US trade deficit in an energy self-sufficient scenario

Yesterday, the International Energy Agency published their World Energy Outlook with this shocker as part of their main forecast:
the United States becomes a net exporter of natural gas by 2020 and is almost self-sufficient in energy, in net terms, by 2035.” (emphasis added)
That outcome has lots of implications. Let me focus on one: what happens to the overall trade balance. Based on last month’s trade in intangibles data, below is what the monthly trade balance would look like if the U.S. had been self sufficient in petroleum goods over the past few years (note: while “energy” and “petroleum goods” are not quite the same thing, they are close enough for this though exercise). Even with energy self-sufficiency, the overall monthly deficit is still $21 billion. So, in other words, energy self-sufficiency doesn’t solve the trade deficit. Nor do intangibles solve the trade deficit. The only way to solve the trade deficit is through a revitalization of goods trade (aka manufacturing).
Total without petroleum-Sept12.gif

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