Balance Point: The US Cruises Towards (Net) Energy Independence
The US is now exporting so much crude oil, petroleum products, coal, and natural gas (both by pipeline and LNG), that the country’s net energy dependency has now fallen below 10% of its total consumption, in the first five months of 2017. The trend towards (net) energy independence is a retort to the historic assumption of US vulnerability in fulfilling its energy needs.
In just the past ten years, the country’s energy deficit — its net imported energy as a percent of total consumption — has fallen from 30% in 2006 to this year’s average of 9.2%. With further export growth of natural gas a certainty; a sustained lack of growth in US domestic energy consumption; and soaring production from new wind, solar, natural gas and oil; it’s now possible to ask the following question: when does the US reach its balance point, when all imports are matched by exports?
To express this net dependency in terms of data, the US consumed a total of 40.236 quadrillion btu (quads) of energy through May of this year; imported a total of 10.805 quads; but exported a total of 7.098 quads of energy during the same period. In the balance sheet calculation, we take the difference of the export and import figures (10.805–7.098 = 3.707), and divide the result by total consumption (3.707/40.236 = 9.2%) to produce the net dependency percentage.
Many will point out that underneath this calculation lies a continuing dependency on imported oil. That’s true. But even here, the trend is pretty clear: with US consumption of oil currently still below levels of the year 2000, the country is expected to achieve new, all time highs of domestic oil production near 10 mbpd next year, according to EIA forecasts. US oil production is bolting higher. US oil consumption is not.
The US Energy Information Agency (EIA) is already forecasting that US oil consumption will enter decline starting in the year 2020. That also happens to be the year that the price of Electric Vehicles (EV) will start to arrive in the affordability window, competing more directly with gas-powered cars. The steady upward march of fuel efficiency in light duty vehicles, and, modern building codes — delivering a new round of efficiency gains — are also playing a role.
All that’s required for the US to reach the balance point in energy is the continuation of current trends: exporting surpluses of rising natural gas production; dialing back the growth of oil consumption; increasing oil production; adoption of EV at the margin of the automobile market; and last but not least: soaring new electricity supply from US sourced wind and solar.
To the extent that new electricity supply from wind and solar is already making its way into transportation, through EV, the US now possesses the formula to attack transportation demand at the margin using domestically sourced energy. It’s a certainty that EV charging will take advantage of wind power surpluses (at night for example, in states like Texas) and eventually solar surpluses mid-day, in states like California. The US is going to reach its balance point easily by the year 2025, if not sooner. Indeed, by 2025, the US may have already turned net energy exporter.
(This post is adapted and updated from the August 1, 2017 TerraJoule.us Newsletter)
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Originally published at gregor.us on August 30, 2017.