Myth Number 1: The U.S. is approaching energy independence.
There is no doubt we are in the midst of a shale oil revolution. But the growth of production has led to reporting that might charitably be described as overly optimistic. In fact, the Wall Street Journal reported today, in an article entitled Democrats Warming to the Energy Industry, “Since March 2008, oil production has increased 58% and natural-gas output has risen 21%, making the U.S. the world’s largest producer of both fuels, according to federal and international agency statistics.”
I don’t know which federal statistics that reporter was looking at. I went to the U.S. Energy Information Agency website, and found, that as I suspected, Saudia Arabia is the world’s top oil producer. The U.S. is number two. The U.S. is the number one producer of natural gas. And the Wall Street Journal (WSJ) is right in that there has been a dramatic increase in production. The Energy Information Agency (EIA) is showing growth of about 21% in billions of cubic feet of natural gas produced between 2008 and 2013, and 43% growth in oil as measured by thousands of barrels produced per day, a growth rate somewhat lower than the WSJ is reporting.
But what the WSJ, and many others reporting on this topic are missing, is just how far away from energy independence the U.S. really is. OilVoice published an article where the author, Gail Tverberg, takes EAI data for oil and natural gas production, converts barrels of oil and billions of cubic feet of natural gas into quadrillions of BTUs per year produced and consumed by the U.S (through 2013).
“This approach makes it easy to see how much of our fuel is US produced, and how much is imported.” Gail’s analysis? “Production is indeed rising, but it is still far below consumption – about 55% of consumption in 2013.” The growth in production has contributed to a drop in oil imports, but “if we look at the chart, we see that a big reason for the drop in imports is a drop in consumption, with the big step down coming in 2007 and 2008.”
Myth Number 2: Our lack of pipelines has led to Rail becoming the most important mode for moving oil.
When it comes to crude transport, there is much more coverage of rail than pipeline. This can leave the impression that rail is the most important mode for moving petroleum products. In a different EIA article, it was reported that while there is a greater reliance on rail and waterborne transport “pipelines remain the primary mode of transporting crude oil and petroleum products in the United States, typically accounting for more than 90% of total movements nationwide.” There were 121,000 miles of U.S. pipeline in 2012.” Truck and rail are growing in importance, “refinery crude receipts from these modes averaged just 1 percent of total receipts from 2000 to 2010,” but they are growing from an incredibly small base.
I encourage you to go to both the EAI articles and Gail’s article. There is nothing like a good graph to correct a flawed understanding of our world
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02 October 2017