Energy independence and oil & gas prices
Historically, lower oil and gasoline prices have been associated with increased consumption and increased imports, leading to a reduction in energy independence, while higher oil and gasoline prices tend to reduce consumption and the need for imports, leading to an increase in energy independence.
n In the early 2000s, gasoline prices increased considerably compared with the previous 20 years, but energy independence continued to decline, showing a different pattern as measured by the W&J College Energy Index. More recently, energy independence has increased noticeably as consumers have responded to high prices and domestic production has grown.
n The increase in gasoline prices is due in part to increased demand from the developing world, particularly China. This new pattern of more efficient consumption and greater domestic production is likely to continue as growing demand for oil outside the U.S. keeps prices high.