In 2020, for the first time, the United States became a net exporter of oil. This comes after over 70 years of heavy reliance on imported Fuel. 

This occurred largely through the creation of fracking technologies, allowing crude oil and natural gases to be extracted from more difficult geological settings.

However, despite producing more than it requires North America still imports large amounts of international fuels, but are there advantages to fuel protectionism and reducing the reliance on foreign imports? 

Read below for a breakdown of the advantages of Domestic fuel.    

Environmental Impact

When we talk about fuels, we tend to refer to the most commonly utilized fuels, namely coal, oil, and gas.

These are used in a variety of ways including domestic and industrial transportation, the creation of electricity, and manufacturing. 

All of these fuel varieties are classed as fossil fuels, being formed from fossilized lifeforms. Combustion of these fuels leads to the release of greenhouses gases such as carbon dioxide, contributing to climate change. 

The environmental impact of these fuels is well documented and will be largely the same no matter if the fuel is from domestic sources or international. 

The one key difference is the transportation footprint of the fuel. 

Oils and gases are often transported first via tankers, and later on large cargo vessels. This means that they require the combustion of more fuels to get them to their final destinations than those extracted and refined more locally.

Like with all the products we use, reducing how far they travel can have a significant impact on their environmental footprint. 

Security risk

The potential for fuel production and consumption to contribute to a national security risk has been muted for many years. 

Many of the main oil-producing Countries are regions that have at times been unstable. This instability can lead to less oil availability on the international market, which then leads the price to rise. 

Additionally, in some countries’ oil is used to fund extremist groups. ISIS was well known for controlling certain oil extraction areas and were able to finance much of their terrorist activities through the large amount of money made available to them from this.

Mexican cartels have also siphoned off oil from pipelines, allowing them to sell it on the black market for huge amounts of profit. 

As with all businesses involving the exchange of large amounts of money, criminal and terrorist organizations are often looking for a way to profit from them, or are already entrenched within the system. 

Human Rights Violations

Another common concern has been that many oil-producing countries have low standards of human rights, such as Saudi Arabia and Russia. Many human rights activists argue that continuing to purchase oil from such countries condones their actions.

Nowhere has this been made more blatant than in the current conflict between Russia and Ukraine. While countries across the world condemn Russia for its actions, many are heavily dependent on Russian oil and therefore are indirectly financing the war. 

The argument put forward by many politicians, however, is that we have greater influence over countries that we trade with and that as the US standards of human rights are so high, if we did not trade with anyone with lower standards, there would be no trade at all. 

Cost

This is in part because of the large amount of fracking that occurs in the US, which is a more expensive way of extracting fuels. Labour is also often cheaper in other countries. 

Oil prices are also set by a number of committees, made up of oil producers, such as the OPEC. This means that the price per barrel varies a little across countries.

Within the US, such price setting is against the law, meaning that sellers will need to be more competitive in their prices. 

As the US is heavily dependent on fossil fuels, the desire among leaders and legislators is always to keep the price as low as possible, whereas countries like Saudi Arabia always aim to increase prices as it does not negatively impact their economy. 

Additionally, import taxes and transportation will add to the price of imported fuels, though this doesn’t always mean it is more expensive than domestic fuels. 

Dependence 

Independence can be particularly vital in times of conflict. To continue with the Russian conflict example, Germany depends on Russian oil for 25% of its national oil consumption and gas for 40% of its national gas consumption. This dependence has prevented it from being able to impose the same sanctions against Russia as other countries.

Even if Germany decided to implement sanctions its dependency would cause these to have a negative effect on its economy and therefore its citizens.   

While full independence in an age where global connectivity is so readily available may not be possible or even desirable, many countries around the world are looking at where they can be more self-reliant. 

This may not always be in a bid to cut themselves off from the rest of the world, but simply be a move towards greater sustainability, transparency, and self-sufficiency. 

For example, in many countries, there are drives to produce food locally rather than buying it in from abroad, or to subsidize important industries. 

Oil and gas too can be seen in this light, with opinions favoring the idea that if a product can be produced within the US, then that should be preferred to importing items from elsewhere in the world. 

Final thoughts

The consumption of fuel has risen sharply in recent decades, often more quickly than production is able to keep pace with, yet today fuel production within the US is allowing a choice to be made of whether to buy from abroad or at home. 

Buying domestic fuel can have many advantages, from lower transportation costs and environmental footprint to better ethics. 

However, with the use of renewable energies steadily rising it may not be too long before the question isn’t where to buy oil, but choosing between domestic energy of a different kind; such as wind or solar. 

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