December 13th, 2012
06:13 PM ET

Does 'net energy self sufficiency' actually mean anything?

By Michael Levi, CFR

Michael Levi is director of the Program on Energy Security and Climate Change at the Council on Foreign Relations. This entry of  Energy, Security and Climate originally appeared here. The views expressed are his own.

A new term has been getting a lot of play in recent weeks. The International Energy Agency (IEA) kicked things off when it projected that the United States will be “almost self-sufficient in energy, in net terms” by 2035. The idea of “net energy self sufficiency” has gotten play everywhere from The Economist to Scientific American. Even a State Department blog has trumpeted projected developments using similar words.

All of this is enough to make one wonder what net energy self sufficiency means. These reports and analyses all define it the same way: the energy content of whatever energy the United States imports will be less than (or equal to) the energy content of whatever energy the United States exports. “Net imports” will thus be zero or lower.

This sounds lovely, but doesn’t actually mean much. I’ve written more than once in this space and elsewhere that oil independence (or oil self-sufficiency) is often overrated. But at least there’s a coherent theory of why the idea might make sense. In an extreme case, if cut off from imports, the United States would still be able to run its economy. Short of that, some will argue, if the United States produces the oil it consumes, its economy will be less vulnerable to price shocks. Whether one agrees or disagrees, there’s a real story to tell.

More from CFR: The Middle East's surprising energy appetite

No such case exists for why “energy self sufficiency” is worth anything. Let’s say that the United States imports five million barrels a day of oil and exports coal and gas with the same energy content. The country is now net energy self-sufficient. (This, qualitatively, is what everyone has been talking about.) Now imagine that there is a crisis and the United States is cut off from world oil markets. Is the country supposed to quickly put its previously-exported coal into its cars and trucks? How about its natural gas? Of course it isn’t. Energy self sufficiency hasn’t bought it any help. What about a spike in oil prices? U.S. consumers are still suddenly spending more money on imported oil. So long as U.S. natural gas prices are unlinked to oil prices, higher revenues from gas sales are unlikely to offset that, even in part. Bigger coal receipts certainly won’t.

In the end, being net energy self sufficient because imports and exports of different energy sources balance is a bit like being net self sufficient in round orange things because you export basketballs and import citrus fruit. It’s a nice idea, but if you’re hungry and cut off from trade, no amount of domestically produced sports equipment will help.

Topics: Energy

soundoff (6 Responses)
  1. Hahahahahahaha

    I don't know if it actually will mean anything but I know that somehow it will involve............."Tax Cuts For The Rich!!!!!!!!" Hahahahahahahaha

    December 14, 2012 at 9:48 am | Reply
  2. Just for Fun

    Broken record
    Broken record
    Broken record
    Broken record
    Broken record

    December 14, 2012 at 10:14 am | Reply
  3. Just for Fun

    When the RICH are no longer RICH due to excesive taxs then we will taxx HAHAHAHAHAHAHAHA's computer useage unit no more HAHAHAHAHAHAHAHAAH... YEA YEA YEA

    December 14, 2012 at 10:27 am | Reply
    • GOP Voter Profile

      1. Net worth less than $200,000 yet think they are rich.
      2. Primary residence has wheels or on blocks yet think they are rich.
      3. Make less than $50,000/yr yet think they are rich.
      4. Will be the people most likely to need SS & Medicare yet still vote republican.
      5. Probably work in a job funded by the government.
      6. Probably a union employee yet the republicans hate unions.
      7. Owns guns and thinks the democrats want to take them away.
      8. Racist.
      9. Has less than a full set of teeth per family.
      10. Thinks they are christian but the republicans don't like the poor, old, and sick people. Jesus likes the old, sick, and poor.
      11. Has no clue about 1-10 above.

      Which one are you?

      December 14, 2012 at 10:46 am | Reply
  4. Just for Fun

    HAHAHAHA has changed her name

    December 14, 2012 at 11:22 am | Reply
  5. Just for Fun

    None of the above

    December 14, 2012 at 1:52 pm | Reply

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