CREDIT: Associated Press
The United States produced more crude oil than it imported in October for the first time in almost 20 years, the federal Energy Information Administration announced Wednesday. U.S. crude oil production averaged 7.7 million barrels per day in October while 7.6 million barrels per day were imported. Total petroleum net imports were the lowest since February 1991.
The U.S. also produced more oil in September than it has in any one-month period over the last 24 years. The U.S. remains the world’s largest consumer of oil and the largest importer of crude oil.
According to Daniel Yergin, a Pulitzer Prize-winning author and energy expert, the technological breakthroughs, such as hydraulic fracturing, which enabled shale gas and tight oil, have led to a revolution, with U.S. crude oil production up 50 percent since 2008. In an article for Politico Magazine, Yergin says that thanks to that increase along with more efficient automobiles, petroleum imports have fallen from their high 0f 60 percent in 2005 to 35 percent today. This is the same percentage they were in 1973, when President Richard Nixon went on television to promise the American people energy “independence” within 10 years.
Yergin writes that, “the increase in U.S. oil production since just 2008 is greater than the entire output of Nigeria, one of the major OPEC producers, and more than Iran’s entire exports prior to the sanctions that have sliced its export level roughly in half since 2011.”
Yergin states that while we are already arguing over natural gas exports, in the form of liquefied natural gas, the next debate will be on an even more sensitive subject: whether the United States should export crude oil.
Also this week the International Energy Agency released its annual World Energy Outlook, which argues that the oil production boom from hydraulic fracturing will begin trailing off by the mid-2020s.
Loren Steffy, who writes about the crossroads of energy and money for Forbes, writes that the oil industry has a long history of getting ahead of itself.
He says that to finance the domestic drilling boom, U.S. producers have loaded up on debt, currently reaching the highest average in more than a decade. With Saudi Arabia and other Gulf States still the world’s low-cost oil producers, he believes that “financial considerations are likely to have a bigger role in defining the end of the fracking boom than the sheer availability of reserves.”
Maria van der Hoeven, executive director of the International Energy Agency, told the New York Times that they expect the Middle East to come back and be a very important producer and exporter of oil.
“By the mid-2020s, non-OPEC production starts to fall back and countries from the Middle East provide most of the increase in global supply,” van der Hoeven said. “Light tight oil is not low-cost oil.”
The New York Times article notes that “predicting energy trends is notoriously difficult. For example, hardly anybody predicted the revolution in oil and gas production created by fracking in shale.”
Last month the Energy Information Administration released a report saying that domestic energy-related carbon dioxide emissions are at their lowest level since 1994 and over 12 percent below the recent 2007 peak. According to the report, energy-related carbon dioxide emissions declined 3.8 percent in 2012 even though the U.S. economy grew 2.8 percent. It reflects a generally downward trend, in which the carbon dioxide emissions have fallen five out of the last seven years in the U.S.
The main reason for this is that American energy intensity dropped — energy use per dollar of GDP fell 6.5 percent — allowing the economy to do more with less (for example, more fuel efficient cars).
This is positive news, but with global emissions continuing to rise as major developing countries including China and India use more oil and coal to fuel their economic growth, it will take much more to avert the worst impacts of climate change. Until then energy-efficiency in the U.S. will be offset by the exporting of cheap fossil fuels, and not much headway will be made in the effort to reduce greenhouse gas emissions.