In 2011, net U.S. imports of crude oil and refined petroleum products declined for the sixth consecutive year, reversing a decades-long trend of rising reliance on foreign suppliers. A number of factors played a role, including reduced demand for petroleum fuels as a result of the recession and rising levels of efficiency in the nation’s automotive fleet. Recently, however, increased domestic production of liquid fuels has accounted for a substantial portion of the shift, rising by 1.4 million barrels per day (mbd) between 2008 and 2011 while net imports declined by 2.7 mbd. Based on current U.S. dynamics, both trends—rising production and falling imports—appear to be sustainable for the next decade and possibly longer.

Numerous observers have suggested that this outlook is transformative for U.S. energy security. They argue that the nation is on the cusp of an era of energy independence through self-sufficiency in supply—an era characterized by greater economic stability and national security as the result of reduced reliance on Middle East oil supplies. The nature and meaning of energy independence, however, is widely misunderstood. Although increased domestic oil production will have clear positive effects on the U.S. economy, it alone will not insulate America from the risks of oil dependence. This can only be accomplished by reducing the role of oil in our economy.