The US should not be lulled into thinking its oil dependence crisis has been resolved by some temporary and modest good news on domestic production.
America’s oil addiction and oil dependence are not a thing of the past – whatever the media may have yipped at each other’s heels to tell you recently. In fact, we are on the verge of committing the world to a future of ever more expensive oil and ever larger US economic problems for paying for oil imports, not to mention the devastating impact this oil dependence has on the climate, air and water, and the economies of Asia and Africa.
Also see: An energy independent US would be loss for the planet
But here are the headlines:
Behind this optimistic hype is the annual 2012 World Energy Outlook produced by the International Energy Agency (IEA). This year’s forecast, in reality, is very grim. It projects that global oil prices will rise in real terms from their present, economy-wrecking US$100 level to either US$125 or US$145, depending on how much additional investment consuming nations make in efficiency.
It does foresee a brief spurt of US oil production from about 10 million to about 11 million barrels per day in 2020, but it slumps down to about 9 million by 2035. Saudi production exceeds ours again after 2020, and more of the world’s oil must come from OPEC than it does today, once the modest and temporary US bubble passes.
The rosy media gushing about “energy independence” comes from IEA’s projection that US investments in energy efficiency and biofuels will cause our oil consumption to drop gradually from our present 19 million barrels per day to about 12.6 million barrels per day. Half of this decline results from efficiency, and half from electrification and biofuels. (These are not guaranteed reductions, but are certainly possible.)
These are projections, which often prove far from the mark. But assume they come true – how good is this news for the American economy, the climate and the environment?
The answer is this news is about as bad as it could be – if we let it come true. Even with fairly dramatic US investments in efficiency and alternative fuels, IEA’s numbers would mean that over the next quarter century the US would transfer US$6.5 trillion (one third of our current national debt) of its wealth to oil-exporting nations; for the next decade our oil imports bill would be bigger than it has been for the past decade; development prospects in Asia and Africa would be devastated by their inability to pay for basic transportation services; and, as IEA itself made as its major point, hopes of climate progress would be dashed.
But in the Washington Post, Robert Samuelson writes, “For starters, the long-standing US trade deficit will narrow and might disappear. In 2011, oil imports represented two-thirds of the deficit in goods.” Well, by 2035 the oil imports deficit would be smaller – only US$170 billion a year, instead of US$340 billion. That’s not trivial – but none of it results from increased domestic oil: US oil production is actually down in 2035.
No, any decline in the oil imports bill for the US over the next quarter of a century is entirely the result of investments we make in efficiency, electrification and alternative fuels. But by doing too little of this, as the IEA expects, we bankrupt our climate, the world and ourselves. Remember, under this scenario, our oil imports bill actually goes up for the next decade.
Instead, we ought to get real and create a global partnership of all the major oil importers to reduce our demand for oil. If the world used only a little less oil, about 6% less, it could cut the price of oil in half, and keep high-carbon crudes like Canada’s tar sands in the ground. It’s paying for that last bit of extreme crude which drives the price of all oil up through the roof. And the sooner we start deploying electric vehicles and more efficient trucks, and lots of them, all over the world, the less damage we will do the climate and the environment on our way to an oil-free future.
The oil industry is chortling as they read the delusional coverage of the IEA’s 2012 report – and the media should be red-faced. The rest of us should get on with the biggest economic and environmental opportunity we have ever been handed, to protect the environment and slash the cost of imported oil by innovating, not drilling, our way out of oil dependence.
What we should not do is be lulled into thinking that our oil dependence crisis has somehow been resolved by some temporary and modest good news on the domestic oil-production front. It’s neither big enough nor sustainable enough to change the big picture.
Carl Pope is the former executive director and chairman of the Sierra Club. This article first appeared on the Huffington Post.