"overseas oil, even after shipping costs, is often cheaper than domestically-produced crude"
This is all you need to know.
If we had an oil export tariff, then we would very quickly become oil independent. Buyers in other countries are in competition with Americans for this oil, so if you really want to keep the price low in America, we should have such a tariff. Why should we give away our natural resources like this?
Additionally: in these emergency times, a reasonable argument could be made for price controls.
Energy independence does not mean “only uses domestically produced energy.” It means “energy is not a significant lever that other nations have over us.”
And that is true for the U.S. today. We could meet our domestic fossil fuel energy needs, but we find economic advantage in trading energy anyway. But when we want to use energy as a tool of policy, we have the option.
This happens in personal finance too. I can pay off my mortgage: I have enough capital to do so. So I don’t fear the bank. But with mortgage interest rates so low, I’ve found comparative advantage by keeping my mortgage and investing my capital elsewhere.
"overseas oil, even after shipping costs, is often cheaper than domestically-produced crude"
If that were really true, the US would not be able to export oil, which it does.
There may still be a tax break for some imported oil. Saudi oil was taxed by Saudi Arabia, and this was tax-deductible for US buyers, even though ARAMCO is owned by the Saudi government and that "tax" is the government taxing itself. Not sure if this still applies.
Some export is geography. Alaska has good access to Japan. There isn't enough pipeline capacity through the Sierras. Stuff like that.
Not sure about the refinery argument. Here's a study made during the last oil glut, so the technology is the same but the economics are different.[1] (Start at page 7.) Refineries can crack heavy crude down to lighter fractions, but they don't have to. Turns out that's not the problem. The problem is getting out too many light fractions - propane, methane, butane - for which markets are limited. Some distillation columns can't handle too much of the light fractions. It's possible to add a reformer stage to combine light hydrocarbons down to at least the gasoline level, but most refineries don't have those. All those problems are solveable on a scale of five years.
Price controls are almost always a terrible idea. Economists agree on this as much as dentists agree that sugared gum is bad for your teeth. If the price of a good increases, several things happen:
- People reduce their consumption of that good.
- People find substitutes.
- People with stockpiles of the good sell it. If price controls were in effect, they would hoard it instead.
- On a longer time scale, people start producing more of the good. They pay workers overtime to work more shifts, buy/build more equipment, and so on.
Economist Michael Munger wrote an article titled They Clapped: Can Price-Gouging Laws Prohibit Scarcity? which explains the problems with price controls, even in times of disaster.[1]
> If we had an oil export tariff, then we would very quickly become oil independent.
We had an oil export ban until 2015. Lifting it is at least part of the reason oil production has increased as much as it has over the past 6 years. If you look at production graphs, oil production was already on a sharp upswing between 2010 and 2015. But it kept going between 2015 and today, even though domestic oil consumption declined over that period.
If you consider grades of oil and geographic locations (i.e. for what and whom various production areas are best suited), it might even be possible that the only reason we could be hypothetically import independent without substantially increased prices based on today's undifferentiated extraction volume is because of the export market. Without the grade and geography arbitrage provided by trade, current production might not be viable without substantially increased prices. (Though, if global prices become extreme and remain so, then at least we could limit the price increases. OTOH, it's probably just easier--and certainly quicker--to make nice with Venezuela rather than restructure our extraction and refining infrastructure.)
Exactly this. The US could make iPhones too, but we import them. Unfortunately we don't have a "strategic iPhone manufacturing reserve", so we have to keep it cool with China.
> If we had an oil export tariff, then we would very quickly become oil independent.
We typically export refined oil products (think gasoline from WA to BC) that have lots of value add (refined gasoline rather than just oil). A lot of it goes to our allies (Japan), or even China. Cleaner American crude might go to other countries who mix it in with dirtier local crude to create something that is refineable. The trade has a net benefit if you don't treat oil as some homogenous resource. This isn't even to mention geography conveniences: we export to Canada, Canada exports to us because the USA is a big country (and lots of Canadian shale goes to Texas to be refined).
IF we had an oil export tariff, the industry would get messed up quickly. It would survive, we would just have to shoulder higher costs for less efficient usage of resources.
Price controls shift the pain point from the price to availability. USSR had planned economy and fixed prices for most merchandise, but you had to call in favors to "procure" many wanted items from buddies working near the supply lines, since officially they were practically always out of stock.
