Increasing domestic production of oil won’t significantly boost energy security in the United States, according to a report by the Congressional Budget Office.
The CBO advocated policies that reduce demand for oil, such as promoting more fuel-efficient and alternative-fuel vehicles.
“Policies that promoted greater production of oil in the United States would probably not protect U.S. consumers from sudden worldwide increase in oil prices, even if increased production lowered the world price of oil on an ongoing basis,” the report noted. “In fact, such lower prices would encourage greater use of oil, thus making consumers more vulnerable to increases in oil prices.”
The report, released Wednesday, assessed the nation’s ability to withstand disruptions to its energy supply.
The United States is more susceptible to disruptions in the crude oil than other types of energy, because the nation relies heavily on crude oil for transportation. Also, the U.S. maintains a larger stock of natural gas and coal than it does for oil, the report noted.
Further, the lack of fuel diversity for transportation makes U.S. transportation system highly susceptible to the oil market. By comparison, the nation’s electric power is generated from a portfolio of sources, including coal, natural gas and renewables.
“The United States has no alternatives that can be readily substituted in large quantities for oil in providing fuel for transportation,” the CBO noted. “Consumers have less flexibility in the near term in how they use transportation.”
The CBO also produced an inforgraphic to visualize the results of its report.