American economy reliens heavily on oil

Oil and American Economy

Oil is a major component of the American economy, accounting for over 40% of all energy use and 98% of all transit. Although it only has 3% of the world’s oil reserves, the nation consumes more than 25% of the world’s oil. Oil is a fungible global good, and its quantity and demand are influenced by a variety of different things. By lessening its reliance on imports of oil, the US can protect its physical, fiscal, and energy security. This essay explores the use of local oil resources as a means of reducing American reliance on foreign sources of energy.

Struggle for Energy Freedom

The US has struggled with energy freedom on a regular basis for a while now. Ending foreign dependence on oil supply has been an important America’s dream since the 1970s. Nevertheless, the goal has consistently pushed the limits of all the United States’ presidents (O’Rear, Sarica, & Tyner, 2015). The importation of oil from unstable parts of the world, particularly the Persian Gulf, has made many presidents, including George W. Bush and Barack Obama, to address the issues as a threat to national security. To this end, many experts and economists support the America’s dream to join the leading exporters of oil and gas by 2023. According to Dunham and Schlosser (2016), the United States predicts that natural gas production will exceed 15 million barrels per day by 2020. This prediction follows the combination of tech-savvy methods of digging further and deeper in tracking hidden oil and gas reserves in America’s soil. The International Energy Agency reported that the United States would occupy a relatively advantageous position as the world enters a golden age of natural gas in the coming years.

Transformation to Natural Gas

Due to the noticeable increase in natural gas production in the United States, country-based industries will use the resource more than oil. This transformation will be significant to the country’s reduction of oil importation. The firms will use natural gas, which will be a domestic supply rather than imported oil. According to the Energy Information Administration (EIA), the provision of internal energy will leverage the efforts of ending the vulnerability of the American economy in the face of imported energy disruptions (Dunham and Schlosser, 2016). Moreover, the Advanced Energy Initiative Program that President George W. Bush raised provides a viable framework to substitute renewable fuels. The program’s aim entails replacing over 75% of U.S of oil imports from the Middle East with renewable energy such as ethanol among others (O’Rear, Sarica, & Tyner, 2015). Kobek, Ugarte, and Aguilar (2015) note that the United States has embraced hydraulic fracturing to exploit shale gas from rock formations which were inaccessible several decades ago. The use of such technologies will propel America beyond a petroleum-based economy.

Conclusion

Dependence on the foreign supply of oil threatens the economic security of the United States. Oil supply and demand depend on a plethora of factors, which make the product volatile. For many years, the United States has sought various frameworks of reducing dependence on oil imports through exploitation and diversification of domestic oil resources. As such, the country has embraced a combination of technologies to help exploit oil and natural gas reserves regardless of their accessibility. For instance, the use of hydraulic fracturing has made the production of shale gas from formerly inaccessible rock formations. These efforts will eventually lead to energy independence of the United States, despite shifting from a petroleum industry to a diversified economy.

References

Dunham, I. M., & Schlosser, K. (2016). Original article: Energy security discourses and environmental protection measures in U.S. federal energy legislation: An introductory exploration. The Extractive Industries and Society, 386-94.

Kobek, M. P., Ugarte, A., & Aguilar, G. C. (2015). Shale Gas in the United States: Transforming Energy Security in the Twenty-first Century. Norteamérica, 107-38.

O’Rear, E. G., Sarica, K., & Tyner, W. E. (2015). Analysis of impacts of alternative policies aimed at increasing US energy independence and reducing GHG emissions. Transport Policy, 37121-133