That only makes sense if you're looking at a snapshot in time and try to make sense of it. It's too simplistic to explain this situation if it persists over time. Which, well, it's too early to tell. US domestic oil production ha so only matched import volume for the first time ever in 2020[1]. I expect that if the US keeps production high, eventually the cost of domestic production will reach an equilibrium and the benefit of locality and less transport costs will force the US to use its own oil.
It's not this simple. Petrodollar is contingent on supplying dinosaur-juice to the world's wealthiest country.
An isolationist America that resorts to price-controls or money-printing in order to keep its oil producers afloat risks run-away inflation. Not only due to the issue of EROEI, but also due to threats to its primacy in the global order.
Of course many of think its unfair that the world pays for the US warmongering and general debauchery, but I imagine there are enough people in the State-dept. and the Fed to understand this even if they pretend this whole thing is a "conspiracy theory" to be punished with blasphemy.
Well, there's that and the fact that historically oil is an (economic) weapon. Some ecomonies are more susceptible to price changes than others. Some can use that weapon proactively, others can so nothing but reactively suffer the consequences.
For example, when the USA allowed fracking production to hockey stick (started under Bush #2 and took off under Obama), the international price dropped significantly. That hurt countries such as Venezuela and Russia.
Oil is like a drug. Once you're hooked you're no longer free.
Why? Geopolitics. You can't influence others without leverage and you can't tariff oil and expect others not to tariff other things you need. You tariff crude export but maybe you need to export gasoline/benzene and they tariff you back. There is also the consideration of reserves, when consuming more you want to consume others' more so your finite crude supply won't run out before theirs (decades from now). Either way, death to fossil fuels!!
Price controls are economically destructive. They cause shortages. Were you alive in the 1970's? Lines going for several blocks? Even and odd days? Price controls are a bad idea.
Tariffs here would lead to other countries putting tariffs on trade we do care about. Trade wars have been shown to cost countries, not help them. We'd be no exception.
That's a really nice summary of imperialism in the capitalist era. It really shows the need business has in economically dominating other countries in search of profit through the low production costs in other countries. The cost of production and of living (think poverty) is essential in the formula for generating capital.
The reality of this article points out the contradictions inherent in capitalist economies.
If there was a tariff how would that impact the rest of the economy. If anything it would only solidify the position of the already big enterprises who are the only ones able to withstand such a hike.
"overseas oil, even after shipping costs, is often cheaper than domestically-produced crude + domestic shipping cost" (emphasis mine).
One reason that domestic shipping cost is so high is that 1920 Jones Act[0] prohibits shipping between US ports with non-US ships. This drastically reduces competition and increases prices. Hawaii are particularly hit by this, with estimate $1800 per year per family in extra cost [1].
"Oil" isn't one product. It differs widely in chemical and physical properties (viscosity, how much sulfur and arsenic is present, etc.) depending on how/where it was produced. Different refineries are setup to refine different grades of oil and the oil is often blended before shipment to meet the specs the refineries expect. It is often cheaper for the US to import the right grade of oil than it would be to reconfigure the domestic refineries to process all the domestically produced oil.
This is also why there are several oil "prices" that you will see quoted, the most common two being WTI and Brent.
So if I understand correctly, US refineries are built to process imported oil, rather than the domestic oil drilled out of US land. Which means that if the US stops importing, it will not have a way to meet domestic consumption demand without building new refineries, or making (presumably) substantial modifications to existing processing infrastructure. What’s the lead time and cost to build that out?
Tangential to oil, the US government tracks the availability of "strategic resources" ("critical minerals") via the USGS [1]
For example, the US produces no rare earths, mostly because the process of extracting those is enfironmentally-unfriendly and we've closed all our mines that produced them, preferring to outsource production to places that don't care about the environmental impact, like China.
From what I remember from the USGS talk many years ago, a lot of the critical minerals required for our modern technology comes from unstable regimes. The US could produce mine many of those locally, but of course it'd take many years to ramp up production (not even mentioning the local environmental impact)
Seems disingenuous to not mention that most of that US oil (65%!) comes from environmentally destructive practices, which is a damn good reason to prefer imports.
