Obama sets sights on reducing U.S. oil imports

This intention comes at a time when the global economic recovery has led to increases in the price per barrel of oil and price per gallon of gasoline at roughly $100 and $4, respectively, as was the case in 2008

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In a speech at Georgetown University yesterday, President Barack Obama outlined his plan to reduce the oil imported into the United States by one-third in the next decade.

This intention comes at a time when the global economic recovery has led to increases in the price per barrel of oil and price per gallon of gasoline at roughly $100 and $4, respectively, as was the case in 2008.

These price increases have been very steady since last October and are having an impact on how shippers run their supply chain operations, as LM has reported. Shippers are clearly concerned about the pace of these increases, as they are largely on the hook for them, financially-speaking, with fuel surcharges passed along to them by carriers on top of freight rates. Should prices continue to head north, it could likely limit future growth as well increase the cost of doing business, as it likely it already.

In his speech, Obama said that the U.S. has known about the dangers of oil dependence for decades citing how Richard Nixon talked about freeing the country from dependence on foreign oil during his term as President.

“[E]very President since that time has talked about freeing ourselves from dependence on foreign oil,” said Obama. “Politicians of every stripe have promised energy independence, but that promise has so far gone unmet. We cannot keep going from shock when gas prices go up to trance when they go back down—we go back to doing the same things we’ve been doing until the next time there’s a price spike, and then we’re shocked again.  We can’t rush to propose action when gas prices are high and then hit the snooze button when they fall again.  We can’t keep on doing that.

He also noted how the country cannot afford to bet its long-term prosperity and long-term security on a resource that will eventually run out, and even before it runs out will get more and more expensive to extract from the ground. 

“We can’t afford it when the costs to our economy, our country, and our planet are so high,” he said.

Obama also highlighted how reducing the country’s oil independence depends largely on finding and producing more domestic oil and reducing the country’s overall dependence on oil with cleaner alternative fuels and greater efficiency.

Obama’s proposal was warmly greeted by a supply chain sustainability expert.

“I applaud the President for his speech as he correctly made the statement that without an infrastructure for distributing biofuels and natural gas, the use of alternative fuels won’t increase,” said Brittain Ladd, global supply chain consultant for CapGemini Consulting. “Having such an infrastructure in place is critical for supply chains as carriers and 3PL’s will have to ensure they can maximize the utilization of equipment which can only be accomplished if trucks have fueling locations within the network they operate. No one can say for sure how much of the President’s energy agenda will be enacted, however, what is clear that energy costs will continue to increase. Companies need to increase their efforts to design what I call “low energy intensive supply chains” as doing so will result in a more efficient supply chain and better position the company to adjust to new regulations.”

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About the Author

Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman

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From the January 2018 Logistics Management Magazine Issue
Industry experts agree that costs across all sectors worldwide will continue to rise in 2018, and the most successful shippers will be those that are able to mitigate their impact on profitability. And, the right technology will play an increasingly vital role in driving efficiencies across the global logistics network.
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