True energy independence is more than a supply-demand equation. For starters, energy independence should mean freedom from gasoline price spikes caused by unstable foreign nations.
MC3 Ryan Mayes/US Navy/AP File
America's oil boom is generating talk of something unthinkable five years ago: energy independence. But true energy independence means more than the United States supplying all its own oil.
It means that the price of America's oil is no longer set by countries in some of the most unstable regions of the world. It means that the consumer and the Department of Defense are no longer at the mercy of energy price spikes. And it means that we are able to protect our national security interests and our environmental health.
The good news is that, given present trends, we can achieve all that in the next few years. The challenge is that we can't do it by relying on oil alone.
For the average US consumer, the idea that the gas she pumps comes from Texas or North Dakota may be heartening on a theoretical level, but as a practical matter she measures her energy independence by the impact of energy prices on her wallet. There, the trends aren't heartening. In 2012, the average US household spent $257 more to fuel the family car than the year before, even while using far fewer gallons. As Americans take off for the July 4 holiday, they will drive 0.8 percent less than last year, according to the AAA, because their finances are squeezed.
Those cutbacks in driving, as beneficial as they might be to the environment, are slowing consumer spending and job creation. According to the chief US economist at Barclays Capital, every $10 increase in the price of oil shaves about 0.2 percentage points off America’s growth rate and raises unemployment by 0.1 percentage points.
It's just not the consumer who's feeling the pinch. For every $1 increase in the price of oil, the Defense Department’s fuel costs rise by $30 million. Rising fuel prices could cost the US military an extra $1 billion this year.
While consumers can cut back their fuel use, the US military can’t. Already the single largest fuel consumer in the US, the US military needs even more as the Pentagon seeks to protect US soldiers with more heavily armored equipment. To pay for rising fuel costs, the military must cut back in other areas, such as new equipment and troop training, all the while deploying men and women around the world to defend oil shipping lanes – at a cost of $80 billion each year.
Our environment also demands a broader definition of energy independence. Petroleum-based transportation fuels contain air pollutants, such as sulfur, and toxic aromatics, such as benzene, that contribute to unhealthy ozone formation and actually inhibit the effectiveness of automobile emission-control equipment.
So what's the answer? Ask our military. Convinced of the strategic vulnerability of relying on a single source of fuel, the Defense Department has pushed ahead with various renewable energy projects, including biofuels. Biofuels are also a key to improving the environmental health of Americans.
For example: Eliminating sulfur and aromatics from gasoline – which can be done by increasing the use of biofuels – would save Americans $8 billion in annual health-care costs associated with asthma and other respiratory ailments by 2030.
Biofuels contribute more to our environmental health. The US is beginning to rely on marginal sources of oil that have significantly more emissions than traditional sources. Biofuels are required by law, under the US Renewable Fuel Standard, to measurably reduce emissions compared with a 2005 baseline for gasoline. But there is no such requirement for fossil fuels. Halting America’s growth in use of biofuels now would actually leave us worse off over time if we don’t end our reliance on environmentally damaging sources of oil.
America’s approach to energy independence must achieve more than just a temporary reduction in oil imports. The US Energy Information Administration recently projected that the nation would increase reliance on imported oil through 2040, if we decreased domestic renewable fuel production. As our military leaders have recognized, we must end permanently our reliance on a single source of fuel and prevent environmental degradation. US biofuel producers are helping to achieve these goals.
– Brent Erickson is executive vice president in charge of the industrial and environmental section at the Biotechnology Industry Organization, a biotech trade association based in Washington, D.C.