Energy Independence in the USA and oil price volatility

 

Energy independence is a significant factor that shows how well a particular economy is performing concerning to its natural fuels. For an economy, it is essential to perform well both in terms of economic assets independence and financial resources as well.

So, in this read, we will try to study the reasons why can’t energy independence in the USA make its way out. And for this reason, we have summarized the whole content into a few highlights which are enough to let you understand the same. 

Let’s have a cursory look at it.

What is energy independence?

Before diving into the complete concept, it would be quite better to have an insight into what “Energy Independence” is. It has been noticed that the term is explained incorrectly by many of us. Energy independence refers to adding up all of the economy's energy production comprising oil, natural gas, coal, and renewables, and then deducting the net energy consumption from it. The outcome shows the energy independence of that particular economy.

However, in this read, we will majorly be focusing on oil and gas production and the factors relating to it.

Understanding Behind-the-scene factors

The U.S. is the world’s largest producer of oil and gas despite its sourful public relations and the high volatility of the oil and gas industry. One of the major factors impacting the prices of oil is the war held between Russia and Ukraine. The war has impacted several countries adversely and has even influenced major working and pricing. 

Let’s have a look at the other factors contributing to the hurdle in energy independence in the USA, and they are:

Ample of ready-to-use federal lands: The oil and gas industry has ample federal lands that are ready for use. Among the unused lands, around 5000 lands were approved in the year 2021. The number of lands that have been approved is about 6 times the average number of wells drilled in the past 5 years. But the current data reads that the number of lands approved are higher when put against the number of wells drilled.

Plenty of unused leases at disposal: The other factor concerning this issue, is that there are plenty of unused leases at disposal which are around 10 years of unused leases at the disposal. The oil and gas industries are currently producing nearly on half of the area.  

New projects won’t cut down the prices: As per the recent study, it has been depicted that launching new projects won’t help in cutting down the prices or would lead to an increase in the supply in the short term. Energy independence in the USA is an era of plenty of fossil fuel energy. It has also been concluded that the new big oil projects are not fast, and safe. In addition to it, they are not expected to bring long-term solutions.

The Final Cut!!

The read was furnished to help in understanding the factors essential for bringing energy independence in the USA. This is so because working or improving these areas will help the whole economy to bloom and prosper. A timely and thorough monitoring of these aspects will surely help in bringing favorable outcomes.