Economy

U.S. dependence on foreign oil has dropped

The United States was so dependent on foreign oil that by 2008 it imported two-thirds of what the country's refineries needed to produce enough gasoline, diesel and the other petroleum products to meet the country's needs.

But recently the federal Energy Information Administration reported that in 2010 imports had fallen far more than many realized — to 49 percent of the country's needs.

What happened?

Part of the big drop resulted from the federal agency’s using a different measurement — net petroleum imports — widely viewed as a more accurate way to judge overall dependence on foreign petroleum. The figure counts imports of crude oil and of refined petroleum products such as gasoline and diesel, but it also subtracts exports of U.S. petroleum products, which have been growing.

The country recently stopped being a net importer of petroleum products for the first time since at least 1973, as the country’s refiners sold more gasoline and other end products to other countries.

A second factor is simply lower demand for petroleum products, in large part a result of the sour economy, but also helped by more efficient cars.

And on the supply side, U.S. oil production, after languishing for years, is on the upswing.

One example is North Dakota. Perhaps within a year the state is expected to supply more oil for domestic use than the 1.1 million barrels a day that Saudi Arabia now exports to the United States.

In addition, biofuels, mainly ethanol, are meeting more fuel needs. And natural gas liquids, a byproduct of natural gas that can be used to replace some petroleum products, are surging.

Put them all together, and the United States has cut its dependence on imports substantially — with further declines possible if the trends continue.

“It’s a silent revolution,” said Lehi German, publisher of the newsletter Fundamental Petroleum Trends. “This is a big deal.”

The size of the shift has been somewhat hidden by the different numbers that have been used to describe the country’s dependence on foreign oil.

One measure looks solely at the percentage of imported oil used by refineries. T. Boone Pickens, who backs a plan to use more natural gas, likes to use that gauge, which topped 66 percent in 2008 and dropped below 62 percent in 2010.

Critics of that standard say it overstates U.S. dependence on imports because it ignores other fuels being produced in America, and it ignores how much of that oil is re-exported as refined products.

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