Continuing its remarkable pace, Bank of America confirmed that the United States is still the number one producer of oil worldwide. Last year, the US became the leader in total oil production, which includes natural gas liquids and biofuels (see graph). Crude oil production rose some 60% in the first quarter of 2014, surpassing 11 million barrels per day (MMbd) and barely besting Russia and Saudi Arabia who are second and third respectively.
Is the recent production push sustainable? And, is an energy independent future on the horizon? Yes, and maybe, though with some reservations. According to the International Energy Agency (IEA), the US is projected to hold the top spot for the better part of the next two decades, with crude oil production plateauing in 2019 at just over 13 MMbd. This is coupled with weaker than anticipated production growth worldwide. Natural gas follows a similar path and the US is expected to be a net exporter by 2018.
Domestic production from all sources now meets 84% of total US energy demand, up 15% from the historical low in 2005. Still, petroleum and liquid fuel imports account for approximately 40% of annual oil consumption. Higher energy prices and fuel efficiency measures have helped reduce demand, but not substantially. The Energy Information Administration (EIA) predicts an import share of, at best, 25% through 2040. In short, an energy independent future does not lie underground.
Looking forward, the solution is seemingly at hand—though politically and economically disadvantaged. The EIA estimates the share of renewables in total energy production will grow only 1% by 2040; a laughable figure even considering the disproportionately massive gains in natural gas and oil production. The Environmental Protection Agency’s recent Clean Power Plan aims to make coal less competitive, but several states are already planning legal action. A tragedy of the commons is at play and the actors cannot be faulted for their largely rational decisions. However, absent greater fuel-efficiency and a more renewables-friendly energy policy, energy independence will be just beyond reach.