Recently, there have been many articles and forecasts in specialized American publications on the possibility of the United States achieving ‘energy independence’ over the next decade, starting in 2020 – four decades after President Richard Nixon announced the program for ‘Energy Independence’ to reduce U.S. reliance on foreign oil, and subsequently relieve pressures on U.S. international policies.

In an article in the Wall Street Journal, American energy expert Edward Morse states that the United States has become the fastest-growing oil and gas producer in the world, and that it is likely to remain so for the rest of this decade and into the 2020s, thanks to the start of production of shale oil and gas, in additional to conventional oil. Add to this output the oil sands production in Canada, and a likely reversal of Mexico's laws to curb the recent production decline – and the subsequent possibility of seeing exports to the United States rising. In numbers and figures, these developments mean that total oil production from the three countries in North America could rise by 11.2 million barrels/day of crude oil by 2020, or to 26.6 million barrels/day from around 15.4 million at in 2011. Furthermore, natural gas production in the United States and Canada could rise to 22 billion cubic feet/day by 2020. In fact, shale gas production accounts for a third of U.S. output of natural gas.

Based on these forecasts, Morse claims that North America is becoming the new Middle East. However, he at the same time admits that reaching output rates as such faces many hurdles, including the increasing influence of environmental groups, and pressures in Canada to impede the construction of export pipelines to the United States (with a view to retain oil in Canada and use it there instead of exporting it), as well as the fact that the bid to increase Mexican production may ‘trip over’ the Mexican Constitution, which restricts the operations of foreign companies and their investments.

Morse expects that by 2020, crude oil prices will be in the range of $ 85 per barrel, compared to their current price range of $ 120-128. This means a real GDP growth in America of about 2 to 3.3 percent, or savings of about $ 370 to 624 billion by 2020. These savings are supposed to be the result of the increase in hydrocarbon production, employment and significant improvement in the balance of payments.

Many American researchers assume that energy independence in America is the path to fostering prosperity and national security. Yet this is a very optimistic assumption, as it overlooks the challenges and realities in the markets. While it is presumed that reducing oil imports will mean that the U.S. economy can be isolated from fluctuations in the international oil market, this is in fact doubtful, as evidenced by Britain’s recent experience – wherein Britain has relied since 1980 on oil extracted from its waters in the North Sea, and despite this, local fuel prices rose and impacted the economy, especially in 2007, when prices rose by more than $ 66 per barrel in the course of one year.

As is known, oil prices are determined in the global market, and it is difficult for any entity to be isolated from these oil prices. Of course, local fuel prices vary from country to country, due to the differences in taxes levied on fuels, or otherwise subsidies provided by the government of certain nations. Such are the dynamics of oil markets.

There is a lot of posturing in the United States around presidential elections, regarding the so-called ‘blackmail’ by the oil-exporting countries of U.S. foreign policymaking. However, the truth is that America imports crude oil from more than 30 different countries. This policy has been in place for years and changes very slightly from year to year. For instance, U.S. imports of crude oil in 2007 were broken down as follows: Canada – 18 percent, Mexico - 11 percent, Saudi Arabia - 11 percent, Venezuela - 10 percent, Nigeria - 8 percent, Algeria -5 percent, Iraq - 4 percent, Angola - 4 percent, Russia - 3 percent, United Kingdom - 2 percent, Kuwait - 1 percent, Qatar - 1 percent, UAE -1 percent and 23 percent from other countries. So the truth is that when the United States defends the stability of oil supplies in international markets, it would be projecting its massive military might to defend both its interests and the interest of stability of international markets, and thus reasserting its global influence and hegemony. Moreover, the United States imports a small percentage of oil from the Arab Gulf countries, one that does not exceed 18 percent of its overall imports, more than half of which is from Saudi Arabia. What matters to Washington here hence is not its markets losing supplies or not, as much as emphasizing its role in securing global oil supplies, and subsequently, emphasizing the influence it gains as a result of this production and its effect in curbing oil price rises.

No doubt, the fact that the three Northern American countries may achieve their oil ambitions by 2020, if we assume that the path to that will be straightforward without the usual known hurdles, will mean that the United States may reduce the proportion of its crude oil imports to 40 percent of its consumption by 2020, and even 20 percent if Canada is excluded. Yet at the same time, we must take into account that such a major shift in U.S. policy will mean that the world will come to rely more on oil, and for a longer period of time.

U.S. reliance on its local oil will engender a major shift in the international oil markets. To be sure, the U.S. accounts for about one quarter of global oil consumption. However, and more importantly, the U.S. may become an oil-exporting country, as this is happening today with its gas industry. If that happens, then it could be said that the oil industry has created a new and important twist, both at the economic and political levels.

* Mr. Khadduri is a consultant for MEES Oil & Gas (MeesEnergy)