The Amazing Story of America's Coming Energy Independence

The U.S. is quickly approaching energy independence, something that seemed unimaginable just a few years ago.

Aug 2, 2014 at 1:17PM

Dependence on foreign oil has long been an economic and political concern for the U.S., but over the past decade, the country has quickly reduced that reliance as domestic drilling exploded and consumers began using less fuel.

By late next year, the U.S. will begin exporting a significant amount of natural gas, something it has imported until recently. By 2016, the country should be a net exporter of natural gas.  

The major energy problem has always been oil, where Saudi Arabia, Iraq, Venezuela, Columbia, and Russia are some of our biggest suppliers.  

So, just how close is the U.S. from being independent of the rest of the world's oil? Energy independence may not be as far away as it seems.

Where has our dependence on foreign oil gone?
U.S. net imports of crude oil and petroleum products have dropped a whopping 58% from late in 2005, when net imports peaked at 13.59 million barrels per day. What's incredible is that the pace of decline hasn't slowed in recent years, but instead picked up steam slightly, as you can see below.  

Us Net Imports With Trendline

Source: U.S. Energy Information Administration.

What's surprising is that it's not just an increase in oil drilling that's caused the decline in imports. Declining demand has played a big role as well.

The boom in energy production
It's well known that new drilling techniques in shale deep beneath the earth's surface have been responsible for most of the increased oil production in the U.S., but just how fast production has increased is incredible.  

Below is a chart of the crude oil production in Texas and North Dakota, two states that accounted for 48.5% of the oil production in the U.S. in May, according to the U.S. Energy Information Administration.


Source: U.S. Energy Information Administration.

You can see that the trends are showing no signs of slowing, either. Oil and gas companies are focusing their efforts on oil-rich fields right now, and production should continue to grow, especially in Texas and North Dakota where the Eagle Ford, Barnett, and Bakken plays continue to show increasing potential.

Declining consumption helps the cause
While increased oil production is great, it doesn't mean a lot to imports if consumption is rising as well. The good news is that consumption is falling, and that's helped reduce imports even further.  


Source: U.S. Energy Information Administration.

There are a few things driving the reduction in oil consumption. First, people are simply driving less as a result of urbanization and the simple desire to save money. But when they are driving, they're driving more efficient cars.

SUVs that were very popular during the 2000s have seen sales decline in favor of hybrids and even electric vehicles. New CAFE standards were put in place in 2012 that will require automakers to reach a fleet fuel efficiency of 54.5 miles per gallon by 2025, and the technology to make that happen is already being put into vehicles.  

These factors will at least keep a cap on consumption growth long term, if not reduce consumption overall. That's key if the U.S. is ever going to be truly energy independent.

When will the U.S. be energy independent?
Within the next few years, the U.S. will be a major natural gas exporter, so the big concern for energy independence is oil.

If the current rate of net import decline continues, the U.S. will be energy independent around 2020 and could even become a net exporter by then. That's an amazing turnaround from importing a net 12.5 million barrels of oil per day in 2005.

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers