U.S. Dependence on Oil Imports to Decrease to Lowest Level Since 1992

Strategic Insights -

The Energy Information Administration (EIA) forecasts that the U.S. reliance on oil imports will drop to its lowest level since 1992, reaching 42% in 2035. The EIA attributes this decline to increased domestic output, efficiency gains, and the stepped-up use of biofuels. In 2005, the U.S. dependence on foreign oil peaked at more than 60%, and in 2009, it stood at near 52%. The net import share of total U.S. energy consumption is projected to decrease from 24% in 2009 to 18% in 2035. The forecast is based on rising crude oil prices, which are expected to reach $125 a barrel in 2035, in 2009 dollars, and $200 a barrel on a nominal basis.

Key Takeaways:

  • The Energy Information Administration (EIA) forecasts that U.S. dependence on oil imports will decrease to 42% in 2035, its lowest level since 1992.
  • The EIA attributes this decline to increased domestic output, efficiency gains, and the stepped-up use of biofuels.
  • The net import share of total U.S. energy consumption is projected to decrease from 24% in 2009 to 18% in 2035.
  • The forecast is based on rising crude oil prices, which are expected to reach $125 a barrel in 2035, in 2009 dollars, and $200 a barrel on a nominal basis.
  • Renewable sources, such as ethanol and biodiesel, are expected to grow by 4.8% annually to 2035, with ethanol supply nearly tripling from 2008 levels to 1.82 million barrels a day.
  • Biodiesel supply is expected to rise by 7.1% annually to 130,000 barrels a day.
  • Non-OECD demand, led by China, the second-biggest oil consumer, will rise by 1.9% annually over the period.
  • Global oil demand growth is expected to average 1.1% annually in the period, with U.S. consumption up by 0.6% each year.
  • Conventional oil production in the major industrialized nations of the Organization for Economic Cooperation and Development (OECD) is expected to dip by 0.5% annually over the period.

Statistics:

  • In 2035, U.S. dependence on oil imports is expected to reach 42%, its lowest level since 1992.
  • The net import share of total U.S. energy consumption is projected to decrease from 24% in 2009 to 18% in 2035.
  • Crude oil prices are expected to reach $125 a barrel in 2035, in 2009 dollars, and $200 a barrel on a nominal basis.
  • Renewable sources, such as ethanol and biodiesel, are expected to grow by 4.8% annually to 2035.
  • Ethanol supply is expected to nearly triple from 2008 levels to 1.82 million barrels a day.
  • Biodiesel supply is expected to rise by 7.1% annually to 130,000 barrels a day.
  • Non-OECD demand, led by China, the second-biggest oil consumer, will rise by 1.9% annually over the period.
  • Global oil demand growth is expected to average 1.1% annually in the period, with U.S. consumption up by 0.6% each year.

Sources:

  • Dow Jones Commodities News Select via Comtex (New York, Dec 16, 2010)
  • Energy Information Administration (EIA)
  • David Bird, Dow Jones Newswires (212-416-2141; david.bird@dowjones.com)