The Truth About Energy Independence

People who grew up during the 1930s and '40s can remember a day when the United States produced more oil than the rest of the world combined.

Those days are gone. U.S. oil production peaked in the early 1970s. The current U.S. share of global oil production is less than 10 percent. As demand rocketed upward over the decades and domestic production fell, we became more dependent on imported crude oil and petroleum products. Today, imports supply nearly 60 percent of total U.S. petroleum demand.

Transportation's dependence on petroleum is almost total. What are the chances of restoring self-sufficiency in transportation energy? America's Energy Future, a report sponsored by the National Academy of Sciences, sheds some light on this question.  The best near-term option is greater fuel efficiency. By the 2030s, we could take a bite out of imports, given generous assumptions about developing alternative fuels, some quite carbon-heavy. Beyond the 2030s, the best hope is widespread vehicle electrification using battery-electric drives and/or fuel cells.

Let's look at some numbers. Total U.S. petroleum demand is 19.5 million barrels per day.  Total daily crude oil production from U.S. oilfields is a shade below 5 million barrels per day. Once you net out other factors - production of usable natural gas liquids, imports of gasoline and other refined products, and exports - yes, U.S. producers on the hunt for market advantages export some 1.8 million barrels daily in crude oil and refined products - net imports of liquid fuels total 11.1 million barrels per day, according to the U.S. Energy Information Administration (EIA).

By 2035, however, net imports are projected to fall to 10 million barrels daily, according to EIA. Demand is projected to rise to 22 million barrels per day, but that would be offset by higher domestic production - an extra million or so barrels from deepwater oil wells in the Gulf of Mexico and greater use of biofuels, chiefly ethanol. Fuel efficiency standards that are due to take effect in 2016 will save an estimated 2 million barrels per day.

Could the gap between domestic supply and demand be closed further? Let's say the coastal plain of the Arctic National Wildlife Refuge, the most biologically rich habitat in the circumpolar north, is handed over to oil companies. A what-if analysis published in 2008 by the U.S. Energy Information Administration projected, in a best-case scenario, maximum daily production of 1.45 million barrels daily by 2028.

If that projection is accurate, we would still need to find another 8.5 million barrels per day to close the gap by the 2030s. How much could be expected from offshore waters that no longer are under leasing moratoria? EIA's Annual Energy Outlook for 2009 provides a clue. Under business-as-usual, assuming that previously closed areas are open to leasing, EIA projects that offshore production in the lower 48 would total 2.7 million barrels daily by 2030. In a what-if analysis of reinstating the moratoria, production drops to 2.2 million - a difference of only 500,000 barrels.

Why the small difference? EIA explains that lifting of the moratoria is not the magic elixir that the "drill, baby, drill" brigades claim. "Conversion of the newly available (offshore) resources to production will require considerable time, in addition to financial investment," EIA notes.

How about liquefying coal? America's Energy Future figured that coal-to-liquids could produce the equivalent of 3 million barrels per day by the 2030s. To accommodate that production would require a 50 percent increase in U.S. coal production - from about a billion tons to a billion and a half tons every year. The likely air, land, and water impacts boggle the mind.

In addition, liquid fuel from coal results in more than twice as many life-cycle carbon dioxide emissions as gasoline. If carbon sequestration proves impractical, scaling up coal-to-liquids production would put paid to any reasonable prospect of stabilizing the atmosphere's concentration of heat-trapping gases.

Ethanol? America's Energy Future estimates the equivalent of 1.7 million barrels daily might be doable by the 2030s. There are issues, however. Ethanol would need its own pipeline network. Ethanol from cellulosic sources is more expensive than coal-to-liquids.

Could shale help close the gap? Oil shale is the low-grade hydrocarbon mermaid that has flashed come-hither looks at fossil fuel champions for decades. Oil shales are sedimentary rocks bearing kerogen that could be converted into refinable hydrocarbons by heating. Estimates put the recoverable quantity of shale oil in the central Rockies at 800 billion barrels. That's more than a century's worth of current domestic oil consumption - provided it's feasible to extract the stuff at a profit. That's a big if. Technological and economic issues with shale production remain unresolved. Production would require lots of water, always a fighting issue in the arid West. EIA's energy outlook for 2009 figured oil shale production might hit 150,000 barrels per day by 2030, but EIA cautioned that the estimate was highly uncertain because of many technological and economic unknowns.

Bottom line: Weaning ourselves from overdependence on oil will take time. Doubling down on carbon-rich fuels wouldn't necessarily get us there, even if we throw environmental caution to the winds. Greater fuel efficiency and figuring out the nuts and bolts of electrified transportation would be a less risky approach.