Or, put simply: how much US oil comes from fracking? Not a small number - the aforementioned 65%. Source for this data: the U.S. government.
Remember, these aren't small amounts of water either. I live in California, where we have drought conditions. How much water do you think a typical well uses? "Up to 9.6 million gallons of water (!!!!) per well." For just one well!
Oil and natural gas fracking, on average, uses more than 28 times the water it did 15 years ago, gulping up to 9.6 million gallons of water per well and putting farming and drinking sources at risk in arid states, especially during drought.
So, here's the thing. The "cost" of that water in the market is just the cost in dollars. But to Americans, and future generations? It's much higher. You can throw a stone at a US map and hit a state that's experiencing drought conditions right now (and that well water is permanently off limits for drinking).
If we can slash the real cost - the externality cost - by just buying it from elsewhere, we should. And we do. And that's the right choice, despite what NASDAQ thinks.
>comes from environmentally destructive practices, which is a damn good reason to prefer imports.
I'm sure Russia, Venezuela, Iran, Saudi, etc. really care about the environment and their reports about environment sustainability* are totally true.
The average oil producer is a dictatorship, and I suspect the impact of lack of transparency is more important than the drilling method - they have every motivation to cut corners, while American oil is openly regulated. So from the global perspective I doubt American production is more polluting.
> Seems disingenuous to not mention that most of that US oil (65%!) comes from environmentally destructive practices, which is a damn good reason to prefer imports.
This reads like the NIMBY stance of oil production. “Make whatever mess you want, keep it where it is! Can’t have that happening in my state/country!”
So you’d rather export pollution instead of being energy independent and trying to fix fracking laws?
This just hints at how toxic the fracking chemicals used are. It's not just the water, it's the pollution that is compounding this issue. Water always has, and always will recirculate - but pumping dangerous contaminants into our water tables is a big problem that effects current generations as well.
I will summarize those paragraphs - as long as USA can afford to export manufacturing pollution to poor countries that allow excess pollution, we should continue to have the pollution dumped over there.
I don't agree with that. I support pollution import duties to remove some of the economic advantage of dumping pollution over there.
The US is a leader in oil refinement technology, such that there are oil rich Latin American countries (Venezuela and Mexico) that rely on exporting crude and importing refined products from the US to meet THEIR energy needs.
This isn't about the US going full 'no import oil', it's about finding the entire west non-Russian sources of crude.
Oil isn't a uniform thing - it's closer to marble than limestone. People import tuscan marble all the time due to the grain and qualities of the piece itself - it's quite the same with oil - not every barrel was created the same and America has some processing facilities specialized to consume a quality of oil not found domestically in large volume.
The answer is simple: America is not a monolith, and it is a free country. It's not a single entity that imports x, exports y, and figures out that it can net out inflows and outflows and just export y-x in the end. It's hundreds of companies, each trying to optimize their own business operations, and ultimately profits. If there are no restrictions from purchasing oil from Russia, or Venezuela, or Libya or whatever, and they find it advantageous to do that, they'll do that. The day the US puts some sanctions, they'll have to scramble and find an alternative. That's the way it is, and it can't be any other way.
Can somebody double check some numbers here for me? Because something seems Twilight Zone levels of weird. This article states we use 18.12 million barrels per day, and produce 18.4 million per day. Of course some of that gets sent over to the strategic petrol reserves, but for the most part that is all being used or exported. That's 6.72 billion barrels per year. We have proven reserves (as of the end of 2020) of 38.2 billion barrels. [1]
That gives us less than 6 years before we completely run through reserves. But it feels like this can't be true because it would have a huge impact on domestic producers, domestic oil prices (especially given the US' relationship with most oil producing nations), and much more. But this article didn't even bother mentioning this fact.
Of course at some point there must be a limit, but thus far when there's been sufficient incentive to look, more reserves have been found (including via new technology such as fracking).
"Most of the oil produced in the U.S. fields in Texas, Oklahoma, and elsewhere is light and sweet, compared to what comes from the Middle East and Russia. The problem is that for many years, imported oil met most of the U.S.’s energy needs, so a large percentage of the refining capacity here is geared towards dealing with oil that is heavier and less sweet than the kind produced here."
