American energy independence is a phrase you hear tossed around by politicians from time to time. They will run on such a platform but always fail to deliver. But exactly what is American Energy Independence, and what does it mean for you?
The term, American Energy Independence, came to light in the early 70’s during the Arab oil embargo of 1973 when the nation got a rude wake-up call from the Middle East. It resulted from politics and war in an unstable region of the world. America and some of its allies were cut off as a result of their affiliation with Israel. The embargo caused economic chaos, inflation, and long lines at the gas pumps. It was abundantly clear the American way of life could not be sustained. The days of big, gas-guzzling cars were over. A new era of conservation dawned, and not by choice.
However, the realization that so much chaos and calamity could be caused by such countries figuratively slapped Americans in the face. Coming off successes as World War II, a bustling economy, as well as land several men on the Moon, Americans were unprepared to be bullied and almost brought to their knees by some country from the Middle East. It exposed a vulnerability they were unfamiliar with. The idea of becoming independent from foreign countries was born.
Thus, it would be fair to define “energy independence” as such a state where the nation could generate all its energy needs independent of foreign markets and geopolitical influences.
What Have We Done and Where Are We Now?
The most profound change brought about by the embargo of ’73 would have to be a shift in thinking for the country as a whole. The word “conservation” entered the lexicon as thermostats were turned down in the winter and driving was curtailed. Oil prices leaped from $3 a barrel to $12. That would be dream prices today, but a 400% increase was devastating to the economy. Smaller cars found their way into the market, especially from Japanese auto makers. More efficient construction of homes and businesses with better windows, doors, and insulation assisted the conservation of fuel. Americans were educated in the ways of fossil fuels, most notably that they were finite, and a large portion of them were controlled by countries that wouldn’t hesitate to use that fact against them.
Since the 90’s with the modern environmental movement, the word “sustainable” has appeared in the search for alternative fuels. The search is on for renewable energy sources that do not include fossil fuels. Some of these have included nuclear energy, solar, more hydroelectric, and wind-generated sources. Research into different types of bio and synthetic fuel sources continues to progress, as well.
Using 2009 data, the United States energy sources are as follows:
Petroleum products (oil and gasoline): 37%
Natural Gas: 25%
Coal: 21%
Renewable sources: 8%
Nuclear: 9%
For a further breakdown into consumption sectors visit for more information.
It is clear America is still overwhelmingly powered by fossil fuels (83%). This is not likely to change anytime in the near future despite legislation, regulations, and rising prices. Nuclear fuels bear the risk of accidental contamination, and renewable sources are still in their infancy. Research is progressing for safer nuclear plants and options and for more efficient and cost-effective renewables.
Imports and Usage
America’s crude oil usage is currently at roughly 19 million barrels per day, about a five percent drop of just a few years ago. That translates into roughly 6.9 billion barrels per year. America currently (as of 2013) imports 3.5 billion barrels per year, a little more than a third of its usage. The Energy Information Administration (EIA) projects 2014 imports to be about 32%, just under a third of the country’s usage.
America is importing less for two reasons. First, usage is declining, and second, domestic production is increasing. It is reasonable to assume that at some point in the future, America will become a net exporter of crude.
That would be a boom for the economy, but would it make the U.S. energy independent? From all accounts using today’s thinking, the answer is no, and is likely to remain that way. The following links affirms most political and economic thinking:
http://www.cbo.gov/publication/43012 and
http://www.washingtonpost.com/blogs/wonkblog/post/oil-independence-is-an-impossible-dream/2012/05/10/gIQAy2EoFU_blog.html
What these publications conclude is that the United States, at best, would only help alleviate disruptions. Our benefit would come economically from domestic revenues and export fees. Even were the U.S. to generate all its energy needs, Americans would still be beholden to the same forces that direct retail prices today.
Three words control the energy fate of all Americans, Global Energy Market.
But are the “experts” blinded by a singular global marketplace? Is it really a good goal to be energy interdependent with the rest of the world instead of getting America’s own house in order first?
Next: New Perspectives and Alternatives
Further reading on the 1973 Arab Oil Embargo can be found at the following:
http://history.state.gov/milestones/1969-1976/oil-embargo
http://www.actionforex.com/articles-library/financial-glossary/1973-oil-crisis-20041204320/
More on Energy Independence,
http://www.forbes.com/sites/lorensteffy/2014/02/28/why-energy-independence-is-the-wrong-goal-for-the-u-s/
