U.S. Oil Imports and Exports

Neelesh Nerurkar
Specialist in Energy Policy

Over the last six years, net oil imports have fallen by 33% to average 8.4 million barrels per day (Mb/d) in 2011. This represents 45% of domestic consumption, down from 60% in 2005. Oil is a critical resource for the U.S. economy, but despite policy makers’ longstanding concern, U.S. oil imports had generally increased for decades until peaking in 2005. Since then, the economic downturn and higher oil prices were a drag on oil consumption, while price-driven private investment and policy helped increase domestic supply of oil and oil alternatives. Net imports are gross imports minus exports. The decline in net imports has manifested itself as a decrease in gross imports and an increase in exports of petroleum products.

Gross U.S. imports of crude oil and petroleum products averaged 11.4 Mb/d in 2011, down 17% since 2005. More than a third of gross imports came from Canada and Mexico in 2011. About 40% came from members of the Organization for the Petroleum Exporting Countries (OPEC), mostly from OPEC members outside the Persian Gulf. Regionally, the largest share of U.S. imports come into the Gulf Coast region, which holds about half of U.S. refining capacity and sends petroleum products to other parts of the country and abroad. All regions of the country import more crude than refined products except for the East Coast, where petroleum products imports may rise further due to refinery closures.

U.S. oil exports, made up almost entirely of petroleum products, averaged 2.9 Mb/d in 2011. This is up from export of 1.2 Mb/d in 2005, led by growing export of distillates (diesel and related fuels) and gasoline. More than 60% of U.S. exports went to countries in the Western Hemisphere, particularly to countries such as Mexico and Canada from which the U.S. imports crude oil. Exports occur largely as a result of commercial decisions by oil market participants which reflect current oil market conditions as well as past investment in refining.

As a result, net oil imports fell from a peak of 12.5 Mb/d in 2005 to 8.4 Mb/d in 2011, their lowest level since 1995. A consensus is generally emerging among energy analysts that U.S. oil imports may be past their peak, reached in 2005. Imports as a share of consumption are expected to fall further, to less than 40% after 2020 driven by tighter fuel economy standards and increased domestic supply.

Despite the decline in net import volumes, the cost of net imports has increased due to rising oil prices. The aggregate national cost of oil imports is a function of the volume of oil imported and the price of that oil. The United States spent about $327 billion on net oil imports in 2011. Being a net importer of a particular good is not necessarily negative for an economy, but greater national oil import dependence can amplify the negative economic impacts of oil price increases.

Oil import and export developments pose a host of policy issues. Concerns about import dependence continue to generate interest in policy options to directly discourage imports or to reduce the need for imports by increasing domestic supply and decreasing demand. Rising exports at a time of rising prices has led to calls for policies to restrict such trade. The debate around the Keystone XL pipeline involves concerns about imports, exports, and the environment. The rising cost for fuels has led to calls for release of the Strategic Petroleum Reserve, meant to provide a short term policy option in case of supply disruptions. Policy options may entail various economic, fiscal, and environmental trade-offs.


Date of Report: April 4, 2012
Number of Pages: 36
Order Number: R42465
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Hydraulic Fracturing: Chemical Disclosure Requirements

Brandon J. Murrill
Legislative Attorney

Adam Vann
Legislative Attorney

Hydraulic fracturing is a technique used to free oil and natural gas trapped underground in lowpermeability rock formations by injecting a fluid under high pressure in order to cause cracks in the formations. The composition of a fracking fluid varies with the nature of the formation, but typically contains mostly water; a proppant to keep the fractures open, such as sand; and a small percentage of chemical additives. Some of these additives may be hazardous to health and the environment. The Shale Gas Production Subcommittee of the Secretary of Energy Advisory Board (SEAB) has recommended public disclosure, on a well-by-well basis, of all of the chemical ingredients added to fracking fluids, with some protection for trade secrets.

Currently, no such law or regulation exists at the federal level. In his 2012 State of the Union Address, President Barack Obama said he would obligate “all companies that drill for gas on public lands to disclose the chemicals they use,” citing health and safety concerns. Not long afterward, the draft of a proposed fracking chemical disclosure rule from the Bureau of Land Management (BLM) was disclosed. This draft rule would require companies employing hydraulic fracturing on lands managed by BLM to disclose the content of the fracking fluid. In addition, there have been legislative efforts in the 112th Congress. H.R. 1084 and S. 587, the Fracturing Responsibility and Awareness of Chemicals Act (FRAC Act), would create more broadly applicable disclosure requirements for parties engaged in hydraulic fracturing.

Chemical disclosure laws or proposals at the state level vary widely. Of the 11 current laws and three proposals examined in this report, only a few require direct public disclosure of chemical information by mandating that parties post the information on the FracFocus chemical disclosure website. The level of detail required to be disclosed often depends on how states protect trade secrets, as these protections may allow submitting parties to withhold information from disclosure at their discretion or to submit fewer details about proprietary chemicals, except, perhaps, in emergencies. Even if a disclosure law does not protect information from public disclosure, other state laws, such as an exemption in an open records law, may do so. States also have varying laws regarding the timing of these disclosure requirements.

