TREND corn yields continue to move higher approaching 200 bushels to the acre nation wide. Ethanol is CHEAPER than RBOB while we do this.

    https://www.agmanager.info/grain-marketing/grain-supply-and-demand-wasde/us-corn-yields

    No doubt this has aided our trade deficit while keeping more $$$ at home paying property taxes for schools as well as growing the US Economy vs helping OPEC’s.

    And we have cleaner air to boot.

    Ethanol is working.

    1. On a level basis, ethanol should be cheaper than gasoline because it has a lower energy content (26 vs 46 MJ/kg; compensating for this somewhat is gasoline is slightly less dense mass/volume).

      Nevertheless, take away ethanol’s tax credits and subsidies and it is questionable whether it is really cheaper. It’s certainly not cheaper on an energy content basis.

      From a pollution standpoint, cheap U.S. natural gas has helped to reduce the cost of ammonia based fertilizers, which is a driving factor in higher crop yields and unfortunately in field runoff of nitrogen pollutants (giving rise to dead zones in the Gulf of Mexico). With modern catalytic convertors, the cleaner air statement is not true. Accounting for land use, fertilizer production and fossil energy consumption for planting, harvesting, processing and delivering fuel ethanol, any reduction in CO2 emissions from ethanol displacement of gasoline is marginal at best.

      There is no question that ethanol technology has advanced and special interests have benefited (it’s working for them at least). Whether there is any net societal benefit is another question.

      1. Ya, quite a bit of misleading info here. First 100% ethanol is not utilized as a stand alone fuel, since the market has not built an engine that optimizes the fuel. Meaning all ICE are designed to burn either diesel or gasoline. Some heavy truck engine companies are just now starting to optimize natural gas. So, since ethanol production is merely 10% of gasoline it makes little economic investment sense to build an E100 engine. Also, the ethanol is best utilize more importantly to boost the fuel character of gasoline. This will allow slight improvement in combustion and engine efficiency and in modern engines that need higher octane. With this class of engine, there is no loss in mpg for the lower btu portion of ethanol. Meaning the ethanol boosts the fuel character of gasoline to the point that the blend achieves fuel parity with plain gasoline. Anyways, E10 sits at 97% of energy of gasoline depending if the gas is a winter or summer blend. E85 sits at 73%-83%. E100 is 110 octane stuff. This is the reason it is commonly used as race fuel additive.

        Life cycle rating of ethanol replaces 70% of gasoline. That is an old figure and I’m quite sure it is well above that. That includes farm tractors, fertilizer, and the rest. Carbon rating of ethanol varies from process plant to plant but well in the 50% zone and dropping as cellulosic portion is projected to increase. Process plants are on a steady path of improvement as compared to petrol steady decline.

        Last I read the dead zone primary contributor or problem was municipal storm runoff. This includes all the grass turf over fertilization. Farming technology works to minimize this cost and has been very successful at it.

        Petrol is the tax credit champ. Ethanol has just the standard business tax law. The credit ended many years ago. The RFS is just a guarantor of market place. Petrol owns the supply of motor fuel, hence a regulation is required to avoid mischief. Remember all the politics to attempt to disband the reg as refineries were losing money. The latest accounting of actual data has refiners benefiting from the sale of ethanol. Ethanol is extremely cost effective octane boost. Refer to recent Well Fargo study.

  2. We are bathed daily with roughly 120 watts per square meter provided free by a fusion reactor located a safe 93 million miles away. And we have the technology to tap and store it, which is getting better and cheaper every day.
    So why are we fighting trillion-dollar wars to secure another form of energy?

    1. Practically speaking, let’s consider using a PV solar powered hair dryer.

      Ignoring efficiency of conversion, transmission, etc., it would require 9 or so m2 of solar panels to gather the energy needed. Say you wanted to blow dry your hair early in the morning when it’s dark outside, solar energy is not available. It needs backup. Adding storage to get around this problem reduces efficiency further as efficiency is lost during every transformation step, thereby doubling needed collection area and dramatically increasing installation cost. Then consider you really wanted to take a hot shower along with washing your hair. You wanted your house’s temperature to remain comfortable. You wanted your refrigerator and other appliances to run all night and when needed. Solar doesn’t cut it.

      The fact is, solar energy is diffuse, not energy dense at all. It’s not reliable; we know it doesn’t work at night, but it also doesn’t work well during cloudy days or for other practical reasons, panel coverage by dust, bird droppings, snow, etc.

      Further, solar energy potential changes with seasons. It shouldn’t even be considered at all for most applications at high latitudes. It wouldn’t be worth fighting over.

      1. RVs have moved to solar power for charging batteries. They have extra capacity for cloudy days and a back up generator for the seldom emergency. Solar gets high praise for keeping batteries in tip top recharge state. Better than generator as it is very inefficient to run a generator the long and low wattage time periods. Yes, these campers enjoy off grid camping with all the luxuries of home. They do use propane for water and space heating. It’s about even with propane vs electric fridge. I myself use 12v dc as much as possible. The power is more efficient for lighting and electronics. It is nice to have a complete solar system as a backup for home emergency. It’s easy justified in RV and just a bonus for home. I’m retired now and thinking of cutting the cord with grid power at home too. It’s not that difficult nowadays. Best for home solar is to utilize as much natura gas for energy needs including water heater and clothes dryer. Schedule high energy needs such as clothes washing for high solar days. Good to utilize wood stove for supplemental heat. If well water pump needed you will have to get a step up transformer. It’s would be wonderful to have no electric company bill.

  3. Robert back a decade we imported 30 quadrillion BTUs a year of energy (~30% of our use). In 2017 we will import approximately 9.5 quadrillion BTUs of energy. I think that by the end of 2027 we will import zero quadrillion BTUs on a net basis

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