From: Daily Finance
By: Travis Hoium
Americans have never shied away from burning oil. We like big vehicles and horsepower; accordingly, cheap gasoline has fueled a reliance on imported petroleum.
Except for a short blip after the oil crises of the 1970s, when fuel-efficient cars became all the rage, oil imports have risen steadily for the past four decades. But only when gas prices also started to rise, leading up to the most recent recession, did we really start to care about how much oil we were importing.
Between the “Drill Baby, Drill” political banter and the near-constant drone about our “reliance on foreign oil,” you might think that the U.S. is in an energy crisis.
What Crisis?
That was true: From 1973 to 2005, net oil imports rose from 6,025 barrels per day to 12,549 barrels per day, or 60.3% of our consumption. But that’s not the story any more. In fact, it may not be long till we can tell the Middle East: You’re fired!
Our dependence on foreign oil is actually falling, and the day we can rid ourselves of oil from the Middle East may now be on the horizon.
While politicians talked about how burdensome regulations were, and how we should expand drilling to reduce our dependence on foreign oil, a magic thing happened: We started importing less oil.
From 2005 to 2011, the percent of oil we net import has fallen from 60.3% of consumption to 47% of consumption.
|
Year
|
Net Imports (thousands per day)
|
Total Consumption (thousands per day)
|
Percent Net Oil Imports
|
|
2005
|
12,549
|
20,802
|
60.3%
|
|
2006
|
12,390
|
20,687
|
59.9%
|
|
2007
|
12,036
|
20,680
|
58.2%
|
|
2008
|
11,114
|
19,498
|
57%
|
|
2009
|
9,667
|
18,771
|
51.5%
|
|
2010
|
9,440
|
19,148
|
49.3%
|
|
2011
|
8,908
|
18,946
|
47%
|
*Source: EIA.
In the meantime, as people were talking about high oil prices, the industry started taking advantage of new technologies to extract oil profitably and domestically.
Oil shale became all the rage, as companies from Kodiak Oil & Gas (KOG) to Continental Resources (CLR) started drilling wells as fast as they could. And even though it’s only made a small dent, offshore drilling hasn’t hurt, either. From 2005 to 2010 the amount of crude oil coming out of the Gulf of Mexico increased by 334,000 barrels per day. As drillers like Seadrill (SDRL), Transocean (RIG), and DryShips (DRYS) add more deepwater rigs to their fleets, the Gulf of Mexico should continue to add to our oil supply.
Ohhh, Canada!
Shale and offshore drilling haven’t been alone in reducing our reliance on Middle Eastern oil. Oil sands in Canada could replace much of the oil supply now coming to us from across the Atlantic.
According to the Canadian Association of Petroleum Producers, the Canadian oil sands yielded 1.47 million barrels of oil per day in 2010. That number’s expected to jump to 3.7 million barrels per day by 2025. That growth has helped make Canada our No. 1 oil supplier, providing 26.9% of our oil in 2010, up from just 17.4% in 2005.
The Mysterious Case of the Disappearing Demand
As oil started to flow from new sources in North America, another strange thing happened: Oil consumption began falling. Yes, the recession hurt demand, but demand has fallen every year since 2005, and overall consumption is down 8.9% over that time.
That trend should continue as vehicles get more efficient in the U.S. Ford (F), General Motors (GM), and other auto manufacturers recently agreed to increased fuel efficiency standards that will keep the downward consumption trend going. By 2025, the company’s fleets of cars and light trucks will have to achieve 54.5 miles per gallon on average, saving another 2.2 million barrels of oil per day.
We Don’t Need Your Stinkin’ Oil
In 2010, we imported 1,711 thousand barrels of oil from the Persian Gulf, a decrease of 26.7% from 2005. OPEC imports, which include Venezuela and Nigeria, have also fallen 12.2% over that time.
As efficiency rises, oil shale and offshore production increases, and countries like Canada and Brazil step up production, we may finally be able to stop sending our money to the Middle East for oil.
At the very least, we’re headed in the right direction. And with countries like China increasing demand and importing more oil (which, I’ve pointed out, could lead to an energy crisis in that country), this change may have arrived just in time
Leave a Reply