On Monday, the U.S. Energy Information Administration
released the Annual Energy Outlook 2012 Early Release. This report provides projections for the U.S.
energy markets under the assumption that current energy laws and regulations
stay fairly unchanged. This information
can be used to discuss the current state and trends of the energy market for
the ultimate goal of analyzing and identifying necessary changes in energy
policies, rules, and regulations moving forward.
The AEO report presented a projected decrease in dependence
on foreign oil in the United States.
Figure 1 from the AEO is shown below and illustrates the anticipated closing
gap between U.S. fuel consumption and domestic fuel supply. At its peak in 2005, 60% of fuel consumed in
the U.S. was imported. This percentage
decreased to 49% in 2010, and the EIA believes this trend will continue until
2035 when foreign fuel will constitute only 36% of fuel consumed in the United States. This trend is due to increased domestic fuel supply
from growth in domestic oil production as well as limited increases in
consumption due to increased use of biofuels, moderate growth in the
transportation industry’s demands, and higher fuel economy standards in
vehicles.
Because of our dependence on foreign oil, rather than pumping up our own economy, we are paying billions to other oil-rich nations, making us only number seven on a list of the top ten wealthiest countries in the world.
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