October 31, 2008

The Growth of Dependence: US Oil Imports from 1950

This graph from the Energy Information Administration shows US production declining from a peak of 10 million barrels per day in the early 1970s to only 6 mbd by 2007. Consumption fell steeply in the 1970s as the economy fell into recession from the two oil shocks, but rose again when oil prices collapsed in 1985. Net imports are now some 12 mbd.
Questions: is it likely that net imports will fall further under the impact of domestic recession? Can the United States make up the gap between production and consumption by more production? What are the costs of this dependency?

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