The Department of Energy’s Short Term Energy Outlook, released today, has a prediction that isn’t particularly far-fetched: US net import dependence will average less than 40% of consumption for all of 2013, on the back of increasing US crude oil production.
The fact is, the country is almost there. The chart below shows the decline in imports as a percentage of consumption, or what the DOE calls “products supplied.” It actually dipped to less than 40% for one recent month — February of this year — and in the most recent month’s date (for August) was just less than 41%. Since these declines tend to be gradual, getting the average down to 39% from numbers consistently above 40%, and most recently closer to 41%, is actually a significant change.
But one of the more interesting bits of recent data is how US net import dependence in terms of outright barrels has stabilized in a range. The chart below shows that figure; note the steep decline followed by an up-and-down pattern the past few months. After tumbling a little more than 1.1 million b/d in just a four-month period last year from about 9.1 million b/d, and then dropping to as low as 7.37 million b/d in April, it’s mostly been up and down between about 7.4 million b/d and 8 million b/d for several months.
There are several reasons why this decline in net import dependence measured in barrels has been taking a breather the last few months. The biggest reason appears to be that demand is up, from about 18.213 million b/d in March to 19.226 million b/d in August (though that August figure seems abnormally high), meaning there was about 1million b/d more in domestic demand that was supplied by imports, or that led to fewer exports.
And in fact, total petroleum exports have declined, but not by a lot: from 3.263 million and 3.194 million b/d in April and May, respectively, down to 3.017 million b/d in August.
Even for this short period of up-and-down net import dependence, production didn’t do that much to reduce dependence; the DOE reported that average crude production between March and August actually fell from 6.268 million b/d to 6.147 million b/d.
So that sort of data might bring the DOE’s 39% import dependence projection into question. But look at the most recent weekly data and you see that US crude production in the most recent week was 6.669 million b/d, up more than a half-million b/d from that August average. The projected average for next year is 6.85 million b/d, crossing the 7 million b/d threshold by the end of the year.
And with the DOE projecting that US liquid fuels consumption is only going to increase by 110,000 b/d next year to 18.77 million b/d, after what it assumes is going to be a 290,000 b/d drop in 2012 from 2011 , it’s easy to see how the agency can see the net import dependence figure resuming a decline.