(John Licata is the founder and chief energy strategist at Blue
Phoenix. The opinions expressed here are his own.)
By John Licata
July 11 Whether or not you follow the energy
markets, it's very likely you've heard the phrase "U.S. energy
independence" at one time or another in recent years. Yet the
very notion that the United States can be completely
self-sufficient when it comes to supplying our domestic need for
energy consumption is seriously flawed for a number of reasons
ranging from population growth, pure economics, a lack of public
policy and a dated permitting process vital to commercialize new
energy projects. Collectively, this should have Americans
questioning whether U.S. power production can be enough to
completely eliminate the need for foreign energy sources.
The biggest use for energy is electricity. Using 2013 data
from the Energy Information Administration (EIA), in order to
produce electricity in the United States, we used a total of
4,058,209 thousand megawatt-hours last year of which 39 percent
was supplied from coal, 27 percent from natural gas, 19 percent
came from nuclear, 7 percent from hydropower, 6 percent from
other renewables, 1 percent from petroleum and less than 1
percent from other gases. So, despite the Obama administration's
efforts to help fight carbon emissions, coal still dominates in
the United States. In fact, according to a recent EIA Short-Term
Energy Outlook (STEO), the allure of cheaper coal has actually
fostered its greater use to offset an increase in natural gas
Coal, of course, releases an enormous amount of carbon
dioxide when it's burned.
On the one hand, we're boosting our independence by using
our own coal supply to produce electricity, but on the other,
the whole environmental argument may be being shoved under the
rug because of it. This suggests the United States can't be
energy independent and simultaneously win the war on carbon.
Something has to give. We don't have enough clean domestic
energy supply to produce electricity if we abandon domestic coal
and simultaneously close perfectly good nuclear plants. Instead,
we need more nuclear power since its use won't add to carbon
Here's the problem. The United States consumes 55 million
pounds of uranium per year, yet only produces 4 million pounds.
The rest comes from places such as Kazakhstan and Australia. We
already import 93 percent of our enriched uranium, so in
reality, our reliance on foreign enriched uranium is far greater
than our dependence on foreign oil.
Another issue weighing on energy independence is a growing
U.S. population. During the recent economic recession,
population growth slowed, according to the U.S. census bureau.
The reason often cited is that a large number of people felt
financially insecure, causing them to reconsider starting
families. Considering the Federal Reserve is now a bit more
optimistic about U.S. job market, it's not unreasonable to think
fertility rates may once again be on the rise. Bottom line: More
people means more future energy demand that the U.S. will be
challenged to satisfy.
Then there's the hydraulic fracturing (fracking) boom. The
technique, which involves pumping a mixture of water and
chemicals into shale deposits at high pressures, has given the
United States access to vast new oil and natural gas supplies.
But instead of using more of that new-found energy booty
here at home, politicians believe we should export excess
supplies. The problem here is that the shale movement was
supposed to be by Americans for Americans. So why not first run
domestic refiners at full capacity and store the extra oil?
Consider this: As of June 20, 2014, the Strategic Petroleum
Reserve (SPR), the nation's piggybank for oil, contained 691
million barrels. Capacity for the SPR is 727 million barrels so
isn't talk of exporting our oil premature since we could keep
gasoline prices low and further lessen our dependence on foreign
oil during any crisis by tapping a full SPR right here at home?
As for natural gas, if it's seen as the ultimate catalyst
for energy independence, why would we export it when more
Americans are using it to heat and power their homes?
Additionally, there are those, including legendary energy man T.
Boone Pickens, who believe we should tap excess natural gas to
fuel the trucking sector. If we can use more natural gas here at
home, we could further decrease our reliance on foreign energy.
However, if the United States now uses our excess natural gas
for exports or as a political weapon to weaken Russia's position
over Ukraine and Europe, we risk delaying our own goal of
becoming energy independent.
Moving to renewables. I'm a big a believer in the future of
geothermal, solar and wind power. However, geothermal is still
being researched, the sun doesn't always shine and wind doesn't
always blow. Costs are being driven down to make renewables more
competitive with fossil fuels, but mainstream energy storage
solutions are still needed to make renewables, which only
account for 10 percent of our current energy mix, play a bigger
role in helping the United States become more energy
At the end of the day, the United States can't be energy
independent without a true national energy policy. We need to
seriously rethink exporting natural gas and closing nuclear
plants at a time where sustainability meets reality head on. Our
newly found oil and gas supplies need to help Americans before
they help the rest of the world. Therefore politicians should be
pushing for innovation here at home to lower energy prices, not
create an environment where our supposed energy independence
creates even more dependence on foreign energy.