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U.S. Oil Output to Overtake Saudi Arabia’s by 2020
- sanxiyn 14y agoI find this hard to believe. Compare http://www.theoildrum.com/node/9584 http://www.theoildrum.com/node/9584
- ChuckMcM 14y agoYou can always be assured that predictions based on extrapolation in systems like energy are always wrong. The claim (that we'll out produce Saudi Aramco by 2020) is bogus. You read comments like this "U.S. oil imports will drop to about 4 million barrels a day in 10 years from a current average of 10 million because of new production and stricter fuel efficiency standards for cars and trucks, which will curb demand, Birol said." and you want to say 'Bzzzt! And thanks for playing' as you consider that people with better gas mileage drive more, they don't 'not drive'. The reason is not intuitive (see the Jevon's Paradox [1]) but it is also not unexplainable either. It will be interesting if significant chunks of our driving population switches to electrics. That is because the electricity production facilities are built on coal, gas, and nuclear and that could shift our consumption needle off oil toward those other forms. But nobody is yet extrapolating even 10% electric car ownership by 2020 much less the 20 - 30% that would be needed to move the numbers on a national scale. So the the next question is, "OK if this is bogus, why even write it?" and if I had to guess I would say it was a 'feel good' piece about Fracking to try to offset the ever growing evidence that the dangers of hydraulic fracturing require much more oversight and regulation if we want to do it safely. The extraction companies have not shown a particular willingness to choose 'safety' over 'get it done' yet. [1] http://en.wikipedia.org/wiki/Jevons_paradox http://en.wikipedia.org/wiki/Jevons_paradox
- _delirium 14y ago> The extraction companies have not shown a particular willingness to choose 'safety' over 'get it done' yet. I'm not as negative as most people I know on fracking, but I do have some worry that there's a culture like this in place currently. I've been particularly surprised by surface spills/leaks of fracking chemicals in Pennsylvania, which just seems sloppy. If you're trying to convince the public that a fairly new technology, which people have concerns about, is safe and won't contaminate groundwater, you should definitely be sure to get the "easy" parts completely right, such as competently storing chemicals above ground.
- cadalac 14y ago>if I had to guess I would say it was a 'feel good' piece about Fracking to try to offset the ever growing evidence that the dangers of hydraulic fracturing require much more oversight and regulation if we want to do it safely Fracking is indeed extremely dangerous:http://www.cbc.ca/news/canada/british-columbia/story/2012/09/06/bc-fracking-earthquakes.html http://www.cbc.ca/news/canada/british-columbia/story/2012/09... and many hard to believe promises of jobs and cost reductions in energy have come from the companies and even government. Check out the gasland documentary.
- ck2 14y agoAll it took was $4 gas. All the Saudis have to do is drop their price to the point where gas is $2.50 again and suddenly all the US companies go under in 12 months. But think how much we'll save by having less than 10k troops in the middle-east someday.
- dataminer 14y agoI have come to the realization that oil prices do not translate directly to gas prices we pay at the pump. Even with a glut of oil, the gas prices at the pump depends on refineries which are controlled by the local companies. I think the $4 gas is the new normal. Also, the Saudi economy rely a lot on high oil prices so they wont dump more oil in the market.
- joshuahedlund 14y ago> oil prices do not translate directly to gas prices we pay at the pump Technically true, but the correlation is usually very strong: http://www.gasbuddy.com/retail_price_chart.aspx?city1=USA%20Average&city2=&city3=&crude=y&tme=36&units=us http://www.gasbuddy.com/retail_price_chart.aspx?city1=USA%20...
- Evbn 14y agoGas prices increases follow oil price increases. Gas prices don't decrease much following oil price decreases.
- simonh 14y agoThe Saudis and other oil exporters don't actually set the price of oil directly. OPEC have historically controlled oil prices indirectly by dialling their output up or down, but most producers are running flat out and have been for ages. Saudi used to keep around 1.5m BPD production in hand to moderate supply disruptions and keep prices stable, but now they are running much closer to their maximum practical output capacity. Even if they opened all the taps and pushed forward more aggressively to bring more on line it would have a much more subdued effect than in the past. The days when they could materially affect prices on an ongoing basis are over. Contrary to popular opinion $4 gas isn't really the producer's fault. Maybe they could get it down to $3.50 for a while (pure guess), but the idea they could just turn a spigot and gas would be £2.50 a gallon again is unrealistic.
- drpgq 14y agoI have to say I'm skeptical about this, although a Saudi Arabia decline in production could make it possible.
- slurgfest 14y agoEven if output reaches that level, exports won't because the US uses so much more oil than Saudi Arabia. As demand grows, the US can still be a net importer and still have the same problems related to petroleum reliance.
