Peak Oil is You
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Page added on June 8, 2013
Where Does America’s Oil Come From? (An Update)
In 2005, 60% of all petroleum consumed in the U.S. came from imports. The conventional wisdom then and for several years thereafter was that America was fated to become ever-more-dependent on increasingly costly petroleum imports.
Peak oil alarm was in vogue, popularized by books such as Peak Oil Survival: Preparation for Life after Gridcrash (2006), Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy (2006), A Crude Awakening: The Oil Crash – We’re Running Out and Don’t Have a Plan (2007), Hubbert’s Peak: The Impending World Oil Shortage (2008), and Confronting Collapse: Energy and Money in a Post Peak Oil World (2009).
M. King Hubbert, the originator of peak oil theory, correctly predicted in 1956 that U.S. domestic petroleum production would peak between 1965-1970. He also forecast a peak in global production by the late-2000s. In 2008, many commentators interpreted spiking crude oil prices as confirmation of Hubbert’s theory.
But Hubbert, who died in 1989, did not live to see the “shale revolution.” During the past decade, advances in directional drilling and hydraulic fracturing have made it economical to extract oil from the pores of rock. Although U.S. petroleum production is still lower than it was at its peak in 1970, it has increased every year since 2008 with no end in sight.
Citi GPS, a highly respected analytic group, argues that “surging supply growth” from fracked shale formations, deep-water wells, and Canada’s oil sands could “transform North America into the new Middle East by 2020.” Peak oil, if it exists at all, is likely decades away, not around the corner, as the books cited above assumed.
In a previous post, I discussed the Energy Information Administration’s July 2011 analysis of U.S. dependence on foreign oil. The EIA updated its analysis in May 2013. What has changed?
Basically, there’s more of the same. Already by 2010, more than half of all the oil we consumed came from the U.S. But whereas the balance then was 51% domestic and 49% imports, the balance as of 2012 was 60% domestic and 40% imports (exactly the reverse of the percentages in 2005).
In 2010, almost half (49%) of all petroleum imports came from the Western hemisphere. By 2012, more than half (53%) of all imports came from the Western hemisphere.
In 2010, the top five foreign suppliers (as a share of total imports) were:
Canada (25%)
Saudi Arabia (12%)
Nigeria (11%)
Venezuela (10%)
Mexico (9%)
In 2012, the top five foreign suppliers were:
Canada (28%)
Saudi Arabia (13%)
Mexico (10%)
Venezuela (9%)
Russia (5%)
Intestingly, Canada’s share (28%) equals that of the entire Persian Gulf combined (28%).
7 Comments on "Where Does America’s Oil Come From? (An Update)"
westexas on Sat, 8th Jun 2013 11:53 am
Assuming a 2013 US crude oil production rate of 7.5 mbpd (million barrels per day, crude + condensate), and a (probably conservative) overall average annual decline rate estimate of 10%/year from existing wells, in order to maintain a rate of 7.5 mbpd out to 2023, we would have to replace, over the next 10 years, the productive equivalent of every oil field in the United States, from Thunder Horse in the Gulf of Mexico to the North Slope of Alaska, and everything in between.
In round numbers, this would require us to add the equivalent of the current production of the Bakken Play every single year.
Currently, we process about 15 mbpd of crude oil in US refineries, and we import about half of that (the net import calculations are different on a total liquids basis). If we wanted to be crude oil self sufficient in 2023, we would need–assuming a 10%/year decline rate from existing wells–7.5 mbpd by 2023 to offset declines + another 7.5 mbpd to become crude oil self-sufficient. So, all we would have to do is to add the current equivalent of two Bakken Plays, every single year for 10 years. Or, over a 10 year period, we would have to add the 2012 crude oil production of Saudi Arabia + Kuwait + Iraq.
And then there is the global net export situation, where we have so far seen developing countries, led by China, consuming an increasing share of a post-2005 decline in Global Net Exports of oil. The reality is that developed net oil importing countries like the US are gradually being shut out of the global market for exported oil.
For more info on net oil exports, you can search for: ASPO + Export Capacity Index.
Beery on Sat, 8th Jun 2013 12:38 pm
The idea that peak oil is merely a theory, that the global peak is decades away and that the US will be energy independent by 2020 is a load of nonsense. Peak oil is a mathematical certainty, the global peak is a few years away at most, and the shale oil boom will most likely be measured in months rather than years.
Let’s not forget that globalwarming.org is part of the Cooler Heads Coalition, which is, in turn part of the Competitive Enterprise Institute, a libertarian think tank.
In short, these folks are bought and sold by big oil.
GregT on Sat, 8th Jun 2013 4:48 pm
Now matter how they try to spin it, US oil production peaked in the early 70s.
Dave on Sat, 8th Jun 2013 5:02 pm
dont take seriously anyone who preaches enrgy independence wrt the shale boom who only talks about import/domestic production figures, the key pie is demand, which has declined significantly, yet rarely do we see corresponding downward price shifts more than a few dollars.
Ed on Sat, 8th Jun 2013 5:35 pm
Net energy from oil is already declining but within a few years the volume of world oil production will also start to decline. It is going to be interesting to see what tactics the peak oil deniers will employ to keep this from the general public. Maybe start including vehicle electric oil equivalent or vehicle gas oil equivalent in the crude oil figures. ie. the oil saved by electric or LPG vehicles. Lol
BillT on Sun, 9th Jun 2013 4:14 am
NET energy, per capita, world wide has been dropping since the 70s, but you will never see that in the MSM propaganda.
shortonoil on Sun, 9th Jun 2013 8:15 pm
The last thing the oil industry wants is to have the world prepare for the inevitable; the coming decline of the age of oil. It has $trillions at stake to maintain the perceived perception that petroleum will remain the world’s primary, and uncontested energy source. Events over the next five years will drastically change that misconception. Even lobotomized Joe SixPack will begin to appreciate the sea change that will be occurring to the world he knew. Articles like the one above will only be met with disgust, and disillusionment!