Energy Independence Achieved
Quietly, the United States economy passed an extraordinary milestone. As of October, America became energy independent for the first time. As recently as 2008, the U.S. had spent 4% of its gross domestic product to purchase foreign oil and gas.
The shift is from a dramatic increase in crude oil and natural gas production from American wells. The U.S. is now the largest exporter of petroleum products –greater than (#2) Russia and (#3) Saudi Arabia. In addition, analysts expect output to accelerate from current levels.
There has also been a modest but significant acceleration in renewable energy. Today, according to a recent article in Fortune magazine, approximately 18% of all electricity in the U.S. is produced by solar, wind and hydroelectric dams. Since 2008, renewables’ share of U.S. production has doubled, while coal’s share has declined from 48% to 30%.
Energy independence, of course, has consequences for the economy. If OPEC attempts to lower production to raise energy prices, the U.S. economy many not be impacted as our facilities can increase output. The U.S. trade balance should also improve since we are now importing less energy.