Every president since Richard Nixon has pushed to cut U.S. dependence on imported oil, and President Barack Obama is no exception. Now, though, for the first time in 30 years, oil imports are falling in a significant way.
New drilling technologies perfected in the last several years have unlocked enormous domestic reserves of crude oil and natural gas. Policies that mandate increasing use of renewable fuels and better fuel economy for the nation's cars and trucks have helped slash oil and gasoline demand.
That has translated into a dramatic reduction in oil imports and a dramatic increase in diesel and gasoline exports.
Obama wants the country to go much further. But even if the U.S. succeeds in reducing oil imports even more, it won't reduce the price Americans pay at the pump because oil and gasoline are global commodities.
The campaign promise:
"We can cut our oil imports in half by 2020," Obama told the Democratic National Convention on Sept. 6, 2012. That would mean net imports of crude and fuels would sink to 3.7 million barrels per day by the end of the decade, from 7.4 million barrels per day last year.
This is entirely possible. Fuel economy standards adopted during Obama's first term and set to go into effect in 2017 will keep a lid on gasoline demand even if the economy begins to grow fast. Renewable fuel standards adopted in the George W. Bush administration will have a similar effect by requiring ever-increasing amounts of biofuels to be blended into gasoline.
At the same time, domestic oil production is expected to continue to grow, propelled by improving technology, high global oil prices and the continued exploitation of enormous reserves in several Western states and in the Gulf of Mexico.
This trend is already under way. Falling imports of crude and rising exports of gasoline and diesel have helped cut net petroleum imports by one-third since 2008.
The nation's newfound reserves of natural gas could also help. Delivery trucks, garbage trucks and some long-haul trucks are beginning to switch to cheaper natural gas and away from oil-derived diesel. And several companies are applying for permits to export natural gas to Europe and Asia, which would help offset the economic cost of importing oil.
Republicans argue this emerging trend could be sped up if the administration opened more federal land, both onshore and offshore, to drilling. It's possible, but oil and gas companies do not have a shortage of new places to explore, so it's unclear just how much effect this would have, analysts say. Also, while domestic oil production from federal lands dipped in the aftermath of BP's Deepwater Horizon explosion and oil spill in 2010, oil production on federal lands is up since Obama took office.
Lower imports and higher production help reduce the nation's yawning trade imbalance. And it helps protect the economy from high oil prices because more of the income from those higher prices flows to U.S. companies instead of foreign ones.
But the U.S. economy won't ever be free from the effect of high oil prices. That's because oil and gasoline are crucial to the U.S. economy and the market for them is global. If turmoil in the Middle East disrupts oil production there, prices worldwide — including for drivers in the U.S. — will rise, even if the U.S. gets little or no oil from the Middle East. Rising gasoline prices hurt the economy by taking spending money out of consumers' wallets, and consumer spending accounts for 70 percent of the U.S. economy.
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