America Will Be Energy Independent By 2030

Oil in America
Oil in America

In less than 20 years, the United States will be energy independent. That's the upshot of a new report just published by BP, titled (appropriately) "BP Energy Outlook 2030."

During the next 18 years...

  • The world's population will grow by 20%, to approximately 8.2 billion souls.

  • Car ownership will rise three times as fast -- up 60% over the next 20 years.

  • So even with gains in fuel efficiency, global energy demand will rise 40%.

  • Most of that growth will come from China and India.

  • China will require imports to fuel 80% of its oil demand.

  • India will need to import 91% of its oil.

  • Lastly, Europe -- even with little or no growth in demand -- will need to import 94% of its oil.

So the situation's looking pretty grim for much of the world, especially for China, India, and Europe. But here in North America? We're sitting pretty.

Thanks to a boom in natural gas production from shale, and oil production from Canada's tar sands, North America will become an energy exporter over the coming decades. And the U.S. in particular, while continuing to import oil, will see improvements in efficiency sufficient to reduce net oil imports to levels not seen since 1990. We'll also produce enough coal and natural gas to offset the oil imports, and make the U.S. a (small) net energy exporter.

Oil Pipe Dreams

Granted, so-called "energy independence" has been a siren song -- or a pipe dream -- of American politicians ever since the days of President Carter and the Arab Oil Embargo of 1973. But so far, it has failed to materialize. The last year in which the U.S. was truly independent, according to government data, was 1952.

You may wonder, therefore, whether BP even knows what it's talking about when it suddenly steps forward and declares the goal is within reach. After all, this is the same company that, just a couple of years ago, failed miserably at predicting the chances of one of its own oil rigs blowing up.

But before dismissing this company's guesses out of hand, consider this: BP notes that its "outlook is within the range of publicly available forecasts," and, in particular, falls within the range of possible scenarios published by the International Energy Agency. So it's not just BP that sees the promised land here. A lot of other folks see it, too.

How Do We Get There From Here?

It is fair to ask, though, just how BP sees us becoming suddenly independent of foreign energy providers when India and China are industrializing, Indians and Chinese (and a lot of other people) are buying cars, and everyone from Europe to Africa is competing for "our" energy.

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The answer basically boils down to America using less of the kind of energy everyone else wants, and more of the stuff that we have in abundance. According to BP, the world's population will rise at about 0.9% per year over the next two decades. Improvements in energy efficiency, however, will outpace that growth by a factor of two, rising 2% per annum. Result: Overall "energy consumption per capita" rises slower than population growth (0.7% per year).

In the years to come, we'll also see demand for oil rise just 0.8% per year (again, slower than population growth). Don't expect to enjoy it, though: BP warns that the main reasons people will avoid using oil when possible are that it'll get more and more expensive, as well as harder and harder to find and produce.

America: The Saudi Arabia of Everything But Oil

Helping to take up the slack will be natural gas -- the "fastest-growing fossil fuel globally," at 2.1% per annum -- but also coal (1.2% per annum), and especially nuclear power, projected to grow at 7.8% per annum.

Happily, America is blessed with all three forms of energy in abundance, and the more of these forms of energy we use, the less foreign oil we'll need to import. Even better, much of what we do need to import will come not from unstable Middle Eastern countries, but from right next door in Canada and Mexico. It probably won't come cheap, but it should be more than enough to satisfy our needs. In combination with other fuels, it truly will be enough to make America energy independent at last.