This report provides an overview of current and proposed laws at the state and federal levels that require the disclosure of the chemicals added to the fluid used in hydraulic fracturing. Appendix A provides a glossary of many of the terms used in this report. Appendix B contains a table summarizing the fracking chemical disclosure requirements described in this report. For an overview of the relationship between hydraulic fracturing and the Safe Drinking Water Act (SDWA), including a discussion of baseline water testing issues, see CRS Report R41760, Hydraulic Fracturing and Safe Drinking Water Act Issues, by Mary Tiemann and Adam Vann.


Date of Report: April 4, 2012
Number of Pages: 21
Order Number: R42461
Price: $29.95

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The Strategic Petroleum Reserve: Authorization, Operation, and Drawdown Policy

Anthony Andrews
Specialist in Energy and Defense Policy

Robert Pirog
Specialist in Energy Economics

Congress authorized the Strategic Petroleum Reserve (SPR) in the 1975 Energy Policy and Conservation Act (EPCA) to help prevent a repetition of the economic disruption caused by the 1973-1974 Arab oil embargo. EPCA specifically authorizes the President to draw down the SPR upon a finding that there is a “severe energy supply interruption.” The meaning of a “severe energy supply interruption” has been controversial. The authors of EPCA intended the SPR only to ameliorate discernible physical shortages of crude oil. Historically, increasing crude oil prices typically signal market concerns for supply availability. However, Congress deliberately kept price trigger considerations out of the President’s SPR drawdown authority because of the question about what price level should trigger a drawdown, and the concern that a price threshold could influence market behavior and industry inventory practices. International Energy Agency member countries (which include the United States) have committed to maintaining emergency reserves equal to 90 days of net crude oil imports, developing programs for demand restraint in the event of emergencies, and agreeing to participate in allocation of oil deliveries among the signatory nations to balance a shortage.

The Department of Energy (DOE) manages the SPR, comprised of five underground storage facilities, solution-mined from naturally occurring salt domes in Texas and Louisiana. The 2005 Energy Policy Act authorized SPR expansion to a capacity of 1 billion barrels, but physical capacity expansion of the SPR has not proceeded beyond 726.6 million barrels. The SPR’s maximum drawdown capacity is 4.4 million barrels per day, based on the capacity of the pipelines and marine terminals that serve it. Legislation restricts SPR sales to no more than 30 million barrels over a 60-day period for anything less than a severe energy supply interruption.

Congress initially appropriated funds to fill the SPR through crude oil purchases, but ended that practice in 1994. In 2000, the Department of Energy began acquiring oil to fill the SPR through the royalty-in-kind (RIK) program. In lieu of paying cash royalties on Gulf of Mexico leases, producers diverted a portion of their production volume to the SPR. The Secretary of the Interior terminated the RIK program in 2011.

Sales and loans of crude from the SPR have been carried out for several different reasons. The 1990 Energy Policy and Conservation Act Amendments expanded SPR drawdown authority to include responding to short term supply interruptions stemming from situations internal to the United States. U.S. Presidents have authorized emergency sale of SPR crude during the 1990 Persian Gulf War, in the aftermath of Hurricanes Katrina and Rita in 2005, and after a prolonged disruption of Libyan crude in 2011. After civil unrest in Libya curtailed its crude oil production in the spring of 2011, and speculative bidding began driving up global crude oil prices, President Obama ordered an SPR auction to satisfy International Energy Agency treaty obligations. In addition to these emergency sales, the Department of Energy, from time-to-time, has conducted drawdowns to test the SPR system, make loans to help refiners bridge temporary supply disruptions, and generate revenue for budget deficit reduction.

The 30.64 million barrel SPR sale in 2011 reduced the SPR’s inventory from 726.6 million barrels to 695.9 million barrels. The SPR currently holds the equivalent of 80 days of import protection (based on 2012 data of 8.72 million barrels per day of net petroleum imports).


Date of Report: April 2, 2012
Number of Pages: 21
Order Number: R42460
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Energy Storage for Power Grids and Electric Transportation: A Technology Assessment

Paul W. Parfomak
Specialist in Energy and Infrastructure Policy

Energy storage technology has great potential to improve electric power grids, to enable growth in renewable electricity generation, and to provide alternatives to oil-derived fuels in the nation’s transportation sector. In the electric power system, the promise of this technology lies in its potential to increase grid efficiency and reliability—optimizing power flows and supporting variable power supplies from wind and solar generation. In transportation, vehicles powered by batteries or other electric technologies have the potential to displace vehicles burning gasoline and diesel fuel, reducing associated emissions and demand for oil.

Federal policy makers have become increasingly interested in promoting energy storage technology as a key enabler of broad electric power and transportation sector objectives. The Storage Technology for Renewable and Green Energy Act of 2011 (S. 1845), introduced on November 10, 2011, and the Federal Energy Regulatory Commission’s Order 755, Frequency Regulation Compensation in the Organized Wholesale Power Markets, are just two recent initiatives intended to promote energy storage deployment in the United States. Numerous private companies and national laboratories, many with federal support, are engaged in storage research and development efforts across a very wide range of technologies and applications.

