The United States is on its way to energy independence. Richard Nixon was sure it could be done by 1980. Gerald Ford was positive it would be possible by 1985. Jimmy Carter was a bit more reserved, hoping to be 50 per cent independent by 1985. George Herbert Bush wanted to cut oil imports by a third by 2010. His son wanted to trim 75 per cent of its Middle Eastern imports by 2025. Barack Obama? He expects the United States can cut oil imports by one-third by 2025.
Energy independence is, as Foreign Policy magazine once put it, the “last truly bipartisan policy.”
Policy, sure. Reality? Not so much.
Improved techniques to extract hydrocarbons from the ground has opened up new oil fields and revived old ones. So-called horizontal hydraulic fracturing – shortened to “fracking” – has Americans once again pumped about their chances of easing their reliance on outsiders for oil.
The United States hit a huge milestone in October last year, when it sucked out more oil than it imported for the first time in 18 years. The United States produced a total of about 7.72 million barrels of oil per day in October, according to the Energy Information Administration, which is part of the U.S. Department of Energy. In the same month, the country imported about 7.47 million barrels per day.
North Dakota and Texas are key states when it comes to surging oil production, which is crucial for the United States to wean itself off oil imports. Oil producers must frack rocks beneath the surface to get at this oil. First, energy companies drill the wells, then they shoot frack fluid – a mix of water, sand and chemicals – down the pipe at high pressure. The frack fluid forces fissures in the rocks, allowing oil and natural gas to flow freely into the well once the fracking process is finished.
North Dakota’s oil production isn’t a slow crawl. Its much-hyped Bakken formation play churned out 911,292 barrels of oil per day in November last year – a new record – according to the state government. (Production dipped to 862,987 barrels per day in December.) In November of 2012, North Dakota’s Bakken produced 671,050 barrels of oil per day; 443,870 barrels of oil per day in November of 2011; and 284,359 in November of 2010.
But any hope North Dakota, Texas and other states can cover the country’s oil demand is extremely low.
Net imports accounted for 40 per cent of petroleum – think products such as oil, gasoline and biofuels such as ethanol – consumed in the United States in 2012, according to the EIA’s latest statistics. This is the lowest annual average since 1991. Roughly 80 per cent of gross petroleum imports was crude oil, the EIA said. Canada is by far the country’s largest supplier, providing 28 per cent of the petroleum products imported into the United States. Saudi Arabia comes in second, supplying 13 per cent, followed by Mexico, Venezuela and Russia.
U.S. dependence on foreign oil peaked in 2005, and U.S. imports of petroleum and other liquids (such as propane and butane) will decline through 2020, the EIA said. However, imports will still provide approximately one-third of America’s total supply.
With the dream of complete energy independence looking unreachable for the United States, the definition has been refined to North American energy independence. This means the United States hopes oil – and other products like natural gas, natural gas liquids and other sources of energy – will come exclusively from the United States and Canada. (Some projections include energy produced in Mexico.)
In short, the United States will remain dependent on oil produced in Canada, whether from the oil sands or more conventional sources. And oil will not be enough. North America’s gas plays – regions where developers are also using fracking techniques to extract hydrocarbons – will play a role, too.