In addition to explaining why America is not “energy independent”, Steve has a dire forecast for the US oil industry. Here’s the details…
How is the U.S. is becoming “Energy Independent,” if we are still importing almost 8 million barrels per day of oil?? While the Mainstream media and the Whitehouse continue with the energy independent mantra, the U.S. is still highly reliant upon a great deal of foreign oil. And, why would the U.S. import 8 million barrels of oil per day if its shale oil production has surged over the past decade?
Well, it’s quite simple. The U.S. Shale Oil Industry is producing way too much light tight oil, with a high API Gravity, for our refineries that are designed for a lower grade. So, as U.S. shale oil production exploded, the industry was forced to export a great deal more of this light oil overseas.
Here is a chart of the different grades of U.S. crude oil and condensate production:
The figures in the table above are shown in thousand barrels per day. The U.S. produced 483,000 barrels per day (bd) of heavy oil in April, 3.9 million barrels per day (mbd) of medium oil and 5.5 mbd of light oil and condensate. Condensate’s API gravity usually is 50° or higher. The 3,688,000 bd of 40°-45° crude is mostly shale light tight oil produced in the shale oil fields in North Dakota and Texas.
As I mentioned, the United States can’t be energy independent if it must rely upon 8 mbd of foreign oil supplies. According to the charts from the CrudeOilPeak.info, the United States imported 7.8 mbd of oil over the past 12 months:
You will notice that most of our oil imports come from Canada (Dark Brown). The reason for the growth in Canadian heavier oil imports (oil sands) is that it is used to blend with our shale light tight oil to make a more medium blend. Thus, we need the heavier Canadian oil sands to blend with our lighter shale oil. However, we still produce way too much light oil, so we are forced to export it overseas.
Matt, the author at CrudeOilPeak.inf, does a great job producing oil charts, and here is another below:
This chart shows the increase in U.S. oil exports. As shale oil production increased significantly in 2017, so did our oil exports. From the article, US crude oil imports and exports update April 2018 data:
The US had a crude oil export ban in place but Canada was exempted due to the integrated oil supply system. The export ban was lifted in January 2016 because US refiners could not absorb increasing quantities of tight oil (one reason why oil prices dropped).
In many countries extra light US shale oil is being used as a blending component, but not as bulk feedstock. Important volumes of US crude oil exports (which would matter on global oil markets) go only to a few countries.
No matter what clever US energy independence calculations are out there, the fact remains that the US is physically dependent on around 8 mb/d of crude oil imports, 4.3 mb/d out of which come from countries where oil production has already peaked and/or where there are socio- economic or geopolitical problems. As of April 2018 US net crude imports were about 6 mb/d, far from oil independence.
Unfortunately, very light tight shale oil is not in big demand overseas. Instead, our shale oil exports are used more as a blending component rather than a bulk feedstock. So, the more shale oil we produce, the more we will be forced to export.
The United States will never become energy independent even if domestic shale oil production continues to surge higher. However, I believe shale oil production in the states will likely start to decline within the next 1-3 years. When the OVER-BLOATED and HIGHLY LEVERAGED stock markets begin to collapse, they will also take down the oil price. A falling oil price will destroy the already weakened shale oil industry.
The Death of the U.S. Shale Oil Ponzi Scheme is approaching. If you have not seen my video on the Shale Oil Ponzi, I highly recommend you watch the presentation below:
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