Posts tagged “oil production”
INCREASED ENERGY INDEPENDENCE? The U.S. has met 83 percent of its energy needs this year through June, according to the Department of Energy
Oil production in the United States rose last week to levels not seen since January 1997, helping the country to reduce dependence on foreign sources of crude as it continues to implement the drilling and fracking technologies needed to increase daily oil output. (See also: Are President Obama’s Policies Causing U.S. Oil Production to Rise?)
Reports from the Energy Department released this week show that overall crude output in the U.S. rose 3.7 percent to 6.5 million barrels per day by the week of September 21, a trend that has continued since the country met 83 percent of its annual energy needs from the beginning of the year through June. Should domestic oil production continue at its current rate, the United States will enjoy 2012 as its most self-sufficient year since 1991.
Saudi Arabia’s per capita oil consumption is higher than the U.S. and most developed countries
Long known as perhaps the most oil-rich country in the world, Saudi Arabia’s dwindling crude oil deposits could see that nation become an oil importer in less than 20 years, according to a a report compiled by Citigroup Inc.
With the country’s peak rates of electricity production growing at up to eight percent per year and with oil and its derivatives used to generate about 50 percent of the power used by its own citizens, the bank warns that Saudi Arabia could find itself without the crude oil needed to keep its young and relatively wealthy population stocked with energy, forcing it to import the fuel from other nations as soon as the year 2030.
This week I was reading an article from the Associated Press called Some fracking critics use bad science. The gist of the article is that Gasland director Josh Fox used false information in his new film, The Sky is Pink. Among other things, he claimed that cancer rates were higher in Texas where fracking is taking place. Three different cancer researchers in the area contradicted him on this claim.
But then the article went on to say something that I thought was very relevant to debates on just about any controversial energy topic — fossil fuel subsidies, climate change, hydraulic fracturing:
One expert said there’s an actual psychological process at work that sometimes blinds people to science, on the fracking debate and many others. “You can literally put facts in front of people, and they will just ignore them,” said Mark Lubell, the director of the Center for Environmental Policy and Behavior at the University of California, Davis.
Lubell said the situation, which happens on both sides of a debate, is called “motivated reasoning.” Rational people insist on believing things that aren’t true, in part because of feedback from other people who share their views, he said.
As a result, misinformation is hard to stamp out, because it tends to be repeated — confirming the views people already hold. That brings me to the topic of today’s column: Climate change claims around the Keystone XL pipeline.
Since 2005, the “total oil supply” for the United States as reported by the Energy Information Administration increased by 2.2 million barrels per day. Of this, 1.3 mb/d, or 60%, has come from natural gas liquids and biofuels, which really shouldn’t be added to conventional crude production for purposes of calculating the available supply. Of the 800,000 b/d increase in actual field production of crude oil, almost all of the gain has come from shale and other tight formations that horizontal fracturing methods have only recently opened up. Here I offer some thoughts on how these new production methods change the overall outlook for U.S. oil production.
Let me begin by clarifying that “shale oil” and “oil shale” refer to two completely different resources. “Oil shale” is in fact not shale and does not contain oil, but is instead a rock that at great monetary and environmental cost can yield organic compounds that could eventually be made into oil. Although some people have long been optimistic about the potential amount of energy available in U.S. oil-shale deposits, I personally am pessimistic that oil shale will ever be a significant energy source.
In this week’s episode of R-Squared Energy TV, I discuss the recently released paper by former Eni executive Leonardo Maugeri — in which he suggests global oil supplies will increase by 17 million barrels per day by the end of the decade — as well as George Monbiot’s highly publicized reaction to the report.
In the first installment of this series, I took a look at U.S. and global oil reserves according to the 2012 BP Statistical Review of World Energy. Today, I want to examine oil production statistics since 1965. Highlights of this article and topics that will be explored include:
- New global oil production record set in 2011, but the growth rate is slowing
- Global oil production has grown by 163% since 1965
- Production picked up in the U.S. again during President Obama’s first year in office
- U.S. share of global oil production dropped from 24% in 1970 to 9% in 2011
- Quality of oil produced today is lower than it used to be
Last week the 2012 BP Statistical Review of World Energy was released. I always look forward to the release, because the data represent the most comprehensive, publicly available database on energy consumption and production statistics. I have now read through this year’s report, picking out what I believe are important trends and data points. In this column I want to highlight several key points, including:
- The reason for the conflict in numbers between the EIA and BP
- Barack Obama’s historical position in presiding over increasing U.S. oil production
- The U.S. becoming more energy independent
- New global records for oil production and consumption
- Energy consumption and carbon emissions differential between OECD and developing countries
- Growth in renewables such as solar, wind, and biofuels
Here I describe some interesting new research on modifying Hubbert’s model of peak oil to take into account the incentives for additional production that higher oil prices would be expected to bring.
A recent IMF Working paper by Jaromir Benes, Marcelle Chauvet, Ondra Kamenik, Michael Kumhof, Douglas Laxton, Susanna Mursula and Jack Selody begins by noting the trend in forecasts of oil production from the U.S. Energy Information Administration. In earlier years, these forecasts were primarily just extrapolations of trends in global demand, with the assumption that supply would grow as needed to meet demand. If EIA’s 2001 forecast had proven accurate, the world today would be producing about 100 million barrels of oil each day. The EIA forecast for 2012 has been revised downward in each successive year, and now stands just under 90.
An ongoing discussion among some of us analysts at Consumer Energy Report has been about whether having natural resources like oil or coal is actually beneficial to a country (see Are Countries With Vast Oil Resources Blessed or Cursed?, Oil Dependence — Tom Friedman’s False Narrative, and Oil — Easy to Produce, But Not Easy to Buy).
The argument which I’ve made is that a boom in natural resources production can cover up some short-sighted economic policies; in effect, the earnings from producing oil mean that countries do not have to invest in their education or produce their own manufactured goods. The other side of the argument is that it can only be a good thing for new resources to be found.
Leaving aside the question of whether natural resource wealth undermines institutions or causes corruption (and there is good evidence of a resource curse among developing countries) there is one thing that increased production of oil does, once it gets to be a big enough sector of the economy: it pushes up the value of that country’s currency.
All else equal (as economists always have to say), new production of natural resources strengthens the domestic currency. That’s because those resources are either exported or are used to replace imports.
Red Herrings: Speculation & Regulation
As I noted last week, I have been working on a short paper for ASP on gas prices. It was published earlier today with a title of “Cause & Effect: U.S. Gasoline Prices.” I also published an Op-Ed in The Hill “Running on empty: Failing to address high gas prices“ and was quoted in Reuters saying “The truth is, neither party is offering policies that will effectively address high gas prices.”
The report seeks to get beyond both party’s preferred narratives on gas prices and looks more deeply at the root causes of today’s high gasoline prices. Hopefully, it will puncture some of the assertions and rhetoric that both political parties use about gas prices, whether it’s shouting “speculation!” by those on the left or “too much regulation!” by those on the right.