Since federal limitations on domestic oil production in the 1980s, there has been a steady decline in US production. By 1994, the US was importing more than its total domestic production. Restrictions on supply help to drive up prices and unnecessarily contribute to US reliance on foreign oil.
As much as 66 percent of all US crude oil is imported from other countries, and the amount of oil imported from OPEC nations is roughly equal to the amount of oil produced domestically. Petroleum, natural gas and coal are the primary sources of energy consumed in the United States because they are the most energy rich resources available. So far, renewables have only been capable of providing a small portion of total energy consumption, and their contribution to energy consumption has remained limited over the last two decades. However, with increasing government and private focus on green energy sources, renewables are likely to go from strength to strength in the near future.
One of the major alternative fuels emerging as a genuine alternative to oil and gas is the ethanol-based biofuel, made from corn crops. The real price of corn was significantly higher than the nominal price of corn until 1996. However, while the nominal and real price of corn remained relatively stable for ten years, both the real and nominal price of corn are back on the rise. With pressure to produce biomass fuels containing higher concentrates of ethanol, prices of corn appear to be further increasing.
For every dollar of US GDP, the amount of GHGs and CO2 emissions that are produced in the process has been slowly falling. When countries develop and prosper they create more efficient means of production. As a result, American economic growth has brought more energy efficiency and less pollution per GDP dollar.
Until we find the renewables capable of replacing fossil fuels, oil and gas will remain the world’s most important commodities, meaning the US will continue to import great volumes from overseas. But just how reliant is the US on the importing of foreign oil?