Photo credit: Flickr/U.S. Army

It was the autumn of 1973 and America was held hostage. OPEC decided to assert its authority by halting all shipments of oil to the U.S. Gas stations soon ran out of gas. Prices jumped, and the economy was held hostage to foreign powers. The nation vowed to never let that happen again.


Unfortunately, our thirst for foreign oil only got worse. From 1973 oil imports more than doubled from 6 million barrels per day to 12.5 million by 2005. Worse yet, our dependence on foreign oil also skyrocketed from 30% in 1973 to 60% in 2005. While the nation did make some changes, these were not enough to get us off foreign oil. This is evidenced by the fact the we fought a number of wars where oil was at the heart of the conflict.

The shift no one saw coming
Remarkably over the last few years we've seen a dramatic shift. Today only about 40% of our oil is imported, which is the lowest level since 1991. Further, more than a third of our imported oil comes from our friendly neighbor to the north. The combination of the industry's ability to unlock the oil sands, as well as our own shale boom has made America a much more secure nation when it comes to our energy security.

In fact, a new report shows that the U.S. ranks fifth in terms of oil security among the 13 countries analyzed. Declining oil intensity, import levels and consumption all worked together to improve American energy security. One example of an area of vast improvement is in reducing the use of oil for power generation. In the mid-1970s approximately 17% of our power was generated by oil. That's fallen to less than 1%. Interestingly, oil used in power generation plays a major factor in places like Saudi Arabia, which is one reason why that nation was ranked dead last on the list. However, the real shift came from rising production. 

Unlocking our resources
One could say that the biggest reason the U.S. has moved from the seventh most secure nation in 2000 to fifth today is increasing oil production. Companies like Continental Resources and Kodiak Oil & Gas have led the charge in the Bakken to fuel surging oil production growth. Continental Resources CEO Harold Hamm believes the play is still early in its development. In fact, he sees more than 45 billion barrels of oil and gas eventually being produced from the play. Further, Hamm sees oil production from the play ultimately hitting more than 2 million barrels of oil per day, or more than double its current rate.

At the same time smaller producers like Kodiak Oil & Gas have used the Bakken to fuel amazing growth. The oil company has grown its production and reserves by a triple-digit compound annual rate since 2009. That has enabled Kodiak Oil & Gas to grow to the point where it can handle a billion dollar annual drilling budget. This is a company that as of 2009 had reserves of just 4.5 million barrels of oil equivalent, or BOE, and was producing an average of a mere 1,260 BOE per day in 2010.

Oil, however, is just part of the story that has helped make our nation's energy more secure. The natural gas boom that started it all is still alive and well even if the growth has slowed due to low prices. Chesapeake Energy has experienced both the boom and the bust from natural gas. However, as the nation's number two natural gas producer, Chesapeake Energy is still growing production thanks to its focus on natural gas liquids. While Chesapeake Energy's base natural gas production, as well as its shale natural gas production, has been declining, the company is growing the natural gas production that is associated with liquids plays. Further, once natural gas prices do move higher, the company has a huge inventory that it can drill to grow production.

Final thoughts
We never expected to see the flood of oil and gas production that has come thanks to horizontal drilling and hydraulic fracturing. It's the part of our energy security that we don't have as much control over as we do in other areas.

One area we can vastly improve upon is the transportation sector. Right now about 93% of our transportation fuel is oil-based instead of from natural-gas, electric, or ethanol. With our abundant natural gas supplies and increasing availability of electric vehicles, there is the potential for that to drop over the long-term. America's energy boom, especially the currently subdued natural gas sector could really fuel new growth in transportation in the years ahead and further improve our national security.

Invest in America's energy security

Using natural gas as a transportation fuel could get our nation off foreign oil for good. It's a future that many see as inevitable. That's because this little-known company holds the key to the explosive profit power of the coming "no choice fuel revolution." Luckily, there's still time for you to get on board if you act quickly. All the details are inside an exclusive report from The Motley Fool. Click here for the full story!

The article Why Has Our National Security Improved? originally appeared on Fool.com.

Fool contributor Matt DiLallo has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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