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Trend shows American oil imports could be eliminated

The dream of North American energy independence is becoming increasingly possible, but increased supplies could cause world oil prices to fall, deflating the effort.
by Adam Wilmoth Published: July 6, 2012

Political and energy leaders for decades have talked about American energy independence.

Until the past seven years, however, the country increasingly became more dependent on foreign oil, not less.

The last time the U.S. produced all the oil it consumed was in 1949. Our thirst for foreign oil steadily increased until 2005, when it peaked at 13 million barrels per day, or about two out of every three barrels consumed in the country, according to the U.S. Energy Information Agency.

A nearly 50-year trend was then suddenly and dramatically reversed as the recession and conservation efforts have driven down demand while improved drilling techniques have allowed domestic producers to increase their oil output by about 1 million barrels per day over the past three years.

As a result, America's imports have dropped to just less than half the country's usage today.

Pavel Molchanov, an analyst for Raymond James Equity Capital Markets, spoke last month at the Oklahoma Independent Petroleum Association's annual conference. He said domestic producers likely will recover an additional 1 million barrels per day each year for at least the next three years.

If those figures hold, America's oil imports could drop to one-quarter the country's oil usage by 2014 and be effectively eliminated by 2020, Molchanov said.

The idea has been echoed by other experts and energy players.

British energy giant BP in February predicted North American energy independence by 2030. Continental Resources Inc. CEO Harold Hamm has said for months that North America would no longer import oil within 10 years.

Chesapeake Energy Corp. this week launched a “Declaration of Energy Independence” campaign, calling on people to sign a petition calling for the country to “use its vast natural resources to end its risky addiction to OPEC oil.” The Chesapeake plan calls for an increased use of natural gas, including electricity generation and fueling vehicles.

The potential benefits of energy independence are great.

Instead of sending billions of dollars a day to foreign governments — several of which we are in conflict with — the money would be used in the U.S. to hire American workers who spend their money and pay their taxes in this country.

But while there are many benefits to American energy independence, there also are potential problems.

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by Adam Wilmoth
Energy Editor
Adam Wilmoth returned to The Oklahoman as energy editor in 2012 after working for four years in public relations. He previously spent seven years as a business reporter at The Oklahoman, including five years covering the state's energy sector....
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