Canada, Alberta specifically, produces precisely this kind of oil. In his speech announcing the ban, Biden listed several alternatives to Russian oil that the U.S. would rely on, including Saudi Arabia, but pointedly left Canada out. This is after one of his first acts as President was to scrap a (heavily politicized) pipeline that would have transported heavy Alberta oil to U.S. refinery centres.
It's worth asking what is going on here. Why does the U.S. seem to prefer relying on oil from regimes that are as morally questionable as Russia while snubbing a long-time stable supplier that is right next door?
Politically, Biden is committed to green energy and, of course, is not going to want to reverse his decision on a pipeline that Trump backed. However, reality is a thing. The U.S. needs heavy oil and isn't getting it as efficiently or environmentally friendly as it could because, as in Canada, infrastructure approval processes have become heavily politicized. Oil will indeed flow from Alberta to U.S. refineries, but mainly via tanker cars. This increases transportation costs and, hence, fuel costs. It also makes spills and accidents, such as occurred in Lac-Mégantic, more likely.
It may be time to look at ways to free long-term infrastructure planning and approval processes from the short-term needs of politicians looking for a quick boost in the polls before an election.
Why is nobody mentioning peak oil [0]? Seems to me that is the reason the extraction costs in the US is so high. Because the oil reserves are drying up, and it becomes harder and harder to squeeze out the oil. They are starting to employig techniques like fracking [1] to squeeze the oil out, but that costs a lot more energy, so the produce is lower, so the oil is more expensive. And will keep becoming more expensive as the reserves dry up and the extraction becomes more and more expensive.
A good resource on how this works is The Crash Course [2] from Peak Prosperity, where it discusses this in relationship with the financial and environmental factors.
Not mentioned in the article, the US is actually a few different oil markets.
For example, the east coast has refineries, but they are geared for oil from the middle east. Why?
One reason is the Jones Act, which prohibits shipping between US ports except by US crewed/flagged vessels. There basically aren't any of those.
So, we ship liquified natural gas from Texas to Europe and Asia, but are not allowed to ship to the east coast or other US ports.
The other reason is that pipeline capacity to the east coast is severely constrained. Many planned pipelines have been cancelled. It takes decades with all the NIMBY laws to build one, but only one president to throw all that work out with a decree.
Pipeline capacity is further constrained due to regulations for boutique fuels. The gas you can use can vary from state to state. If you start a run of said fuel on the pipeline, you can't serve the whole intended market for when the pipeline was designed.
And then there is the whole ethanol thing. It has to get shipped at great expense from the midwest to the coasts where regulations say it must be used.
oil is too good a resource that any major economy could just move away from it without wrecking their competitiveness, certainly in 2022 still and for the foreseeable future
This (the various types of crude) is not the real reason, based on what I read before. The US is a major (biggest?) exporter of refined oil products. I think even western Europe gets a significant portion of refined product from the US. There is simply a lot of capacity, built in the 2010s. So the imports of crude are used for refining.
We only produce enough oil to meet our needs via fracked shale wells, enhanced recovery methods, etc, all of which comes at great cost, both financial and environmental.
I wouldn't expect an economist or an American Jingoist cheerleader to ever crack a geophysics book, but someone should look at the production decline curves of these wells and then take a wild-ass guess how much longer the shale miracle will last.
We import oil because "energy independence" (at least from an oil & gas perspective, renewables and coal may be another matter) is a fleeting, rose-colored dream, from which we will soon awake.
[+] [-] jhallenworld|4 years ago|reply
This is all you need to know.
If we had an oil export tariff, then we would very quickly become oil independent. Buyers in other countries are in competition with Americans for this oil, so if you really want to keep the price low in America, we should have such a tariff. Why should we give away our natural resources like this?
Additionally: in these emergency times, a reasonable argument could be made for price controls.
[+] [-] snowwrestler|4 years ago|reply
And that is true for the U.S. today. We could meet our domestic fossil fuel energy needs, but we find economic advantage in trading energy anyway. But when we want to use energy as a tool of policy, we have the option.
This happens in personal finance too. I can pay off my mortgage: I have enough capital to do so. So I don’t fear the bank. But with mortgage interest rates so low, I’ve found comparative advantage by keeping my mortgage and investing my capital elsewhere.
[+] [-] Animats|4 years ago|reply
If that were really true, the US would not be able to export oil, which it does.