- ry0ohki 14y agoThe article addresses that, domestic use is down. We already export quite a lot of refined oil as it is to countries that don't have refining capacity.
- InclinedPlane 14y agoThe US was a net exporter of petroleum products in 2011.
- kyledrake 14y agoI think stopping the destruction of our planet's climate is more important than becoming oil independent and having cheap petroleum, personally. This is troubling news to me, I was hoping that peak oil would start people down the track of dealing with these problems.
- deelowe 14y agoPeople are on track to deal with these problems (or at least are attempting to be). There are hybrid cars all over the place now, Tesla Motors is doing well as a company and there is a ton of research going into clean energy. These are just extremely difficult problems to deal with. In the meantime, the country can't just let society fail as a whole. The whole world would descend into chaos and war. The US has to do something to protect the country and the economy. It can't allow itself to become wholly dependent on oil produced by enemies of the state in an inherently unstable region ran by crazy dictators and terrorists. So what do they do? They hedge and ensure the country can keep a seat at the negotiation table when things get tough. Given the size of the US and the dependance on trucks, rail, and shipping to move cargo, even rather small changes in the price of oil can drastically alter the economy.
- kamjam 14y ago$4 a gallon is peanuts. Price of gas in Rome, Italy was 1.87 euro per litre when I was there in July. Per litre, not gallon! So people get around town on little mopeds, motorbikes, small cars and a lot of SMART cars around as well. I agree there is a lot of forward momentum with hybrid/electric cars in terms on technological advancement, but the uptake in the US is abysmal. Just because you drive an electric car does not mean there is no CO2, that electricity needs to be generated from somewhere and unless that source is renewable energy then you are back to square one. But it's not just cars you need to think about: generation of electricity, airplanes, ships, cheap exports from the rest of the world... I remember reding a study a few years ago stating that shipping outputs a lot more CO2 than air travel. Also, ships use the cheapest, nastiest, left over fuel from the refinement process so ends up throwing our more CO2. http://www.guardian.co.uk/environment/2007/mar/03/travelsenvironmentalimpact.transportintheuk http://www.guardian.co.uk/environment/2007/mar/03/travelsenv... I agree the US probably feels like it has to do something, but constantly patching over the cracks is never really going to fix the problem. It can't allow itself to become wholly dependent on oil produced by enemies of the state in an inherently unstable region ran by crazy dictators and terrorists. Yes. Thanks for the insightful comments. I'll be sure to vote you in for president when you run for election.</sarc>
- donohoe 14y agoWonderful - we'll be living in an oil rich utopia - right?
- zrb0529 14y ago@ChuckMcM is correct - this is an advertisement for fracking.
- _delirium 14y agoIt'll be interesting to see the extent to which this ends up being good or bad. In direct economic terms, most likely good: lower energy prices make some industries more competitive, and direct fuel exports (like any commodity export) are a source of income. On the other hand, technological advancements tend to come from constraints, so the U.S. could be setting itself up for 10-30 years of easy living on cheap oil/gas, but fall behind places like Europe, or perhaps even Asia, on R&D and production of more energy-efficient technologies, or other sources of power generation, which might eventually turn out to be important. Hard to say.
- stephenhuey 14y agoIt's interesting that the IEA is also projecting 90% of Middle Eastern oil exports will go to Asia by 2035. http://www.iea.org/newsroomandevents/pressreleases/2012/november/name,33015,en.html http://www.iea.org/newsroomandevents/pressreleases/2012/nove...
- notatoad 14y agoThee article seems to skip pretty quickly over what, to me, is the important point: >Will transform the U.S. into the largest producer for about five years starting in 2020 So the us is going to start pulling it's oil out of the ground a lot faster. And then it's going to run out of oil. I think it might be better to just keep buying from the Saudis and keep a little bit in the ground.
- Tyrant505 14y agoI always come back to this point as well. Buy till there is no more, use nothing till everyone has ran out.
- ahallerberg 14y agoInvest a little over a lot of time versus a lot in a little time since like the winner to me.
- refurb 14y agoBut how does this help us? The oil market is international. If we wait until everyone else runs out of oil, then start drilling ourselves, we're still paying ultra-high prices for it. Of course, unless you are suggesting we don't sell any of our own oil at that point. Sounds good in theory, until you realize that keeping oil product for domestic use (at say $100/bbl) leaves a lot of money on the table when you can sell it to another country for $400/bbl.
