Over the last six years, net oil imports have fallen by 33% to
average 8.4 million barrels per day (Mb/d) in 2011. This represents
45% of domestic consumption, down from 60% in 2005. Oil is a
critical resource for the U.S. economy, but despite policy makers'
longstanding concern, U.S. oil imports had generally increased for
decades until peaking in 2005. Since then, the economic downturn
and higher oil prices were a drag on oil consumption, while
price-driven private investment and policy helped increase domestic
supply of oil and oil alternatives. Net imports are gross imports
minus exports. The decline in net imports has manifested itself as
a decrease in gross imports and an increase in exports of petroleum
products. Gross U.S. imports of crude oil and petroleum products
averaged 11.4 Mb/d in 2011, down 17% since 2005. More than a third
of gross imports came from Canada and Mexico in 2011. About 40%
came from members of the Organization for the Petroleum Exporting
Countries (OPEC), mostly from OPEC members outside the Persian
Gulf. Regionally, the largest share of U.S. imports come into the
Gulf Coast region, which holds about half of U.S. refining capacity
and sends petroleum products to other parts of the country and
abroad. All regions of the country import more crude than refined
products except for the East Coast, where petroleum products
imports may rise further due to refinery closures. U.S. oil
exports, made up almost entirely of petroleum products, averaged
2.9 Mb/d in 2011. This is up from export of 1.2 Mb/d in 2005, led
by growing export of distillates (diesel and related fuels) and
gasoline. More than 60% of U.S. exports went to countries in the
Western Hemisphere, particularly to countries such as Mexico and
Canada from which the U.S. imports crude oil. Exports occur largely
as a result of commercial decisions by oil market participants
which reflect current oil market conditions as well as past
investment in refining. As a result, net oil imports fell from a
peak of 12.5 Mb/d in 2005 to 8.4 Mb/d in 2011, their lowest level
since 1995. A consensus is generally emerging among energy analysts
that U.S. oil imports may be past their peak, reached in 2005.
Imports as a share of consumption are expected to fall further, to
less than 40% after 2020 driven by tighter fuel economy standards
and increased domestic supply. Despite the decline in net import
volumes, the cost of net imports has increased due to rising oil
prices. The aggregate national cost of oil imports is a function of
the volume of oil imported and the price of that oil. The United
States spent about $327 billion on net oil imports in 2011. Being a
net importer of a particular good is not necessarily negative for
an economy, but greater national oil import dependence can amplify
the negative economic impacts of oil price increases. Oil import
and export developments pose a host of policy issues. Concerns
about import dependence continue to generate interest in policy
options to directly discourage imports or to reduce the need for
imports by increasing domestic supply and decreasing demand. Rising
exports at a time of rising prices has led to calls for policies to
restrict such trade. The debate around the Keystone XL pipeline
involves concerns about imports, exports, and the environment. The
rising cost for fuels has led to calls for release of the Strategic
Petroleum Reserve, meant to provide a short term policy option in
case of supply disruptions. Policy options may entail various
economic, fiscal, and environmental trade-offs.
General
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