Much has been made over the years about the vital importance of reducing our dependence on foreign oil. In fact, President Obama vowed recently to reduce oil imports by a third by 2025. Given the lengths that his administration has been going to to prevent increases in domestic oil production, meeting this goal would be enormously costly to the U.S. economy. But what about the goal itself? Just how dependent are we on foreign oil?
Well, it turns out that we are less dependent than we used to be, although that has more to do with our weak economy than anything else. More importantly, however, the whole notion of oil dependence is more than a bit strained. This is because two of the most important sources of foreign oil really aren't all that foreign. That is, Canada and Mexico, our friendly neighbors and NAFTA trading partners, provided more than a third of our net crude oil and petroleum product imports in 2010. In fact, Canada alone accounted twice as much as did Saudi Arabia.
If we are concerned with national security and the geopolitical risks associated with oil dependency, then certainly imports from these countries should not count toward a measure of the risks we face. Specifically, in 2010, nearly 70 percent of our crude oil and petroleum products came from within NAFTA. Although some believe that Mexico's oil output is set to go into decline, Canada's is bound to increase as new technologies become available to exploit its tar sands, and hemispheric neighbors such as Brazil are becoming major oil producers. Plus, the ongoing natural gas revolution and discoveries of new sources of domestic oil will mean less reliance on foreign energy sources than was thought possible even a couple of years ago.
