Why are oil imports falling?

A recent article in the Washington Post proclaims that U.S. oil imports are falling to their lowest level since 1987. The decrease in imports is a combination of two things, Americans using less oil because of an economic downturn and increased domestic production. The increase in domestic production can be attributed to the increased usage of hydraulic fracturing (“fracking”) and directional drilling to unlock oil from the many, vast shale formations the United States is blessed with.

Increasing domestic production begins to put to bed the notion that our nation does not have much oil. In fact, we have tons of oil. Our vast reserves and increased production have led the International Energy Agency (IEA) to predict the United States to overtake Saudi Arabia and Russia as the world’s largest oil producer by 2017.

Every American should welcome this prediction of the U.S. leading the world in oil production with open arms. The oil industry is responsible for many high-paying jobs and supports many other indirect jobs that our country could certainly use right now.

The main thing threatening this prediction from happening is the federal government. The increase in oil production has been mainly on state and private lands because of the arduous permitting and regulation on federal lands. It takes roughly 300 days to receive a permit to drill on federal lands, but can take as little as 10 in some states. The old saying “time is money” is incredibly appropriate to understand why oil companies are staying away from federal lands.

At the beginning of President Obama’s second term, it will be interesting to see if any progress is made to open up more federal lands to oil and gas development which will provide high-paying jobs, more affordable and reliable energy, and ultimately more energy security. With many predictions American energy independence, will President Obama and the federal government make it a priority to achieve energy independence or will we see more regulatory hurdles impeding development of our natural resources? Only time will give us the answer, let’s hope Mr. President picks the right one.