foreign oil

Post image for Where Does America’s Oil Come From? (An Update)

In 2005, 60% of all petroleum consumed in the U.S. came from imports. The conventional wisdom then and for several years thereafter was that America was fated to become ever-more-dependent on increasingly costly petroleum imports.

Peak oil alarm was in vogue, popularized by books such as Peak Oil Survival: Preparation for Life after Gridcrash (2006), Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy (2006), A Crude Awakening: The Oil Crash – We’re Running Out and Don’t Have a Plan (2007), Hubbert’s Peak: The Impending World Oil Shortage (2008), and Confronting Collapse: Energy and Money in a Post Peak Oil World (2009).

M. King Hubbert, the originator of peak oil theory, correctly predicted in 1956 that U.S. domestic petroleum production would peak between 1965-1970. He also forecast a peak in global production by the late-2000s. In 2008, many commentators interpreted spiking crude oil prices as confirmation of Hubbert’s theory.

But Hubbert, who died in 1989, did not live to see the “shale revolution.” During the past decade, advances in directional drilling and hydraulic fracturing have made it economical to extract oil from the pores of rock. Although U.S. petroleum production is still lower than it was at its peak in 1970, it has increased every year since 2008 with no end in sight.

Citi GPS, a highly respected analytic group, argues that “surging supply growth” from fracked shale formations, deep-water wells, and Canada’s oil sands could “transform North America into the new Middle East by 2020.” Peak oil, if it exists at all, is likely decades away, not around the corner, as the books cited above assumed.

In a previous post, I discussed the Energy Information Administration’s  July 2011 analysis of U.S. dependence on foreign oil. The EIA updated its analysis in May 2013. What has changed?

Basically, there’s more of the same. Already by 2010, more than half of all the oil we consumed came from the U.S. But whereas the balance then was 51% domestic and 49% imports, the balance as of 2012 was 60% domestic and 40% imports (exactly the reverse of the percentages in 2005).

imports_domestic_petro_shares_demand-small 2010


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Post image for Can Obama End Our “Addiction” to Foreign Oil?

In his speech earlier this week, President Obama took a brave and unprecedented stand against our nations reliance on foreign petroleum imports:

Now, here’s a source of concern, though. We’ve known about the dangers of our oil dependence for decades. Richard Nixon talked about freeing ourselves from dependence on foreign oil. And every President since that time has talked about freeing ourselves from dependence on foreign oil. Politicians of every stripe have promised energy independence, but that promise has so far gone unmet.

I talked about reducing America’s dependence on oil when I was running for President, and I’m proud of the historic progress that we’ve made over the last two years towards that goal, and we’ll talk about that a little bit. But I’ve got to be honest. We’ve run into the same political gridlock, the same inertia that has held us back for decades.

That has to change. That has to change. 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.

The United States of America cannot afford to bet our long-term prosperity, our 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. Not when your generation needs us to get this right. It’s time to do what we can to secure our energy future.

Richard Nixon wasn’t the only one. As Jon Stewart pointed out last summer, the last eight administrations have warned against the alleged dangers of importing petroleum and provided a number of solutions to massively restructure the economy, none of which were successful. Stewart comments, “Fool me once, shame on you. Fool me twice, shame on me. Fool me eight times, am I a ****ing idiot?”

And yet we appear to be idiots, and more money will  be spent chasing pipe dreams with taxpayer money. The New York Times, today, congratulated Obama’s willingness to take on such a tough challenge and blamed the lack of progress on, wait for it, Republicans:

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