When Americans talk about ‘energy independence’ they are talking about oil and the Middle East. Forecasts that the US may become close to energy self-sufficient in net terms by 2035 have once again made this verbal icon of US energy policy a popular ‘sound bite’. But its use is both inaccurate and misleading, and without a seismic shift in American’s attitude towards transport, it is fundamentally unachievable.
Although the US now sources the majority of its oil imports from the ‘Western Hemisphere’, the perception amongst the American public that the US still imports most of its oil from the Middle East persists, along with the belief that the US main strategic priority in the region is securing its own oil imports. The United States has a broad and complex relationship with the Middle East and its energy priorities do not solely determine its strategy and presence within the region, as the US also has other non energy priorities in the region that will remain important regardless of the amount of oil that it itself imports from the region.
The conclusion that America can finally ‘pack up and leave’ the Middle East because they have entered a ‘shale energy revolution’ is too simplistic and any long-term major changes in US strategy towards the Middle East must be considered against the increasing presence and influence of China in the region, with America not wanting to be significantly displaced in the region over the coming decades.
Both the ongoing ‘shale gas revolution’ and the more recent shale oil ‘surge’ have dramatically changed the US domestic energy landscape, but the country is still, and will remain, far from ‘energy independent’. Over the next two decades, even as shale oil production peaks, the US will still import over 25 per cent of its total oil consumption. The shale oil surge and reduced oil consumption have reduced US oil import dependence significantly over the last five years, from 56 per cent in 2008 to 32 per cent in 2013. Although the huge increase in Canadian oil imports — from 16 per cent in 2004 to 32 per cent in 2013 — has significantly altered the composition of the US imports portfolio, Saudi Arabia and the wider Persian Gulf today still contribute around 20 per cent.
Increased shale oil output coupled with higher imports from both Canada and Mexico will see the relative contribution of the Persian Gulf decline in the medium-term, but as the shale oil surge tapers off in the second half of the next decade this contribution will rebound. Even during this medium-term downturn the Persian Gulf will remain one of America’s top three oil sources. The cost advantage that Persian Gulf suppliers enjoy means that there will always be a significant market for their oil in the US.
Regardless of the actual amount of oil that the US imports from the Middle East, there are still broader economic goals that it will pursue in the region. The US understands stable oil and gas exports from the Middle East to the world economy are critical. And it demonstrates this understanding by its continued ‘policing’ of the Straits of Hormuz — the world’s most important ‘oil chokepoint’, with 20 per cent of all oil traded passing through it. Even though the US contributes the majority of military assets that allow the free flow of ships through the Straits, almost 85 per cent of this oil travels to Asian markets, while only about 10 per cent actually travels to the US. As long as the US perceives threats to energy supply routes in the Middle East it will contribute its available security assets to the region.
On top of its economic goals in the region there are also significant non-energy priorities that the US will continue to pursue into the future. Blocking Iran from developing a nuclear weapon and the continued support of Israel are both examples of US priorities which can ‘trump’ its energy priorities, with past US actions in relation to these issues (US-led sanctions against Iran, the Arab oil embargo) directly and significantly reducing the supply of oil to the world market.
Additionally, any future US strategy in the Middle East must consider China. China is the world’s largest energy consumer and currently imports the majority of its oil from the Middle East. To secure its increasing energy needs China will need to increase its presence and influence in the region. As China’s ‘blue water’ naval capabilities expand in the future, it will want to increase protection of its energy supply routes — especially those in the Middle East. It will also seek to strengthen its relationship with Saudi Arabia. China’s future long-term strategy for the Middle East will increasingly threaten America’s role as the dominant exterior power in the region, which is a strong incentive for the US to maintain its position in the region.
Although reduced future US oil import dependence on the Middle East will not directly result in a wholesale shift in strategy towards the region, it will give the US slightly more flexibility in the medium-term when dealing with specific crises or countries, generally improving Washington’s relative negotiating positions.
A medium-term decrease in American oil imports from the Middle East will not result in the US redeploying one its aircraft carriers from the Persian Gulf to the Pacific, or encourage a future US Administration to lecture Saudi Arabia about the rights of women in the State Of The Union. America has broad long-term strategic goals in the Middle East and will have to pursue them carefully in the future as China strengthens its position in the region.
Ned Manning is an Energy Economist working for the Asia Pacific Foundation of Canada in Vancouver. This article first appeared in East Asia Forum. Click here to go to the original.