• 4 minutes The Federal Reserve and Money...Aspects which are not widely known
  • 8 minutes How Far Have We Really Gotten With Alternative Energy
  • 12 minutes  What Russia has reached over three months diplomatic and military pressure on West ?
  • 2 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 5 days Coincidence of EIA Report Delay? - "I had seen it delayed minutes, and a couple of times a few hours, but don’t recall something like this — do others?" asks Javier Blas
  • 3 days European Parliament Members, Cristian Terhes et al, push back against Totalitarian Digital ID and Carbon Tyranny in Europe.
  • 14 hours Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
  • 2 days "How Long Will The Epic Rally In Energy Stocks Last?" by Tsvetana Paraskova at OILPRICE.COM
  • 5 days "...too many politicians believe things that aren’t true." says Robert Rapier
  • 6 days Demonising fossil fuels has caused major grid problem in Australia
  • 6 days Welcome to Technocracy - The New World Energy Order... "1000s Of Sydney Homes Plunged Into Darkness As Aussie 'Price Cap' Policy Sparks Energy Shortage"
  • 7 days "How to Calculate Your Individual ESG Score to ensure that your Digital ID 'benefits' and money are accessible"

Breaking News:

Oil Likely To Hit $200: SEB Group

Robert Rapier

Robert Rapier

More Info

Premium Content

Is U.S. Energy Independence Realistic?

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:

(Click to enlarge)

Net imports of crude oil and finished products plummeted from 2005 to 2015. Related: Oil Price Drop Imminent If Moscow Says “No” To Extension

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. Related: Are Autonomous Cars Ready To Ditch The Backup Driver?

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.”

By Robert Rapier

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment
  • steve on November 21 2017 said:
    Your analysis then... and now... appear to be based on the supposition that what we know today is all we will ever know.

    I would say that this history of the US oil & gas business will show you that is never the case.

    Ever.
  • Daniel on November 21 2017 said:
    If you are increasing shale/tight oil at a loss year after year, sure the US could be energy independent. In 2014 the top 24 of the 25 largest shale oil producers were losing money. The drill for a loss kept going on due to ZIRP (zero interest rate policy) money & equity money from wall street that kept coming in due to shale oil being hyped regarding EUR's, etc etc. The story lacks important information regarding economics. Regards.

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News