With all the clamoring over our addiction to foreign oil, it may be slightly comforting to know that oil imports have actually dropped significantly over the past several years. According to the Energy Information Administration (EIA), the amount of imported oil (as a percentage of total oil consumed) fell from 60.3 percent in 2005 to 49.3 percent in 2010. This means that roughly half of the 19.1 million barrels per day (MMbd) of petroleum products consumed last year were produced domestically. You may be surprised to hear that much of the imported oil came from countries in the Western Hemisphere (49 percent), and not the Persian Gulf (18 percent). Canada is by far our largest supplier of oil (25 percent) followed by Saudi Arabia (12 percent), Nigeria (11 percent), Venezuela (10 percent), and Mexico (9 percent).
Though analysts have identified several factors contributing to this drop, the financial crisis in 2008 and subsequent contraction in the economy are believed to have had the largest impacts. After bottoming-out at 18.8 MMbd in 2009, however, demand for oil has increased fairly modestly to 19.1 MMbd. Another important factor was the government-mandated uptick in the production of biofuels. Between 2005 and 2010, ethanol inputs grew from 230,000 barrels per day to 779,000 barrels per day. A rise in deepwater drilling in the Gulf of Mexico and other areas is estimated to have increased domestic oil production by 334,000 barrels per day. Last, accumulating efficiency gains in oil refineries have contributed roughly 75,000 barrels per day since 2005.
Since it wasn’t mentioned, it looks like efficiency gains outside the oil industry have yet to make a significant impact on curbing oil consumption. However, the EIA says it expects the factors affecting oil demand to change over the next decade. Given the upcoming 54.5 miles per gallon fuel economy standard by 2025, they predict efficiency gains in the auto industry will play an important role in damping future oil demand as the economy recovers. Most likely, it will be less than the 2.2 MMbd touted by the Obama administration since the policy and its goals will be subject to a 2018 “midterm review.” Image
