A new report from Securing America’s Future Energy (SAFE) debunks the myth about America’s oil boom leading to energy independence.
The SAFE study, The New American Oil Boom: Implications for Energy Security, comes on the heels of recent reports that increased domestic petroleum production – made possible through technological innovations such as hydraulic fracturing, enhanced oil recovery and improvements in offshore oil production – could make the United States energy independent over the next few decades. “The nature and meaning of energy independence, however, is widely misunderstood,” the authors of the SAFE report state. “Although increased domestic oil production will have clear positive effects on the U.S. economy, it alone will not insulate America from the risks of oil dependence. This can only be accomplished by reducing the role of oil in our economy.”
The report correctly notes that while increased U.S. domestic petroleum production will have positive benefits for the U.S. economy (e.g., narrowing the U.S. trade deficit), the United States will still be vulnerable to oil price spikes since oil is a globally traded commodity with prices set by the international market. Consequently, while the United States continues to reduce its reliance on Middle East oil, U.S. security will still be tethered to developments in the Middle East given that events in the region can have immediate and lasting impacts on the price of oil, which has implications for the United States. The only solution, the authors note, is to move away from reliance on oil – that is, diversify our liquid fuel sources, particularly in the transportation sector.
