With the upsurge or production from the Bakken Shale and a slump in demand due to the bad economy, the rumor has somehow gotten around that the U.S. may soon become an oil exporter – or in fact already is. Several sources have fueled this perception by saying that the U.S. is a net exporter when refined oil products are included. But this is a very misleading notion. If the U.S. imports oil, refines it and then exports it again as gasoline or diesel fuel, that may make us a successful middle man but it hardly constitutes “energy independence.”
Gail Tverberg, a member of the American Academy of Actuaries who takes an interest in energy issues, has decided to set the record straight. On her blog, Our Finite World, reproduced on The Oil Drum, she lays out the case as to why the U.S. is not an oil exporter and is not likely to become one any time in the future.
Tverberg cuts through the confusion of different types of distillates by using BTUs as the standard. “On a Btu basis, the US imported 58% of the oil it consumed in 2011,” she writes. “This percentage is down from a high of 67% in 2005 and 2006, but it is still very high. If the US wants to become an oil exporter, it must first get its imports down from 58% to 0%, and then ramp up production by enough to have oil to export as well.”
The chart at the left is the Energy Information Administration’s representation of consumption versus production through 2011 with conservative, straight-line projections of the future through 2032. Note that since 2008, demand has fallen considerably while output has crept upward after a long decline dating back to 1984. This is a positive trend. But there is still a gap of 20 BTUs out of a total consumption of 35 BTUs. That gap is made up almost entirely through imports. (Domestic ethanol production contributes a tiny 2 percent of consumption but Tverberg sets this apart. It could be included but would make little difference.)
In order to become an “oil exporter” she notes, the trends would have to follow the pattern illustrated at right. Consumption would have to fall to nearly 25 quadrillion BTUs – a level not reached since the 1970s – while production would have to exceed anything from our past history. Neither of these trends is likely to happen. The straight-line, continuation-of-the-present forecast of EIA may be a ham-handed estimate but it is probably closer to reality.
Tverberg goes on to note that while the recent upturn in Bakken production represents a very promising trend, its global impact will be small. The same will be true of other “tight” oil reserves now being explored. Although production from these sources may increase, output form offshore drilling and other conventional sources will be decreasing at the same time.
While this represents a summary of Tverberg's level-headed anaylsis, the best thing to do would be to read the entire report here.