The Illusion of U.S. Energy Independence: An Assessment of the Current State of Energy Use

The call for the United States to significantly reduce its use of crude oil and move toward energy independence dates back to the 1970s. Beginning with President
Nixon’s demand for complete independence on imported energy by the end of the 1970s, to President Carter’s bold assertion that the U.S. would never use more
imported oil than it did in 1977, to President George W. Bush’s claim that American is addicted to oil, presidential focus on “oil supply disruptions” and “dependence on
Middle Eastern oil” have helped define U.S. energy policy for nearly 40 years. Usually the result of international events that cause the price of crude oil to spike, creating
pressure on the American economy and the livelihood of the American people, these proclamations have generated little in the way of tangible improvement of the energy
dependency “problem,” which, at its core, is really an imported crude oil problem.
Today’s heightened international tensions and instability in the Middle East and other oil producing regions have precipitated renewed demands that the U.S. move down the
path toward energy independence and energy security. The Congress has held numerous hearings, President Bush has stated that we must end our addiction to oil,
and various interest groups are proposing policy alternatives designed to lessen our use of petroleum and petroleum products.
This scenario is not new. After the oil embargo of 1973, President Nixon launched Project Independence to end our dependence on foreign oil. President Carter created
the Synthetics Fuel Corporation to pursue the same objective. While energy consumption patterns have responded to price and demand changes, the influence attributable
to policy formulation or rhetorical appeals is marginal, at best. These past efforts floundered because oil is abundantly available, versatile in its uses, and its products are
less expensive than alternatives, even in the context of today’s higher prices.
Energy use patterns in the transportation and electricity consumption sectors are driven principally by market factors that government does not control or has chosen
not to exert influence over. The price of energy, whether for transportation or electricity, is the main driver influencing consumer behavior and government policy. When
the price is high, public demands for independence grow and when prices fall or remain low (as they have for much of the period since the 1970s), the demand for
policies to seek independence wane.
This report is the result of an examination of recent calls for energy independence and associated policy proposals. The basic conclusion is that energy independence, as it is
generally thought of, is economically, politically and technically impractical in the foreseeable future. Although government could take actions to reduce oil use
significantly in the near-term, the political and economic consequences associated with those actions make them impractical. The report summarizes observed energy
consumption and supply patterns, reviews projections of how those patterns may change, and outlines the policy choices facing the American public. The information
provided in this report explains why oil will remain an important source of energy and why independence is an illusion.

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