It has been 3 years since I last looked at US energy statistics and a recent conversation has prompted me to revisit the topic. Is the USA close to energy independence? The answer is surprisingly yes! In 2007 the USA imported 708 Mtoe (million tonnes oil equivalent) of energy, mainly crude oil. In 2015, that had fallen to 234 Mtoe. The rate of decline is 59.25 Mtoe per annum and if the trend continues the USA will be energy independent in 4 years. It is to be anticipated that the oil price crash will impact oil production in 2016 and 2017 but I wouldn’t bet against the US becoming energy independent in the early years of the next decade.
Let us begin with a look at primary energy production (Figure 1). We see that rising energy production began around 2010, down to the “shale miracle”. In this period energy consumption has been flat (Figure 2) hence the improved energy balance is entirely down to more home grown energy production. We see that the growth has come from oil and gas and that coal is in retreat. New renewables (solar, wind and other) have been growing at a tremendous rate but remain barely relevant at 4% of total primary energy produced.
Primary energy consumption was growing slowly until 2007 when the weight of high energy prices eventually caused consumption growth to stall and to fall sharply in 2009 on the back of the finance crash. Since then, in contrast to Europe, it has been trending sideways. Energy consumption in Europe continues to fall as the continent remains mired in € zone trauma and Bruxelles red tape. Natural gas consumption is rising at the expense of coal, presumably in the electricity generating sector.
Figure 3 The bars obove the zero line are exports and those below are imports and the blue line represents the balance between the two.
Deducting production from consumption provides the energy balance, a proxy for net imports and exports. I know some readers dislike this practice but it is a cheap and cheerful way to see the big picture. It is assumed (by BP) that all nuclear, hydro and renewable electricity is consumed at home and the balance on these categories is zero. Natural gas imports from Canada, that once ran at around 100 Mtoe, have all but disappeared. Oil imports are in steady decline down to the “shale miracle”. Coal exports are fairly steady while overall production and consumption are in retreat. It is perhaps surprising that the USA has not managed to grow its coal export market.
In so far as electricity consumption is a symbol of prosperity we see that growing prosperity in the USA halted in 2007 under the weight of rising energy prices and was severely dented in 2009 in the wake of the finance crash. Electricity consumption has been effectively flat since 2007 while new renewables are gradually increasing their share. I often wonder to what extent the low carbon focus of energy policy is negatively impacting the availability of affordable energy, placing a lid on economic growth. This is a good topic for the comments.
Wind, solar and other renewables now account for 7% of electricity generation, overtaking hydro. Is this a good or a bad thing?
Looking at all low C sources we see that growth in low C has been steady since 1965 but slowing after 1995 as nuclear went out of favour. All the recent growth in low C comes from renewables.
The US energy system is being transformed mainly by expansion of shale oil and gas that has reduced US import dependency on both. Coal production and consumption is in decline as gas takes up a greater share of electricity generation. New renewables are growing rapidly but at 4% of total primary energy production remain small bit players. Assuming that Mr Trump does not win the presidency then we may also assume that energy policy will continue to follow the Al Gore track, growing low C until it breaks the power generation system. In the USA, that day is a long way off.
The “shale miracle” has well and truly placed the USA on track for energy independence early next decade. It is a miracle because most of the shale gas, and with current low price shale oil too, is being produced at a loss.