There may still be a tax break for some imported oil. Saudi oil was taxed by Saudi Arabia, and this was tax-deductible for US buyers, even though ARAMCO is owned by the Saudi government and that "tax" is the government taxing itself. Not sure if this still applies.
Some export is geography. Alaska has good access to Japan. There isn't enough pipeline capacity through the Sierras. Stuff like that.
Not sure about the refinery argument. Here's a study made during the last oil glut, so the technology is the same but the economics are different.[1] (Start at page 7.) Refineries can crack heavy crude down to lighter fractions, but they don't have to. Turns out that's not the problem. The problem is getting out too many light fractions - propane, methane, butane - for which markets are limited. Some distillation columns can't handle too much of the light fractions. It's possible to add a reformer stage to combine light hydrocarbons down to at least the gasoline level, but most refineries don't have those. All those problems are solveable on a scale of five years.
[1] https://www.eia.gov/analysis/studies/petroleum/morelto/pdf/l...
[+] [-] ggreer|4 years ago|reply
- People reduce their consumption of that good.
- People find substitutes.
- People with stockpiles of the good sell it. If price controls were in effect, they would hoard it instead.
- On a longer time scale, people start producing more of the good. They pay workers overtime to work more shifts, buy/build more equipment, and so on.
Economist Michael Munger wrote an article titled They Clapped: Can Price-Gouging Laws Prohibit Scarcity? which explains the problems with price controls, even in times of disaster.[1]
1. https://www.econlib.org/library/Columns/y2007/Mungergouging....
[+] [-] landemva|4 years ago|reply
>>>This is all you need to know.
And the Jones Act which makes it cost-prohibitive to ship between US ports. https://www.law.cornell.edu/wex/jones_act
[+] [-] wahern|4 years ago|reply
We had an oil export ban until 2015. Lifting it is at least part of the reason oil production has increased as much as it has over the past 6 years. If you look at production graphs, oil production was already on a sharp upswing between 2010 and 2015. But it kept going between 2015 and today, even though domestic oil consumption declined over that period.
If you consider grades of oil and geographic locations (i.e. for what and whom various production areas are best suited), it might even be possible that the only reason we could be hypothetically import independent without substantially increased prices based on today's undifferentiated extraction volume is because of the export market. Without the grade and geography arbitrage provided by trade, current production might not be viable without substantially increased prices. (Though, if global prices become extreme and remain so, then at least we could limit the price increases. OTOH, it's probably just easier--and certainly quicker--to make nice with Venezuela rather than restructure our extraction and refining infrastructure.)
[+] [-] nipponese|4 years ago|reply
[+] [-] SiempreViernes|4 years ago|reply
[+] [-] seanmcdirmid|4 years ago|reply
We typically export refined oil products (think gasoline from WA to BC) that have lots of value add (refined gasoline rather than just oil). A lot of it goes to our allies (Japan), or even China. Cleaner American crude might go to other countries who mix it in with dirtier local crude to create something that is refineable. The trade has a net benefit if you don't treat oil as some homogenous resource. This isn't even to mention geography conveniences: we export to Canada, Canada exports to us because the USA is a big country (and lots of Canadian shale goes to Texas to be refined).
IF we had an oil export tariff, the industry would get messed up quickly. It would survive, we would just have to shoulder higher costs for less efficient usage of resources.
[+] [-] john_moscow|4 years ago|reply
[+] [-] phendrenad2|4 years ago|reply
[1] - https://upload.wikimedia.org/wikipedia/commons/6/6d/US_oil_p...
[+] [-] thwerou2343|4 years ago|reply
An isolationist America that resorts to price-controls or money-printing in order to keep its oil producers afloat risks run-away inflation. Not only due to the issue of EROEI, but also due to threats to its primacy in the global order.
Of course many of think its unfair that the world pays for the US warmongering and general debauchery, but I imagine there are enough people in the State-dept. and the Fed to understand this even if they pretend this whole thing is a "conspiracy theory" to be punished with blasphemy.
[+] [-] cryptonector|4 years ago|reply
[+] [-] topspin|4 years ago|reply
Constitution of the United States Article I, Section 9, Clause 5:
see: https://constitution.congress.gov/browse/essay/artI_S9_C5_1/[+] [-] mfer|4 years ago|reply
For example, the different types of oil and the way US refineries are setup. That's useful context to know more about the situation.
