80% Energy Independence by 2015

Cheaper U.S. crude oil production is increasing but don't expect gasoline prices to drop below $3 at the pump. by John Funk, The Plain Dealer The Plain Dealer

WASHINGTON, D.C. -- The nation's dependence on foreign crude oil is steadily declining and within a year should be where it was in 1968, say federal forecasters.

The U.S. Energy Information Administration predicts that by 2015, imports of crude oil and refined fuels should fall to an average of just 21 percent as U.S. shale oil production increases. In contrast, imports accounted for about 40 percent of the petroleum and refined fuels consumed by Americans in 2012, the EIA estimates.

But don't expect the price at the pumps to tumble at the same rate that U.S. crude production increases.

Oil companies regularly export as well as import gasoline and diesel fuel, insulating the industry from demand declines at home. Those exports to distant markets link U.S. prices to global fuel prices.

And the industry is now calling for Congress to lift crude oil bans imposed in the 1970s when experts believed that U.S. production had permanently stalled. One argument is that U.S. exports would lower global oil prices. 

Imports of oil and fuels by oil companies peaked at about 60 percent in 2005, before the shale boom got under way.

Since then, U.S. oil production has been increasing monthly. The EIA estimated oil production averaged 8.6 million barrels a day in August, the highest level since 1986.

The EIA has revised its forecast for 2015 and now expects domestic crude production to average 9.5 million barrels a day next year -- the highest domestic production since 1970.

Because the cost of oil accounts for a large percentage of what consumers pay at the pump, the EIA expects average gasoline prices also to fall some, but not tumble.

The EIA figures that the national average price of gasoline in December should be about $3.18.

And the average for all of 2015, including spring price spikes, should be about $3.41 a gallon, EIA forecasters believe. That is the average price of gasoline currently in Northeast Ohio, calculates GasBuddy, the Internet-based price watchdog.

GasBuddy and its parent company, the Oil Price Information Service, or OPIS, earlier predicted the national average price of gasoline would fall to about $3.20 a gallon by the end of the year and that many stations would see prices close to $3.

Source:http://www.cleveland.com/business/index.ssf/2014/09/cheaper_us_crude_oil_productio.html