The U.S. reported a monthly trade deficit of $44.4 billion this morning. We run an annual deficit of over $500 billion per year as we prefer to consume rather than produce. It’s been working like a charm for decades. You may have heard Obama and the MSM blather on about America’s energy independence. You may have heard about the shale oil miracle and the thousand years of natural gas. Did you know we’re going to be energy independent within the next 10 years?
A funny thing about that energy independence. If you click the link below and go to Exhibit 17 at the very back of the Census report (I wonder why?) you see some fascinating data about our imminent energy independence. It seems we IMPORTED 3.85 BILLION barrels of oil in 2012 and paid $398 BILLION to foreigners for this petroleum. For the math challenged, that means we paid $103 per barrel.
In January we imported another 327 million barrels and shelled out $31.7 billion to countries that despise us. We will import somewhere between 3.7 billion and 4.0 billion barrels of oil in 2013. We currently consume 6.6 billion barrels per year. Do the math. When exactly will we be energy independent?
http://www.census.gov/foreign-trade/Press-Release/current_press_release/ft900.pdf
razzle says:
We have plenty of energy in all areas. We have plenty of food, arible land, fresh, clean water. This is fear-mongering at a high level. I believe we could become energy independent, seriously! That is the good news.
The not so good news; We have TOO many people to pull this off
Hot debate. What do you think?
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7th March 2013 at 10:37 am
JJ3 says:
So razzle you are a eugenicist? You are in favor of population reduction?
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7th March 2013 at 10:44 am
TPC says:
Much like the US budget, things won’t be fixed until we come at this problem from multiple angles.
Reducing consumption is the first step towards energy independence, and the one that gets the least traction politically.
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7th March 2013 at 10:44 am
TPC says:
@JJ3 – Quit strawmanning. Overpopulation is not the same things as eugenics.
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7th March 2013 at 10:45 am
Administrator says:
You consider actual data as fear mongering? WTF.
Your comment is like a fart in the wind. Gibberish backed by bullshit.
Make your fucking case with fucking facts.
Storylines of energy independence are NEVER backed up by facts.
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7th March 2013 at 10:50 am
razzle says:
JJ3
Not at all. Considering the absolute need for oil in many, many areas to maintain our lives, fertilizer.plastics etc.etc. I am trying to look down the road at a possible tipping point. I am doing my best to conserve where I can in the mean time. I want everyone to prosper and enjoy their lives to the utmost. I look to the future and see oil reserves declining and my hope would be some alternative energy product. Without suffcient oil our lives will change dramatically.
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7th March 2013 at 11:03 am
razzle says:
Admin, Sorry, that was sarcasm I will try to be clearer, my bad
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7th March 2013 at 11:05 am
Bostonbob says:
If the US reaches energy independence using fossil fuels it will be because we are in the depression to end all depressions and there is not enough money to buy the energy available.
See Attached;
Exhibit 2. U.S Energy Production From Fossil Fuel Sources. Source: EIA.
2011 fossil fuel energy production was 1.3 quadrillion British thermal units (Quads) higher than the previous peak in 1998 with 60.6 Quad in 2011 and 59.3 Quad in 1998. The EIA reports comparative energy production in Quads to normalize the various measures of its components: cubic feet for gas, barrels for crude oil and natural gas liquids (NGL), and short tons for coal. A Quad is a measure of the heat content of those energy sources when burned. Exhibit 3 shows how this conversion is made.
Exhibit 3. Quad conversion Table. Source: EIA.
One Quad is approximately equal to 1 trillion cubic feet of gas, 180 million barrels of oil, 120 million barrels of NGL (about 65% of the thermal content of crude oil), and 36 million short tons of coal.
Exhibit 4 shows the various components of total fossil fuel energy at a scale appropriate to understanding which sources increased and decreased over the period of the graph.
Exhibit 4. U.S Energy Production From Component Fossil Fuel Sources. Source: EIA.
Comparing 1998 with 2011 production, coal decreased by about 184,000 tons per day, natural gas increased a whopping 11 billion cubic feet per day (bcf), crude oil decreased almost 605,000 barrels per day and NGLs increased approximately 160,000 barrels per day (Exhibit 5).
Exhibit 5. 2011 vs 1998 Fossil Fuel Component Comparison Table. Source: EIA.
Dr. Perry celebrates the success of the shale revolution in his blog calling it “a big deal.” He points out that the U.S. is closer to energy self-sufficiency than at any other time in the past 22 years. But the problem for the U.S. is not total energy. We have always had an abundant endowment of coal and natural gas. The problem is liquid fuel for transport and that comes from crude oil. The shale revolution in oil that he describes is notable and important but it only returns production to 2003 levels which were lower than at any time after 1951.
