With the goal now firmly within reach, we draw on insight from across our research teams to highlight the key factors and uncertainties surrounding this significant change.
For the past 40 years, each US president has sought the seemingly elusive goal of American energy independence, motivated by the desire to reduce the economic and security costs associated with importing energy.
We forecast that the US will have achieved this goal by 2025, marking the first time since 1952 that the country will export more energy than it imports.
This evolving shift is partly driven by higher output. Over the past seven years, the country has added three million barrels per day of tight oil and 27.5 billion cubic feet per day of shale gas to the global energy mix – an impressive 42% increase in production.
Meanwhile, domestic demand for oil and gas is decreasing, primarily due to efficiency gains in power generation. The US transport sector is using more alternative fuels, such as natural gas and biofuels, displacing the demand for oil.
But whilst our base case outlook predicts energy independence within a decade, there are key uncertainties that could accelerate this transition.
Firstly, if the crude export ban is lifted then it is likely that energy independence will be attained before 2025. The move would increase the price realised by domestic upstream producers as they would be able to access higher priced international markets. Receiving an additional US$5 per barrel could result in a production increase of 350-400,000 barrels per day.
But should the ban remain in place, the US could still produce more tight oil than is currently anticipated. Tight oil and shale gas plays are continually evolving and there are many opportunities for the application of new production techniques that could boost recovery rates.
In addition, demand from the transport sector may fall even faster. We forecast that the country's vehicle fleet will become 40% more efficient by 2030. Any further improvement would reduce US oil demand and, consequently, net oil imports.
Collectively, these factors make it likely that energy independence will be achieved before 2025, yet risks remain. These include delays in developing critical export facilities, environmental regulations which limit upstream investment and energy polices that would encourage more gas to be used in the power sector.
Yet whilst there are uncertainties surrounding the exact timing of independence, it's clear that the US has started its transformation from energy consuming giant to prominent exporter, bringing both economic benefits as well as new responsibilities.
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