Getting to 92 Percent

Mark Green
Posted June 17, 2011

So, just how do we get to energy security - to the point where, by 2030, 92 percent of America's liquid fuel needs is supplied by a combination of U.S. and Canadian sources? Here's how.

Start with where we are now. According to the Energy Information Administration (EIA), the United States uses slightly more than 19 million barrels per day (mb/d) in liquid fuels - including oil, heating oil, diesel and biofuels. Of that total, 8.5 mb/d (45 percent) comes from U.S. sources, 2.33 mb/d (12 percent) from Canada and 7.2 mb/d (38 percent) from the rest of the world. Biofuels account for about 1 mb/d (5 percent).

With the right policies, by 2030 the U.S. can account for 62 percent of its liquid fuel needs and Canada 16 percent. Add in the EIA's projection that biofuels will grow to 14 percent, and you've got 92 percent of what America will need in liquid fuels supplied by a combination of domestic sources and our friend and ally to the north.

The question is, how does the U.S. expand its share from 45 percent to 62 percent, and Canada from 12 to 16 percent? Answer: Increased access.Canada first. The increase in oil supply from Canada would result from the new Keystone XL pipeline delivering an extra 830,000 barrels of oil per day a few years after it comes on line. The pipeline would link Alberta's oil sands region and U.S. refiners.

The greater increase would come from U.S. sources - specifically onshore and offshore oil, much of which currently is off-limits to exploration and development. The government estimates there are more than 116 billion barrels of oil (Bbl), classified as undiscovered, technically recoverable federal resources: Atlantic offshore (3.8 Bbl), Pacific offshore (10.5 Bbl), Gulf of Mexico deepwater (44.9 Bbl), Alaska offshore (26.6 Bbl) and Alaska onshore (18.8 Bbl). There's another 11.7 Bbl in the lower 48.

In most instances tapping this oil involves a political decision - to just do it. In Alaska, for example, the Arctic National Wildlife Refuge (ANWR) is believed to hold between 6 Bbl and 16 Bbl. Yet, allowing drilling on an airport-sized parcel inside the 19-million acre refuge has been tangled up in politics for years.

The Gulf is another example. The administration's moratorium on deepwater drilling and the slow pace of new permitting since the ban was lifted in October are projected to cut production there by 20 percent in 2012. The administration's policies stand in stark relief next to Exxon Mobil's recently announced discovery of an estimated 700 million barrels of oil in the Gulf's Keathley Canyon - hinting at reserves likely to be found elsewhere if government will simply let America's energy companies go and find it.

Energy security isn't out of reach. It hinges on recognizing that oil and natural gas is America's key energy source today and will be in the years to come. There's an opportunity to take control of our energy future with sources right here at home and in Canada. Will policymakers take it?