The President said in his State of the Union Address, “And nowhere is the promise of innovation greater than in American-made energy.”  He then talked about opening federal land for oil and gas exploration, implied that relying on foreign oil is not a good thing, and stated, “This country needs an all-out, all-of-the-above strategy that develops every available source of American energy a strategy that’s cleaner, cheaper, and full of new jobs.”

Considering the President’s all-of-the-above platform, and the goals implicit in it, we’d be wise to evaluate our national relationship to oil. The U.S. currently produces around 7.6 million barrels of petroleum per day, and we have approximately 11 years of reserves at this rate of production. We use more than 19 million barrels per day, however. We import much of this from a geopolitically complex, shifting, and sometimes volatile, global marketplace. Thus, our need for oil sends hundreds of billions of dollars out of the country each year, and makes us strategically reliant on a commodity we do not fully control.

Suppose we didn’t have to worry about politics and what regulations might be needed to bring “every available source of American energy,” as well as all of those new jobs, into being without degrading the environment unacceptably.  Within this context, I would like to pose the following question: Does it make sense to set a national policy of reducing petroleum consumption to what we are able to produce in the United States? Could we – through existing resources, advanced recovery, new discoveries, and exploitation of unconventional oil (e.g., oil shale) – ever get to a maintainable balance of domestic oil production and consumption? 

Doing so would improve national security, stop all that money from leaving the country, and – as we’d be using significantly less oil – help us maintain a healthy environment. To do this, I estimate that we’d need to reduce oil consumption to a total of 5 MB/day by 2030-35 (a nearly 75% decrease). This would require an aggressive, sustained national effort. Some possible pathways:

  • Improved efficiency of our transportation Fleet (CAFE standards)
  • Electrification of our transportation fleet (hybrid electric –> all electric)
  • Maximize fuel flexibility of today’s fleet (gas, methanol, ethanol, methane)
  • Partial replacement of petroleum with biofuels (methanol and ethanol)
  • Partial replacement of petroleum with natural gas or fuels from natural gas
  • Replace petroleum wherever reasonable in industrial processes
  • Replace petroleum where possible in residential heating

This list is, of course, not exhaustive, and each comes with associated challenges and trade-offs. I welcome your additions to this list, and feedback (or pushback) on it.

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