"No warning can save people determined to grow suddently rich" - Lord Overstone

  • 5 hours Will Regulatory Rollbacks Make Banks 'Too Big To Fail?'
  • 6 hours Elon Musk’s $2.6 Billion Tesla Challenge
  • 7 hours Tech Giants Could Be First Victims Of U.S. Trade War
  • 8 hours Dow Gains Despite Fed’s Rate Hike
  • 9 hours The Biggest Threat To Chinese Oil Futures
  • 10 hours Spending Bill Could Cause U.S. Debt To Soar To 99% Of GDP
  • 12 hours Precious Metals Slide Ahead Of Fed’s Interest Rate Decision
  • 13 hours China’s Soft Power Grab May Be Bad News For Emerging Economies
  • 1 day The Secretive Wall Street Firm Betting On Bitcoin
  • 1 day ‘Data Is King’: The Oil Industry’s Next Most Valuable Resource
  • 1 day Google Invests $300 Million To Combat Fake News
  • 1 day Zuckerberg Dodges A Bullet As Facebook Loses Billions
  • 1 day Tesla Tumbles As Investors Lose Patience
  • 1 day Are Alt-Coins On The Verge Of A Break Out?
  • 1 day What Should Gold Investors Expect From The New Fed Chair?
  • 2 days Who Will Pay For Trump's $60 Billion China Tariffs?
  • 2 days Vladimir Putin’s Mysterious Fortune
  • 2 days Cryptos Resist Social Media Crackdown
  • 2 days The Death Of Dodd-Frank
  • 2 days Bitcoin Bounces Back Ahead Of G20 Meeting
What Killed Toys ‘R’ Us?

What Killed Toys ‘R’ Us?

In another blow for America’s…

Alibaba Soars On Reports Of China Listing

Alibaba Soars On Reports Of China Listing

Chinese e-commerce giant Alibaba saw…

Snap Shares Tank Over ‘Slap Rihanna’ Campaign

Snap Shares Tank Over ‘Slap Rihanna’ Campaign

Snapchat’s share prices tumbled after…



Information/Articles and Prices on a wide range of commodities: We have assembled a team of experienced writers to provide you with information on Crude Oil,…

More Info

Crushing The U.S. Energy Export Dream

Exporting crude oil and natural gas from the United States are among the dumbest energy ideas of all time.

Exporting gas is dumb.

Exporting oil is dumber.

The U.S. imports almost half of the crude oil that we use. We import 7.5 million barrels per day. The chart below shows the EIA prediction that production will slowly fall and imports will rise (AEO 2014) after 2016.

US production and Net Imports of Oil

This means that the U.S. will never be self-sufficient in oil. Not even close.

What about the tight oil that is produced from shale? That's included in the chart and is the whole reason that U.S. production has been growing. But there's not enough of it to keep production growing for long.

Here is a chart showing the proven tight oil reserves just published last month by the EIA.

US proven Reserves of Tight Oil

Total tight oil reserves are 10 billion barrels (including condensate). The U.S. consumes about 5.5 billion barrels per year, so that's less than 2 years of supply. Almost all of it is from two plays--the Bakken and Eagle Ford shales. We hear a lot of hype from companies and analysts about the Permian basin but its reserves are only 7% of the Bakken and 8% of the Eagle Ford.

Tight oil comprises about one-third of total U.S. crude oil and condensate reserves. The U.S. is only the 11th largest holder of crude oil reserves (33.4 billion barrels) in the world with only 19% of Canada's reserves and 12% of Saudi Arabia's reserves.

Proven Oil Reserves

In other words, the U.S. is a fairly minor player among the family of major oil-producing nations. For all the fanfare about the U.S. surpassing Saudi Arabia in production of crude oil, we are not even players in reserves. What that means is that we may temporarily pass Saudi Arabia in production because it chooses to restrict full capacity, and U.S. production will fade decades before Saudi Arabia's production begins to decline.

Let's put all of this together.

• The U.S. will never be oil self-sufficient and will never import less than about 6 million barrels of oil per day.

• U.S. total production will peak in a few years and imports will increase.

• The U.S. is a relatively minor reserve holder in the world.

How does this picture fit with calls for the U.S. to become an exporter of oil? Very badly. For tight oil producers to become the swing producers of the world? Give me a break.

Perhaps we should send congressional proponents of oil export like Joe Barton (R-TX), Ted Cruz (R-TX) and Lisa Murkowski (R-AK) to "The Shark Tank" TV show to try to sell their great idea to the investors and judges.

I'm out.


Source: http://oilprice.com/Energy/Energy-General/Crushing-The-U.S.-Energy-Export-Dream.html

By Arthur E. Berman for Oilprice.com


Back to homepage

Leave a comment

Leave a comment

Sign Up For The Safehaven Newsletter