Remember a couple of weeks ago when you read about how Mitch McConnell and Sarah Palin threw a huge party to celebrate America’s newfound “energy independence”? No? That’s weird, maybe they forgot to invite the media.
The U.S. Energy Information Agency projected earlier this month “that the United States will be the world’s top producer of petroleum and natural gas hydrocarbons in 2013, surpassing Russia and Saudi Arabia.”
You’d think that would make Republicans — who’ve been chanting “Drill, baby, drill!” for years — very happy. Democrats too, as most of them buy into the “energy independence” framework as well.
But no one celebrated because there is nothing much to celebrate.
First of all, we can’t achieve independence from foreign oil when we consume so much more than we can ever possibly produce. Even though American production is increasing, we remain the world’s largest petroleum consumer. According to the EIA, in 2012 we produced 11.1 million barrels of oil per day, while consuming 18.5 million barrels. In other words, we were a net importer of 7.4 million barrels per day, accounting for 40 percent of our total consumption. While that’s the lowest percentage since 1991, it actually paints an unduly rosy picture. Fifty-seven percent of that oil we “produced” last year was not actually extracted in the U.S.; it was just refined here after being imported. That means the gap between what we drill and what we burn is even greater than the production numbers suggest. We can never drill our way to energy independence. We will only produce as much as we use if we use a lot less.
Even if we could ramp up production to exactly as much oil as we consume, we’d still have a problem: There is no such thing as “foreign oil.” It’s all just oil, and the prices are set by global supply and global demand. That means supply interruptions in Russia or Saudi Arabia, or increasing demand in China, will still cause the prices we pay at the pump to go up. ExxonMobil isn’t giving its oil away to Americans, it’s selling it to the highest bidder.
“Dependence on foreign oil” is an economically illiterate idea. What we suffer from is dependence on oil, and other fossil fuels, period.