President Barack Obama has been elected to a second term after voicing the need for U.S. energy independence. His challenger, former Massachusetts Gov. Mitt Romney, had pushed for energy independence, too, but throughout North America. A new Deloitte report, “Energy Independence and Security: A Reality Check,” however, says they might both be wrong.
The United States already enjoys significant energy independence for most sectors and much of the economy, according to the report. Transportation is the only sector that remains dependent on imports. When people say the U.S. needs a secure energy supply, they mean a secure supply of crude oil.
The report states U.S. policymakers must consider whether energy independence is necessary to achieve adequate, reliable and affordable energy supplies, and the U.S. needs a multipronged approach to meet its need for crude oil.
The U.S. must lower demand through continued improvement in vehicle fuel efficiency, and policymakers can hasten demand reduction through greater ride sharing, high-efficiency mass transportation and expansion of the electric vehicle fleet, the report states. In addition, policymakers can expand the use of alternative transportation fuels such as methanol, ethanol and natural gas.
Policymakers, according to the report, must increase domestic oil and gas production while obtaining more crude from friendly suppliers such as Canada, Mexico and numerous other nations that sell at market prices.
“While rising global demand for oil will likely keep crude prices relatively high, it also will provide a continuing stimulus for increased domestic production,” said Branko Terzic, executive director of the Deloitte Center for Energy Solutions and author of the report. “Moreover, the introduction of increasingly sophisticated enabling technologies worldwide may herald the introduction of new countries as oil suppliers and increase potential supplies from existing friendly sources.”
The report concludes that although U.S. energy independence might be unattainable in the near future, energy security remains realistic and achievable.
The report recommends policymakers continue and expand U.S. traditional policies of market pricing and consumer choice while pursuing measured and effective environmental and efficiency regulations. For example, policymakers should:
· Support the exploration and development of abundant domestic energy sources, opening additional onshore and offshore areas to oil and gas exploration.
· Support North American allies in the exploration and development of their energy sources, adding additional security to the import portion of the U.S. energy portfolio.
· Back government policies that encourage greater energy efficiency in all sectors, including transportation, industrial, commercial and residential applications.
· Favor legislation that encourages multifuel, natural gas, electric and other alternative fuel vehicle programs to diversify the U.S. base of transportation fuels and alternatives.
· Continue to support the cost-effective deployment of alternative and renewable energy sources into the energy portfolio, most notably wind and solar, to continue to diversify the nation’s base of electricity generation.
· Support research and development of clean coal and clean gas technologies to help ensure the domestically abundant and secure fuels remain as part of the U.S. energy portfolio well into the future.
· Increase research into and development of next-generation nuclear reactors, promising to be safer and more fuel-efficient than previous models.
· Develop and enact a new national nuclear fuel storage and disposal plan to help secure nuclear power as a long-term component of domestic energy supply.
· Support open markets and free trade in energy products and their derivatives, allowing markets to predominate in directing investments to balance energy supply, demand and pricing.