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FReepathon day 47.
Two percent a day keeps the 404 away.
Posted on 08/17/2014 3:17:37 PM PDT by ckilmer
The USA would not be energy independent producing 14 million bpd. We would still be importing 5 million bpd.
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Yeah I can’t say that I understand that either. 14.5 million barrels a day is usually cited as being the oil independence number and yet the US consumes something like 18 million barrel’s a day.
The only thing I can guess is that 19 million barrels a day include oil that is imported, refined into gasoline, and shipped back overseas again.
So that 14 million barrel’s a day is the NET US production.
The other consideration is how long can energy independence be sustained.
How long could we produce 19 million bpd?
I have seen estimates from roughly 10-20 years.
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That might go to 30-40 years. However, by 2020 there will start some serious demand destruction which will inexorably crush the price oil. Why? Because, natural gas houses, trains trucks and buses plus electric cars are right now growning strongly. If they keep doing so—and that’s a big if — then the inevitable result is that the demand for oil will fall, a little at first but more sharply later.
The final price for oil will be somewhere in the 35 dollar range in current US dollars which on a btu basis is about where coal and natural gas are today.
I think you meant net US consumption?
http://www.eia.gov/tools/faqs/faq.cfm?id=33&t=6
Directly from the US Energy Information Administration.
18.89 million bpd. That includes .32 million barrels of biofuels. So 18.57 million bpd of crude.
BTW US also imports refined oil products.
BTW II I am for all the above. More oil,coal and natural gas consumption are great. An economic production of energy is good as well as economic efficiency gains.
Anything “might” happen.
If demand for oil is crushed in the USA then we could be energy independent for the foreseeable future with oil at $500 2014 USD per barrel for such things as rocket fuel.
I think that understates it. Anything approaching energy independence, at least North American energy independence, would turn this economy around so fast your head would spin.
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Its likely that Obama will leave office in 2016—if he is not impeached before then — with a balanced budget.
Why?
The pubbies have mananged to stop the growth in federal government spending while added revenue from the oil patch and the stock market have raised revenues to the federal government by 200-300 billion annually for the last three years. There’s no sign that that trend is going to end.
Pretty much the same thing happened under clinton. newt kept the federal government spending from growing while the revenues to federal coffers from the stockmarket and the low gas cost economy fueled revenues to the federal budget. Clinton fought Newt tooth and claw to keep the federal budget growing, creamed newt for his efforts and then claimed a balanced budget for his legacy. Something that he had nothing to do with and fought tooth and claw to prevent.
Currently the 1 million barrel @ year increase in US oil production is putting a floor under the economy so that no matter how bad things are doing elsewhere the oil patch and related industries will still create and extra 2% annual growth by itself.
If demand for oil is crushed in the USA then we could be energy independent for the foreseeable future with oil at $500 2014 USD per barrel for such things as rocket fuel.
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Agree. However, unlike the price of natural gas which can vary significantly from region to region because its so hard/expensive to transport—...oil is easily transportable.so international brent prices for oil are within only a couple dollars of US WTI prices.
So there won’t be that great a differential.
As the US crushes demand so will the rest of the world especially europe japan and china.
I just read that the Panama Canal will be able to take longer ships next year. This will enable Louisiana to Japan/China export of nat gas liquids (propane etc.) more cheaply transport wise than middle east. So the middle east being the go-to supplier for Asia era may be over for a while.
Say Eastern Ohio in Utica Shale formation is next big oil
field
14 million barrels per day crude
+2.9 million barrels per day natural gas liquids
+1.0 million barrels per day ethanol
+1.1 million barrels per day refinery gain
=19 million barrels per day
and we wouldn’t have to import anything from Canada and Mexico.
This is great news, but you won’t hear it on the news. The media will spend weeks talking about some thug in Missouri who was shot after robbing a convenience store. The media, and the news-consuming public, thrive on bad news. They could find six trillion or 600 trillion barrels of recoverable oil and you’d wouldn’t hear a word of it.
Say Eastern Ohio in Utica Shale formation is next big oil
field.
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Definitely natural gas. I don’t think its currently considered to be a future big oil play—though oil production is rising sharply. Its coming off a very small base. Same with Marcellus. Its a huge natural gas play. But a small oil play. Though oil production is rising sharply. Again the oil production is coming off a small base.
14 million barrels per day crude
+2.9 million barrels per day natural gas liquids
+1.0 million barrels per day ethanol
+1.1 million barrels per day refinery gain
=19 million barrels per day
and we wouldn’t have to import anything from Canada and Mexico.
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Sheffield doesn’t say when the USA will reach 14 million barrels a day. Only that the only thing that will derail those production numbers is lower oil prices..
The Saudis as swing producers won’t allow prices to fall much below 90@ barrel because their government requires 90@ barrel to pay their bills. The Russians and many other players need even higher prices. The most expensive frackers frack for about $92 @ barrel. But I think those are initial costs. So costs quickly fall. And the best frackers are doing the job in the 60-70 dollar range.
The upshot is that likely nothing in the next five years is going to drive prices down much below $90@ barrel—not even rising US production.
But how fast will production rise? The USA EIA already predicts oil will rise by 1 million barrels@ day in 2014-2015 to about 9.4 million barrels@ day. and then flatten out. However, you can read articles on individual production increase projections for the eagle ford, bakken, permian, the gulf of Mexico and all the rest of American oil formation taken together. Each one of them them are currently projected to be producing another 100,000 barrels@ day from 2016-2019. That would put US oil production at 11.4 million Barrels @ day by the end of 2019.
Here’s the wild card that Sheffield is alluding to. Its the Permian basin. There’s a lot of oil there. Much more than eagle ford and bakken combined. Production volumes there have only begun to accelerate. When they accelerate at the
speed of bakken and eagle ford—volumes in the permian basin will easily go up by 500,000 barrels @ day annually.
If the Permian basin averages 500k increases from 2016-2019 then the USA will be roughly oil independent by the end 2019
Graphs that show Production increases in the permian basin are starting to show a steepening curve this year.
That will be the big story in the coming 12 months.
How fast will Permian production increase.
Stay tuned.
You can bet I will stay tuned.
Assuming we have the goods, how can we be energy independent without nationalizing our energy sector?
Good question. And it’s one that I struggle with. But I do recognize that energy policy is a matter of national security.
Assuming we have the goods, how can we be energy independent without nationalizing our energy sector?
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You’re not getting it. The USA is becoming oil independent despite the best efforts of the Obama administration to prevent that from happening....
Nationalization of the oil industry would kill it.
That’s not currently in the cards.
Oil is sold on the world market. If we are not paying top dollar for it (wherever it is extracted), then it goes elsewhere, not here.
So, our choices are 1} have the most expensive energy or ... 2} nationalize energy resources, keep what we consume here and control the cost internally and be “energy independent”.
I’m not advocating for nationalizing energy. I don’t think we should. But I’m asking how can you be “energy independent” if you do not do this? The only other way to be energy independent is to pay the highest price for the energy.
Oil is sold on the world market. If we are not paying top dollar for it (wherever it is extracted), then it goes elsewhere, not here.
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Currently US law forbids the export of raw oil. (However, refined gasoline is allowed for export.)
That’s what keeps US oil below international prices.
However, starting sometime after 2020—the USA is going to experience serious demand destruction because of the change over from oil fueled houses, trains, trucks and buses to natural gas fueld houses trains trucks and buses. More important will be the change over to electric cars.
These two developments after 2020 will eat into demand for oil and force prices down.
How much below international price does a barrel of US crude oil sell for?
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