The notion of energy independence evokes memories of a bygone era. Since the time that the U.S. was able to provide for its own energy needs, the prevailing energy policies of U.S. administrations have varied from neglect to tired expressions about the usual suspects - America's addiction to oil and the evils of foreign imports. That is about to change. Today a new dynamic is reshaping the global and U.S. energy markets, spurred by new kids on the block - shale resources and a wave of disruptive technologies dramatically raising energy efficiency standards. U.S. energy independence is not a bridge too far anymore. It is a viable scenario, but only under the right policy umbrellas.
Some facts are worth reciting. The U.S. energy deficit (i.e., net imports) during 2010 was 21 percent of its total consumption, estimated at roughly 98 quadrillion British thermal units (QBTU). Its approximate burden on the U.S. balance of payments amounted to a quarter of a trillion dollars. Most of the energy deficit was due to imported oil, which in turn fueled an inefficient transportation fleet. Interestingly, natural gas provided only 25 percent of energy needs, despite the fact that the U.S. has more than a 100-year supply capacity at current consumption levels.
The historic Achilles heel of the U.S. domestic energy legacy has been the transportation sector's exclusive reliance on petroleum and the prevalent inefficiency of gasoline and diesel-fueled vehicles. The U.S. consumed 3.11 billion barrels of gasoline during 2010 with 250 million vehicles averaging 23 mpg, according to Energy Information Administration statistics. Flash forward to 2025 and a projected 300 million vehicles on the road. A diversified transport fleet with 20 percent electric vehicles (EVs) - the remainder composed of cars averaging 50 mpg - can slash annual U.S. gasoline consumption to almost half of its current level.
U.S. strategic goals aimed at energy independence (or greater than 90 percent sufficiency) must leverage U.S. advantages - abundant gas and oil resources, a free-market economy and the spirit of innovation, while mitigating its most conspicuous weakness - energy inefficiency all across the consumption chain. Here are this author's goals for U.S. energy policy by 2025:
Diversifying supply: Doubling renewables (by boosting solar and wind) from roughly 8 percent of the U.S. energy supply pie to at least 16 percent by 2025 is a nontrivial but certainly achievable goal. Coal and nuclear are necessary and environmentally contentious prerequisites for energy independence. To what degree increased gas, renewable and next-generation nuclear plants can reduce the current vintage coal/nuclear's share of the energy pie (a combined 30 percent of total) is a strategically intriguing question, even more so because of the resultant reductions in future carbon emissions - an advantage in global warming forums. It showcases the complex tradeoffs and risks predicated by energy independence.
Efficiency: Targeting a triple improvement in overall U.S. fleet fuel efficiency (relative to 2010) leveraging a significant growth in nongasoline powered vehicles - electric, diesel, compressed natural gas/liquefied natural gas, plug-in hybrids or other. The compelling argument in favor of EVs is the redistribution of demand from oil to gas via the existing electric power grid, hence facilitating the transition to a more gas-centric energy economy without a massive infrastructure makeover. On a broader perspective, the big prize will be to maintain total U.S. energy consumption at or near 100 QBTU - a stretch goal perhaps, but doable via policy initiatives nurturing (not subsidizing) energy efficiency technologies.
The issue of energy independence involves a complex mosaic with moving parts - energy security, international trade, carbon emissions and public sentiment, among others. Nevertheless, the road markers to the future may well be emerging - substitution, supply diversity and efficiency. U.S. energy independence is a strategic choice rendered far more plausible, yet still fraught with risks, as a result of technological advances. Its realization, however, will remain elusive absent a clear set of goals and the will to make difficult choices.
In Henry Ford's words, "If you think you can or if you think you can't, either way you're right." The American public will be keenly interested to know President Obama's and each of the Republican candidates' positions on U.S. energy with no less granularity than on other matters of national conversation.