Oil Imports Are Actually Way Down
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With the oil rig accident and subsequent spill in the Gulf of Mexico fresh on everyone's minds, we have been hearing a lot of analysis in the news about the U.S. and its energy situation. Advocates on all sides of every energy debate have cited this episode as evidence in support of their particular arguments, which is typical.
One analyst on CNBC recently stated that we have to keep drilling in deep water because the U.S. is getting "more and more of its oil" imported from overseas. This is a typical example of the way that many people are not bothered by the annoyance of having to look up facts before they make their arguments.
The truth is that oil imports to the U.S. are falling at a rapid rate, and have been falling since their peak in 2005. We are still importing more than we are producing, but that relationship is on the move in what many argue is a good direction. For the 12 months ending in March 2010 (the most recent data available from the Energy Information Administration), imports represented 62% of total oil consumption. That is the lowest percentage since 2003, and the trend is definitely downward.
The reason why is that Americans are using less oil now than they have in years. The combined effects of energy conservation efforts (better cars, less driving) and the economic depression following the housing bubble, have led Americans to use less gasoline. We get other products from crude oil, such as plastics and other chemicals, but transportation fuel still accounts for the majority of the consumption of crude oil.
The chart below shows daily per capita gasoline consumption in the U.S. It is calculated based on taking the total daily gasoline consumption data and dividing that by the Census Department's monthly estimates for total U.S. resident population. The EIA data only go back on a monthly basis to 1983, so we cannot go back in time as far as we might wish. But in this era of more cars on the road, Americans are somehow managing to consume less gasoline per person than at any other time in at least the past 3 decades. So there is some hope that this is moving in the right direction.
One problem is that all of our collective efforts at reducing consumption so far have only managed to drop this per capita gasoline consumption rate from a peak of 1.28 gallons/day in August 2005 to the recent reading of 1.17 gallons/day. That is the lowest it has been in years, but it is still not a truly dramatic cutback in consumption.
If U.S. domestic oil production were to remain flat at the current level of roughly 163 million barrels per month, then Americans would have to cut their gasoline consumption down all the way to 0.42 gallons/day if we wanted to get by on only domestic oil production. The trend is decidedly downward for the per capita consumption data, but it would take us a while to get it all the way down that far. Would you want to cut your own personal gasoline use by another 67%?
Editor, The McClellan Market Report
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