This report attempts to summarize the current state of knowledge regarding energy storage technologies for both electric power grid and electric vehicle applications. It is intended to serve as a reference for policymakers interested in understanding the range of technologies and applications associated with energy storage, comparing them, when possible, in a structured way to highlight key characteristics relevant to widespread use. While the emphasis is on technology (including key performance metrics such as cost and efficiency), this report also addresses the significant policy, market, and other non-technical factors that may impede storage adoption. It considers eight major categories of storage technology: pumped hydro, compressed air, batteries, capacitors, superconducting magnetic energy storage, flywheels, thermal storage, and hydrogen.

Energy storage technologies for electric applications have achieved various levels of technical and economic maturity in the marketplace. For grid storage, challenges include roundtrip efficiencies that range from under 30% to over 90%. Efficiency losses represent a tradeoff between the increased cost of electricity cycled through storage, and the increased value of greater dispatchability and other services to the grid. The capital cost of many grid storage technologies is also very high relative to conventional alternatives, such as gas-fired power plants, which can be constructed quickly and are perceived as a low risk investment by both regulated utilities and independent power producers. The existing market structures in the electric sector also may undervalue the many services that electricity storage can provide. For transportation storage, the current primary challenges are the limited availability and high costs of both battery-electric and hydrogen-fueled vehicles. Additional challenges are new infrastructure requirements, particularly for hydrogen, which requires new distribution and fueling infrastructure, while battery electric vehicles are limited by range and charging times, especially when compared to conventional gasoline vehicles.

Substantial research and development activities are underway in the United States and elsewhere to improve the economic and technical performance of electricity storage options. Changes to market structures and policies may also be critical components of achieving competitiveness for electricity storage devices. Removing non-technical barriers may be as important as technology improvements in increasing adoption of energy storage to improve grid and vehicle performance.


Date of Report: March 27, 2012
Number of Pages: 146
Order Number: R42455
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Energy Tax Policy: Issues in the 112th Congress

Molly F. Sherlock
Specialist in Public Finance

Margot L. Crandall-Hollick
Analyst in Public Finance

Energy tax policy has been actively debated in the 112th Congress. Much of this debate has centered around proposals in the President’s FY2012 and FY2013 budgets, proposals to eliminate certain tax preferences, and proposals to extend other expired or expiring provisions. The Obama Administration has proposed a number of changes in energy tax policy with the intent of correcting perceived distortions in the market and encouraging conservation and the use of renewable energy. Specifically, the Administration seeks to eliminate a number of existing tax incentives for fossil fuels. Further, the Administration has proposed expanding select incentives for commercial-building energy efficiency, extending incentives to promote manufacturing of advanced energy technologies, extending certain renewable energy incentives, and modifying incentives for alternative technology vehicles. In early 2012, Congress considered the possible extension of certain temporary energy tax provisions, which had either expired at the end of 2011 or were scheduled to expire in coming years (see S.Amdt. 1812 to S. 1813 and S. 2204). S. 2204 would pay for the extension of certain expired and expiring provisions by eliminating certain tax incentives for oil and gas. Many of the provision that expired at the end of 2011 were previously granted a temporary extension as part of the Tax Relief, Unemployment Reauthorization, and Job Creation Act (P.L. 111-312), enacted in December 2010.

Energy tax policy involves the use of one of the government’s main fiscal instruments, taxes (both as an incentive and as a disincentive) to alter the allocation or configuration of energy resources and their use. In theory, energy taxes and subsidies, like tax policy instruments in general, are intended either to correct a problem or distortion in the energy markets or to achieve some economic (efficiency, equity, or even macroeconomic) objective. In practice, however, energy tax policy in the United States is made in a political setting, determined by fiscal dictates and the views and interests of the key players in this setting, including policymakers, special interest groups, and academic scholars. As a result, enacted tax policy embodies compromises between economic and political goals, which could either mitigate or compound existing distortions.

The economic rationale for government intervention in energy markets is commonly based on the government’s perceived ability to correct for market failures. Market failures, such as externalities, principal-agent problems, and informational asymmetries, result in an economically inefficient allocation of resources—in which society does not maximize well-being. To correct for these market failures governments can utilize several policy options, including taxes, subsidies, and regulation, in an effort to achieve policy goals.

Current energy policy reflects efforts to achieve both current and past policy objectives. Recent legislative efforts have primarily focused on renewable energy production and conservation to address environmental concerns. In contrast, past efforts attempted to reduce reliance on foreign energy sources through increased domestic production of fossil fuels. Legislation enacted in the 111th Congress focusing on encouraging renewable energy production and conservation reduces reliance on imported, foreign oil, while also addressing environmental concerns by reducing the use of fossil fuels. Favorable tax preferences given to domestic fossil fuel energy sources also promote domestic energy production, reducing the demand for imported oil.


Date of Report: March 28, 2012
Number of Pages: 31
Order Number: R41769
Price: $29.95

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