Former U.S. ambassadors: Cut foreign oil dependence to help reign in trade deficit

A bipartisan coalition of former U.S. ambassadors urged President Obama Thursday to drastically cut dependence on foreign oil in order to help reign in the country’s trade deficit.

The coalition, known as Diplomatic Council on Energy Security (DCES), warned that the U.S. trade deficit in oil is making up an increasing large portion of the overall U.S. trade deficit.

The trade deficit in oil ballooned to $327 billion in 2011, according to a report issued by the coalition. That’s 58 percent of the total  trade deficit, the highest annual proportion ever. 

That percentage has more than double since 2002, when the oil trade deficit made up 25 percent of the total deficit.

“High and volatile oil prices have pushed the cost of petroleum to levels that would have seemed unimaginable just over a decade ago,” the report says.

“This has contributed to a rapid expansion of the U.S. trade deficit, rendering the nation increasingly dependent on foreign capital inflows and building up an enormous financial liability to foreign entities.”

DCES, a project of energy security group Securing America’s Future Energy, is co-chaired by Alfred Hoffman, ambassador to Portugal under President George W. Bush, and Elizabeth Frawley Bagley, ambassador to Portugal under President Bill Clinton. The coalition includes among its membership former ambassadors to France, Sweden, Mexico, Austria and many other countries.

The ambassadors noted that there is “no simple, single solution to address U.S. oil dependence,” but outlined a number of policy recommendations focused on increasing domestic oil production while also cutting domestic oil consumption.

The report notes that increased domestic oil production won’t shield the country form price swings, but “would offset U.S. imports and therefore have a positive impact on the U.S. trade balance in petroleum products.”

DCES calls for an overhaul of the transportation sector, which is largely dependent on oil-based fuels.

“The transportation sector remains the primary focal
point of demand-reduction efforts,” the report says. “Fundamentally, policies to combat oil dependence in this sector come in three categories; vehicle efficiency, alternative fuels, and infrastructure.”

Presidents have called for weaning the country off its dependence on foreign oil for decades, but, as the report notes, the U.S. still imported 50 percent of its oil in 2011.

President Obama has made energy security a focal point of his energy policy platform.

When gasoline prices surged this Spring, Obama toured the country touted his “all-of-the-above” energy plan, which focuses on expanded domestic production, less dependence on foreign oil and improved vehicle fuel efficiency, among other things. The White House has also touted the fact that 2011 was the first year that the U.S. was a net exported of oil since 1949.

But Republicans have taken aim at Obama’s energy plan, alleging that he isn’t doing enough to expand domestic production.

The president has touted federal data that show oil production at its highest level since 2003, an effort to counter GOP claims that the Obama administration is standing in the way of expanded drilling.

Total production from U.S. lands and waters, which the federal government controls, has increased during Obama’s time in office. But offshore production dipped in 2011, according to Energy Information Administration data.

Oil and gasoline prices have decreased in recent weeks.

Gasoline prices surged to a national average of nearly $3.94 per gallon in early April, after months of steady increases. But prices dropped to a national average of about $3.72 Thursday, according to AAA. Oil prices fell to a six-month low this week.