[+] [-] chiefalchemist|4 years ago|reply
For example, when the USA allowed fracking production to hockey stick (started under Bush #2 and took off under Obama), the international price dropped significantly. That hurt countries such as Venezuela and Russia.
Oil is like a drug. Once you're hooked you're no longer free.
[+] [-] badrabbit|4 years ago|reply
[+] [-] rhuru|4 years ago|reply
[+] [-] mariodiana|4 years ago|reply
[+] [-] ChrisLomont|4 years ago|reply
[+] [-] Entalpi|4 years ago|reply
[+] [-] mrleinad|4 years ago|reply
[+] [-] knownjorbist|4 years ago|reply
[+] [-] Atlas667|4 years ago|reply
The reality of this article points out the contradictions inherent in capitalist economies.
If there was a tariff how would that impact the rest of the economy. If anything it would only solidify the position of the already big enterprises who are the only ones able to withstand such a hike.
[+] [-] WheatM|4 years ago|reply
[deleted]
[+] [-] kilotaras|4 years ago|reply
One reason that domestic shipping cost is so high is that 1920 Jones Act[0] prohibits shipping between US ports with non-US ships. This drastically reduces competition and increases prices. Hawaii are particularly hit by this, with estimate $1800 per year per family in extra cost [1].
[0] https://en.wikipedia.org/wiki/Jones_Act_(sailor_rights) [1] https://www.wsj.com/articles/jonesing-to-give-up-russian-oil...
[+] [-] jeffreyrogers|4 years ago|reply
This is also why there are several oil "prices" that you will see quoted, the most common two being WTI and Brent.
[+] [-] matt123456789|4 years ago|reply
[+] [-] AceJohnny2|4 years ago|reply
For example, the US produces no rare earths, mostly because the process of extracting those is enfironmentally-unfriendly and we've closed all our mines that produced them, preferring to outsource production to places that don't care about the environmental impact, like China.
From what I remember from the USGS talk many years ago, a lot of the critical minerals required for our modern technology comes from unstable regimes. The US could produce mine many of those locally, but of course it'd take many years to ramp up production (not even mentioning the local environmental impact)
[1] https://www.usgs.gov/programs/mineral-resources-program/scie...
[+] [-] julianeon|4 years ago|reply
Or, put simply: how much US oil comes from fracking? Not a small number - the aforementioned 65%. Source for this data: the U.S. government.
https://www.eia.gov/tools/faqs/faq.php?id=847&t=6
Remember, these aren't small amounts of water either. I live in California, where we have drought conditions. How much water do you think a typical well uses? "Up to 9.6 million gallons of water (!!!!) per well." For just one well!
https://www.scientificamerican.com/article/analysis-fracking...
That whole sentence is worth quoting in full:
Oil and natural gas fracking, on average, uses more than 28 times the water it did 15 years ago, gulping up to 9.6 million gallons of water per well and putting farming and drinking sources at risk in arid states, especially during drought.
So, here's the thing. The "cost" of that water in the market is just the cost in dollars. But to Americans, and future generations? It's much higher. You can throw a stone at a US map and hit a state that's experiencing drought conditions right now (and that well water is permanently off limits for drinking).
If we can slash the real cost - the externality cost - by just buying it from elsewhere, we should. And we do. And that's the right choice, despite what NASDAQ thinks.
[+] [-] yyyk|4 years ago|reply
I'm sure Russia, Venezuela, Iran, Saudi, etc. really care about the environment and their reports about environment sustainability* are totally true.
The average oil producer is a dictatorship, and I suspect the impact of lack of transparency is more important than the drilling method - they have every motivation to cut corners, while American oil is openly regulated. So from the global perspective I doubt American production is more polluting.
* If they even have any.
[+] [-] dgfitz|4 years ago|reply
This reads like the NIMBY stance of oil production. “Make whatever mess you want, keep it where it is! Can’t have that happening in my state/country!”
So you’d rather export pollution instead of being energy independent and trying to fix fracking laws?
[+] [-] new_stranger|4 years ago|reply
[+] [-] landemva|4 years ago|reply
I don't agree with that. I support pollution import duties to remove some of the economic advantage of dumping pollution over there.