- patrickgzill 14y agoIf for some reason, coal to oil (synfuel or syncrude) were to be ramped up, it could be quite astounding. There are only trial runs at this point, however. Germany during the WWII era was able to produce 75% of their oil needs due to synfuels. Once the plants were bombed or disrupted, Germany ran out of fuel and lost the war.
- ccozan 14y agoNot only trial runs. See this http://www.post-gazette.com/stories/business/news/south-africa-has-a-way-to-make-oil-from-coal-446384/ http://www.post-gazette.com/stories/business/news/south-afri... . This is a faciltiy that works, operated by Sasol. They plan to build a 80k barrel/day facility in China. PS. noteworthy in the article is the mentioning of Obama, who was pushing for such a coal-to-oil technology to be brought to US.
- edj 14y agoAs other commenters have pointed out, the US only overtakes SA for a few years before falling behind again: "By around 2020, the United States is projected to become the largest global oil producer (overtaking Saudi Arabia until the mid-2020s)" So maybe that part of the story is overblown. But perhaps more interesting is that the US will supposedly become a net exporter shortly thereafter: "The result is a continued fall in US oil imports, to the extent that North America becomes a net oil exporter around 2030." Source: IEA World Energy Outlook 2012 - Executive Summary http://www.iea.org/publications/freepublications/publication/English.pdf http://www.iea.org/publications/freepublications/publication... [PDF]
- ojbyrne 14y agoUS != North America.
- edj 14y agoGood point. I didn't see that. When you throw in Canada's tar sands, it's a lot less surprising that North America could be a net exporter in <20 years.
- ojbyrne 14y agoI believe Mexico figures in those calculations also. According to this field they have large reserves, though extraction is expensive (like oil shale and tar sands).
- grannyg00se 14y agoI find these oil report news pieces to be incredibly lacking almost all of the time. First of all, this person is speaking predictions and postulations without showing a single piece of data. Not a good sign. I'm very skeptical, because the net return on oil reserves has been steadily declining since the early 1900s. Shale oil is extremely expensive to extract/process and also relatively dangerous. The production cost ratio is less than 10:1 if I recall correctly, while in the early days of oil drilling the ratio was in the hundreds to one. You could pretty much poke a hole in the ground and have sellable oil gushing out with no further effort. Now it's a struggle to get just past the "economically feasible" point. The tarsands in Canada are a great example of this. Currently they are sitting at a ratio of about 5:1. And that's also a very dangerous, and highly polluting extraction process. Another problem is oil reporting is context. They'll throw out a number like 169 billion barrels of oil. That's the current reported bitumen content in the tarsands. Sounds huge. If you do the math, that's about five years' worth at current world consumption. Five years. For one of North Americas largest and most championed reserves. With the extraction ratio taken into account, we can slice one year off of that. And if the demand trend continues it's even less. I'm not convinced that a few percentage points of extra fuel efficiency in consumer vehicles is really going to make a significant dent in demand.
- josefresco 14y agoFrom the article: "Iraq will be the biggest contributor to new oil supplies, raising production to 6 million barrels a day by 2020." So Iraq's oil is our (US) oil? Or am I misreading that statement? I guess they could be saying that overall Iraq will see the biggest jump of all nations? Not sure.
- Nux 14y agoBy 2020 I hope there won't be so much need for oil (i.e. electric cars).
- graeme 14y agoOil is a stock resource. There is a finite amount of it. It is treated as a flow resource. Discussion focusses on annual production, rather than total extractable stock. It is not impressive to run through a stock of resources at a faster rate.
- jsilence 14y agoJust a brief pointer that we are heading at 8,50$ per gallon in Germany right now.
- wffurr 14y agoAt $110 for Brent, all sorts of odd and difficult oil supplies will get developed. What's the net energy extracted for the economy to do useful work with, though? The energy (and dollar) cost of extracting oil shales and deepwater is enormous compared to the Kingdom's costs for their supergiant fields. This is good news, if true, for the US' balance of trade, but sustained $100+/barrel oil will induce major structural shifts in our economy whether we're exporting or importing. The EROEI (Energy Returned on Energy Invested) implications of these prices are even worse. At a certain point, the only reason to continue to drill is because it's marginally cheaper than the energy intensive task of creating liquid fuels from organic feedstocks (i.e. - ethanol). We'll have to have switch at that point to something else as the primary source of energy for our economy, but nothing else is even close to being ready. I hope you're all ready to work like Joey Hess, netbook battery by candle light: http://news.ycombinator.com/item?id=4721645 http://news.ycombinator.com/item?id=4721645
- prpatel 14y agoawesome! this will let us save tons of money by not forcing us to invest in solar, wind or other sustainable sources of energy! DRILL BABY DRILL!