There is nothing untrue in Perry’s blog but it, unfortunately, contributes to the distorted viewpoint that the U.S. will soon become energy independent and will no longer need to import foreign oil. The U.S. has used more oil than it produces since records were kept in 1920 but became a true net oil importing country after World War II (Exhibit 6).
Exhibit 6. US Crude Oil Production and Consumption Since 1920. Source: EIA.
After production peaked in 1970, not even the discovery of Prudhoe Bay, the largest oil field in the U.S. (12.8 billion barrels produced to date), brought production back to the 1970 peak. Including the recent increase from shale oil, the gap between production and consumption is approximately 9 million barrels of oil per day, almost as much as 1970 peak production.
I am encouraged by the slight reversal in U.S. oil production but see no way that we will become oil independent. The star performer in total fossil fuel production is natural gas. While it is true that gas offers the possibility of replacing crude oil refined products as a transport fuel, this will be decades in the future (massive equipment changes and distribution infrastructure) and does not address the near- to medium-term problem of oil imports. Curiously, nowhere in his blog about economics and finance does Perry discuss the cost and profitability of shale gas or shale oil. Rather than write so much about energy, a subject outside of his training and experience, it would be useful if he wrote about the economics of the shale developments that he is so exuberant about. That would be a big deal.
Sorry the graphs did not copy. The article is from The Oil Drum from last October. Admin is right, it is all about oil, which provdes the vast majority of the energy we use for transportation where the bulk of our energy is used. Other forms of liquid fuels are not as energy dense and will not easily replace oil/gas withou major infrastructure changes. This is the hard reality that many refuse to face.
Bob.
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7th March 2013 at 11:13 am
Administrator says:
razzle
Nicely done. You raised my blood pressure and had me foaming at the mouth ready for a fight.
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7th March 2013 at 11:17 am
Bostonbob says:
The previous article did not even get into EROEI, as the current boon in energy extracted whether tar sands or shale is at the expense of using an ever greater part of those reserves to retrieve that energy. When it costs you a barrel to retrieve a barrel all bets are off.
Bob.
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7th March 2013 at 11:20 am
AWD says:
We shipped another few hundred billion out of the country. Our booming economy is resulting in less gas consumption. Imagine what our trade deficit would be if our economy wasn’t in a recession. We just need to get consumption down to 1993 levels.
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7th March 2013 at 11:26 am
razzle says:
Admin
I have been reading this blog and many for a great while, I never post, so this is new to me. I should know better, to add the /sarc tag . Sorry about the blood pressure. Maybe we can fight in the future /sarc
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7th March 2013 at 11:32 am
Bostonbob says:
Razzle,
Don’t take it personally, Admin loves to throw down. We haven’t had a really good shitstorm in a while and I am guessing Admin is trying to get someone brave enough to rise to the bait. A good beating from Admin is a badge of honor IMHO.
Bob.
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7th March 2013 at 11:52 am
TPC says:
“A good beating from Admin is a badge of honor IMHO”
Only if they stick around afterwords.
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7th March 2013 at 11:56 am
IndenturedServant says:
It’s pretty simple really. We will achieve energy independence at exactly the same moment other countries stop selling us energy. It might happen a bit sooner if they stop accepting $$$ in exchange for oil.
I_S
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7th March 2013 at 12:44 pm
sangell says:
With the US having a ratio of .8 vehicles per resident meaning we have to fuel 800,000 vehicles for every new million residents energy independence will always be an illusion. However had we not allowed 50 million new residents over the past 30 years we’d probably be there, if not today, very shortly.
This is the problem with almost EVERY issue we face. We have a government that allows a flood of new immigrants to come to the US while it explains it needs more revenue to meet the costs those new residents impose. It is not as if we are selecting the cream of the available crop for new residents either. More like scraping the bottom of the barrel. We do not see the middle or upper middle class of Mexico seeking to emigrate to the US. They are fine where they are. It is the dregs, the surplus unemployable population of Central America and Mexico. And its not just Latin America. We have Neolithic Africans, Afghan illiterates and criminals from every corner of the earth coming to and be allowed to remain in the US. Energy independence is not possible nor is there a solution to any other social concern as long as this human floods continue.
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7th March 2013 at 1:01 pm
OF says:
razzle, if you don´t know were you are anymore, “blow me” seems to be the magic phrase.
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7th March 2013 at 2:28 pm
Dorkus Maximus says:
Admin,
Sarcasm doesn’t translate well in print, you fat fuck.
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7th March 2013 at 3:22 pm