Depending on Energy, Not Energy Independent

January 9, 2013

Energy independence has long been the dream of American presidents. This is because independence entails freedom from the grip of countries around the world. It entails freedom from price shocks or supply shortages. However, as nice as energy independence sounds, it is an unlikely proposition considering the difficulty in producing domestic oil and the potential disadvantages of declining the many benefits that trade has to offer, says Kenneth P. Green, a senior fellow with Canada's Fraser Institute and a former resident scholar at the American Enterprise Institute.

  • According to the U.S. Energy Information Administration, the United States imports about 11 million barrels of crude oil a day.
  • In June 2010, the United States imported the most oil from Canada at 81,978,000 barrels.
  • In second was Saudi Arabia, at about 40 million barrels.

There are several reasons that the United States is unable to achieve complete energy independence. The first is that nearly all sectors in the American economy rely on fossil fuels. Biofuels and other renewable sources are not produced at a level high enough to replace the demand for fossil fuels.

Second, Americans have reached a consensus that domestic oil production is not worth the environmental harm. The American people have time and time again reaffirmed their desire to preserve environmental quality and as a result have lobbied to pass laws that limit on and offshore drilling.

Third, there are several benefits to trade. For example, the United States enjoys strong partnerships with about 90 different countries that it trades fossil fuels with. More importantly, trade allows the efficient allocation of resources and capital to more productive areas.

Furthermore, the United States also gains from trading because it exports oil products as well. The top two customers for oil exports are Canada and Mexico.

Source: Kenneth P. Greene, "Depending on Energy, Not Energy Independent," The American, December 17, 2012.

 

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