Guest blog by S. A. Shelley Absolutely, the United States can become energy self-sufficient, but it is unlikely to become self-sufficient in oil production. Since the end of last year and the beginning of this year, several governmental and intra- governmental bureaucracies, independent think-tanks of all sorts and large energy producing companies have issued annual energy outlooks in one form or another. I characterize them as "Business as Usual" (BP, Exxon, etc.), "Business is Changing" (Shell, Carbon Tracking Institute, etc.) and "Fanciful Delusion" (OPEC). In all forms these reports are interesting reading. But let’s focus on the United States and the Energy Information Agency’s annual report released in January. The most optimum forecast indicates that the United States by 2040, may be able to produce about 17 million bbls/day of oil (“high production case”). At worst, the United States will be producing around 7 million bbls / day (“low production case”). The forecasts for consumption by 2040 could be around 20 million bbls / day in the “high consumption” scenario or as low as 7 million / bbls day in the “low consumption” scenario. These can be illustrated like this: [caption id="attachment_353" align="alignleft" width="474"] US Oil Supply Balance Scenarios[/caption] You can assign various probabilities to the production and consumption scenarios, based upon your best interpretation of the underlying data and assumptions to the report, or even based upon voodoo, to determine a probability of deficit or surplus. I arrive at a probability of 78% that the United States will be in oil deficit by 2040, and probably forever after, if the country continues along the business as usual path. Some of the assumptions about increasing oil production that the EIA includes in its high production, most optimal case include continuing technology improvements for enhanced oil recovery, new tight shale oil discoveries, using more optimistic production assumptions and opening the offshore of the lower 48 states to oil production. Current legislation precludes exploration and production in the Eastern Gulf of Mexico until at least 2022, but the EIA energy outlook includes such production from 2022 onwards, clearly over-optimistic. In addition, the EIA values for technically recoverable reserves include offshore Atlantic, Pacific (California) and Alaska estimates. While the amount of oil in these areas is low compared to current Western Gulf of Mexico estimates, the potential reserves could be underestimated due to the lack of exploration activity in those basins. In the best case, if all technology works perfectly, and folks in Florida or California don’t object to oil rigs offshore, then maybe we can live with a small deficit and importing oil from regional neighbors. For small amounts, there are Mexico and Canada. But in the worst case, we’ll be importing large volumes of oil from Nations with dubious democratic values and not so friendly to us. If we can’t produce enough and don’t curb our demand, then we could end up paying too much money and too many lives of our soldiers, sons and daughters, to foreign regimes. What can we control? In the way of production, not much: offshore oil production won’t happen in California, and Florida will also fight it, and without those areas, there is no “high production” scenario. In the way of consumption, we can have more control. If Detroit automakers can roll back the CAFE mileage requirements (Corporate Average Fuel Economy) and folks continue to drive low mileage hulks, demand will be high. But if disruptive technologies such as electric vehicles, low power lighting, and renewable energy with storage, take hold, then demand will be low. Once upon a time, it was said that “What’s good for America is good for GM”. Maybe it is time to rethink that.