Peak Oil, energy independence, and the US

Clifford Krauss has another useful energy article in the NY Times ("Can we do without the Mideast?"). The article is long, but here are some of the highlights that help put our national energy situation in context:

...Amy Myers Jaffe, associate director of the Rice University Energy Program, and other Rice researchers expect a drop of 4.3 million barrels a day in the use of oil by 2025 simply through improved fuel efficiency of vehicles mandated by Congress. That equals more than a third of current imports.

An additional 2.5 million barrels a day could be eliminated by 2050 with policies to make electric cars 20 percent of the American car fleet, the Rice researchers say. Drilling for more oil domestically would reduce dependency even faster. “We could be reaching a tipping point,” Ms Jaffe said. “Our entire oil profile could change.”

Oil imports now subtract more than a $1 billion a day from the United States balance of trade. Oil industry executives say that every additional million barrels of domestic oil produced generates a million new jobs and $30 billion in economic activity. And domestic production would reduce the flow of petrodollars that now help finance regimes unfriendly to the United States in places like Venezuela.

Because the United States has bountiful supplies of coal, natural gas and nuclear energy, as well as growing amounts of energy from renewable sources, the nation is already independent when it comes to the electrical power that heats and cools its homes and buildings and runs its factories...

“We’re 80 percent energy-independent to begin with, so we’re pretty far along,” said Daniel Yergin, the oil historian. “Our oil imports are down to 50 percent, and there has been a rebalancing of where we import oil from.”

Since 2007, the United States has decreased its oil imports from nations of the Organization of the Petroleum Exporting Countries by more than a million barrels a day (including 400,000 barrels less from Saudi Arabia and 300,000 less from Venezuela), while decreasing its imports from non-OPEC countries by half that much, according to the Energy Department...

Because the country has become more dependent on oil imports today, it is easy to dismiss those efforts of a generation ago as a failure, but that would be the wrong lesson to draw. Some advances were permanent: oil had been responsible for 15 percent of the nation’s electrical generation in 1975, consuming 1.4 million barrels a day, but now is only a trivial power source. The 1975 energy act obliged auto companies to double efficiency to 27.5 miles a gallon by 1985, saving hundreds of millions of barrels of imports over the years...

The high oil prices in recent years have helped the effort, and there is some evidence that gasoline usage in the United States may have peaked in 2007. With cars and trucks becoming more efficient and ethanol use expanding, American drivers will probably use less oil in the future despite predicted increases in population.

The 2007 Energy Independence and Security Act, the most serious energy legislation in a generation, went a long way toward reaching those goals. It raised auto and light truck efficiency requirements to 35 miles a gallon by 2020, from the current 27.5. It obliged producers of transportation fuels to gradually increase blending of biofuels into gasoline to replace oil, from nine billion gallons a year in 2008 to 36 billion gallons in 2022, a goal that will require the production of advanced biofuels in commercial quantities. Pilot-scale plants are working on producing various kinds of advanced cellulosic ethanol, butanol and other biofuels made out of plant and other wastes...

In the meantime, natural gas has the greatest promise to replace diesel fuel in trucks. Clean Energy Fuels, a natural gas distributor, estimates that the country’s eight million trucks use up to 40 billion gallons of diesel a year. The company figures it would take five trillion cubic feet of gas a year to replace that amount of diesel, which alone would displace 2.3 million barrels of oil a day...

A conversion may be beginning. United Parcel Service recently announced that it would add 48 trucks fueled on liquid natural gas to its fleet and would add more once the fueling infrastructure was in place. It took $5.5 million in government grants for the project, and more research is needed to develop pump technology and onboard storage tanks to prevent methane escapes...

In 2009, the United States produced more oil than the year before for the first since 1985 because of the combined increase in production from deepwater Gulf of Mexico production and drilling in a giant shale field in North Dakota. Domestic production again rose in 2010, by 3 percent, while imports have fallen slowly but steadily since 2006. Edward Westlake, a Credit Suisse managing director for energy research, calculates that the United States will be producing an additional 2.4 million barrels of oil and other liquid fuels by 2016, on top of the 8.6 million barrels a day produced in 2010, even with a natural decline in existing domestic oil fields...

But offshore drilling will not be off the table forever, and oil executives believe many years of discoveries will be made once approvals start up again. As for the eastern Gulf and Atlantic coast currently closed to exploratory drilling, the federal government estimates they contain 3.8 billion barrels of oil, roughly comparable to Norway’s reserves...

More relevant is the little-known new drilling for oil in shale fields made possible by the same hydraulic fracturing and horizontal drilling techniques that have increased natural gas production. Production from the Bakken field in North Dakota alone has risen to more than 350,000 barrels a day this year, and experts expect that will reach 800,000 barrels a day in five to seven years. Shale fields in Texas, Colorado, Wyoming and California, barely explored, have vast potential...