Would Energy Independence Change Our Lives?

We're exporting petroleum products and lead the word in refining, thanks to facilities like the Anacortes Refinery in Washigton State. But does it really matter? Photo: Walter Siegmund

We're exporting petroleum products and lead the word in refining, thanks to facilities like the Anacortes Refinery in Washigton State. But does it really matter? Photo: Walter Siegmund

New federal statistics show that, for the first time since 1949, the United States is exporting more petroleum products than it’s importing.

Does your life feel any different?

This is something of a trick question, as we’ll explain in a moment. But this goes to the heart of the long debate about “energy independence.”

The United States is still a net importer of crude oil, as it has been for decades. What’s happening is that we’ve become an exporter of refined petroleum products, particularly “distillate fuels” like diesel. Globally speaking, demand for those fuels has been rising, and that’s worked to our benefit, since the United States is still the world’s largest refiner of oil. We’re turning oil into the refined products the world actually needs, even if most of the oil is drilled elsewhere. And not all the oil that comes here, stays here – sometimes it gets refined and sold elsewhere.

U.S. petroleum imports and exports

In the last year, the U.S. has become an exporter of petroleum products (but still an importer of crude oil). Source: EIA

 

And yet gasoline prices remain near $4 per gallon, and tensions over Iran threaten to disrupt the world’s supply of crude, not to mention the global economy. So if prices are up and tensions remain high, what does being a petroleum products exporter really mean?

One thing is that it shows how one of the favorite promises of American politicians, “energy independence,” may not actually do us much good. It’s true that much of the world’s oil supply lies in the Middle East and other regions that are unstable, unfriendly to the United States, or both. That’s a risk not just to the United States but to the world economy. It’s no wonder many people argue that the less we import, the safer we’ll be as a nation.

But it’s also true that the United States gets half of its oil from the Western Hemisphere, and our two biggest suppliers are Canada and Mexico – hardly countries that are likely to cut us off. In fact, organizations as varied as the Brookings Institution and the Cato Institute  say that real energy independence may never be possible, given the way world energy markets work. Oil, in particular, is sold on open global commodities markets. The price goes up and down depending on supply, demand, weather, political upheaval – just about any factor you can mention. And while that means oil prices can shoot up when the news is bad, it also means that much of the time oil is cheaper than it would be if we didn’t import it.

We could, of course, impose additional trade barriers to discourage exporting petroleum products. But that would also hurt our trade balance, not to mention potentially raise petroleum prices at home rather than lower them.

After all, when was the last time the United States was self-sufficient in energy? Think Elvis. Think Sputnik. Think huge cars with tail fins. The year was 1957, and the situation wouldn’t have persisted so long if it were easily fixed.

What is possible, the experts say, is energy security: minimizing the amount of energy we get from unstable sources, and increasing the amount of energy we get from stable ones. That means not only imports from allies but also increasing the use of alternative and renewable energy.

Despite all the hoopla over our dependence on foreign oil, the irony is that we’re probably already on a long-term trend where oil imports will decline. The Energy Information Administration projects that total energy imports will decline from 22 percent of our total needs in 2010 to 13 percent in 2035, as increased domestic production, higher energy efficiency standards and greater use of biofuels takes hold.

Given all that, maybe the question isn’t how much oil we import or export. It’s whether we have diversified sources of energy and stable supplies—and of course whether moving away from the fuels that are most damaging to Planet Earth.

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