Energy Independence?

I read daily that America's shale oil revolution means we are finally on our way to being energy independent. If so, does that mean our national security interests no longer require American troops to defend foreign oil imports from the Middle East? But more importantly to you and me, will we pay less at the pump if we are more energy independent?

Defining what energy independence means is important. Less than twenty years ago, I was part of a petition effort to get the Clinton administration to declare our then fast-growing reliance on overseas oil a threat to our national security and our economic well-being. Being free from dependence on foreign oil is a critical, because we spend so much in American lives and livelihood to defend foreign sources of oil.

Let's look at the facts. U.S. production could exceed imports by October of this year for the first time since early 1995.

OPEC and Saudi Arabia has, so far, played down the significance of rising U.S. shale oil production, despite the fact that some OPEC members in West Africa such as Nigeria and Algeria, have seen a sharp drop in their exports to the U.S.

But in sharp contrast to public statements by OPEC, recent news reports state that Saudi oil billionaire Prince Al-Waleed bin Talal sent an open letter to several of the ministers warning that the rising U.S. energy production is a threat to all of OPEC including Saudi Arabia because its economy is so oil-dependent (92 percent).

This new shale oil production has certainly changed winners and losers in the global world market for oil revenues. While the OPEC's oil export revenue hit record levels in 2012 according to a recent report, there is obvious concern it can be sustained. OPEC's own projections expect a over half-a-million barrel reduction next year because of increased production outside of OPEC. All the while, U.S. oil company production revenues are climbing.

If this trend continues, we will be less dependent on OPEC oil imports -- even the Saudis -- and more energy independent as a nation.

So does energy independence translate into a reduction in military spending to protect OPEC oil? That is less clear, as the Middle East continues to be a national security interest of the U.S., and oil industry infrastructure is an attractive targets for terrorist groups in that part of the world. With the price of oil even in the U.S. set by world markets, any major disruption still has a huge impact on the price of oil and thus the price of our gasoline.

So if you are thinking that energy independence is going to save you money at the pump, think again.