[+] [-] thedudeabides5|4 years ago|reply
The US is a leader in oil refinement technology, such that there are oil rich Latin American countries (Venezuela and Mexico) that rely on exporting crude and importing refined products from the US to meet THEIR energy needs.
This isn't about the US going full 'no import oil', it's about finding the entire west non-Russian sources of crude.
[+] [-] munk-a|4 years ago|reply
[+] [-] credit_guy|4 years ago|reply
[+] [-] mikewarot|4 years ago|reply
[+] [-] somenameforme|4 years ago|reply
That gives us less than 6 years before we completely run through reserves. But it feels like this can't be true because it would have a huge impact on domestic producers, domestic oil prices (especially given the US' relationship with most oil producing nations), and much more. But this article didn't even bother mentioning this fact.
So.... what am I missing?
[1] - https://www.eia.gov/naturalgas/crudeoilreserves/
[+] [-] tempestn|4 years ago|reply
Of course at some point there must be a limit, but thus far when there's been sufficient incentive to look, more reserves have been found (including via new technology such as fracking).
[+] [-] soperj|4 years ago|reply
[+] [-] chernevik|4 years ago|reply
What? The politicians that matter _are_ incumbents.
Not a great article.
[+] [-] beloch|4 years ago|reply
Canada, Alberta specifically, produces precisely this kind of oil. In his speech announcing the ban, Biden listed several alternatives to Russian oil that the U.S. would rely on, including Saudi Arabia, but pointedly left Canada out. This is after one of his first acts as President was to scrap a (heavily politicized) pipeline that would have transported heavy Alberta oil to U.S. refinery centres.
It's worth asking what is going on here. Why does the U.S. seem to prefer relying on oil from regimes that are as morally questionable as Russia while snubbing a long-time stable supplier that is right next door?
Politically, Biden is committed to green energy and, of course, is not going to want to reverse his decision on a pipeline that Trump backed. However, reality is a thing. The U.S. needs heavy oil and isn't getting it as efficiently or environmentally friendly as it could because, as in Canada, infrastructure approval processes have become heavily politicized. Oil will indeed flow from Alberta to U.S. refineries, but mainly via tanker cars. This increases transportation costs and, hence, fuel costs. It also makes spills and accidents, such as occurred in Lac-Mégantic, more likely.
It may be time to look at ways to free long-term infrastructure planning and approval processes from the short-term needs of politicians looking for a quick boost in the polls before an election.
[+] [-] gitaarik|4 years ago|reply
A good resource on how this works is The Crash Course [2] from Peak Prosperity, where it discusses this in relationship with the financial and environmental factors.
[0] https://en.m.wikipedia.org/wiki/Peak_oil
[1] https://en.m.wikipedia.org/wiki/Hydraulic_fracturing
[2] https://peakprosperity.com/courses/crashcourse/
[+] [-] tomohawk|4 years ago|reply
For example, the east coast has refineries, but they are geared for oil from the middle east. Why?
One reason is the Jones Act, which prohibits shipping between US ports except by US crewed/flagged vessels. There basically aren't any of those.
So, we ship liquified natural gas from Texas to Europe and Asia, but are not allowed to ship to the east coast or other US ports.
The other reason is that pipeline capacity to the east coast is severely constrained. Many planned pipelines have been cancelled. It takes decades with all the NIMBY laws to build one, but only one president to throw all that work out with a decree.
Pipeline capacity is further constrained due to regulations for boutique fuels. The gas you can use can vary from state to state. If you start a run of said fuel on the pipeline, you can't serve the whole intended market for when the pipeline was designed.
And then there is the whole ethanol thing. It has to get shipped at great expense from the midwest to the coasts where regulations say it must be used.
[+] [-] zip1234|4 years ago|reply
[+] [-] muyuu|4 years ago|reply
[+] [-] gniv|4 years ago|reply
[+] [-] unknown|4 years ago|reply
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[+] [-] caeril|4 years ago|reply
I wouldn't expect an economist or an American Jingoist cheerleader to ever crack a geophysics book, but someone should look at the production decline curves of these wells and then take a wild-ass guess how much longer the shale miracle will last.
We import oil because "energy independence" (at least from an oil & gas perspective, renewables and coal may be another matter) is a fleeting, rose-colored dream, from which we will soon awake.