U.S. may be inching toward oil independence

4:04 PM, Feb 7, 2014   |    comments
Photo taken August 21, 2013 shows a pumpjack (also known as a Nodding Donkey) near Tioga, North Dakota.
  • Share
  • Print
  • - A A A +
  • FILED UNDER

 


 


U.S. oil imports fell sharply again in 2013 while petroleum exports rose, leading some analysts to proclaim that a new era of energy independence is just a few years away.

Experts largely credit new drilling techniques that have unearthed vast troves of previously inaccessible oil embedded in shale deposits in states such as North Dakota and Texas.

"We're at the beginning of a long upswing," says Citigroup analyst Eric Lee.

Crude oil imports declined 9% last year to 2.8 billion barrels and are down 17% since 2010, according to the Census Bureau.

Meanwhile, exports, mostly of refined gasoline and diesel, rose about 11%, narrowing the country's petroleum deficit by about $59 billion, or 20%, to $233 billion. Lee attributes the exports increase to the abundance of U.S. oil and reduced U.S. consumption as fuel-efficient vehicles proliferate.

The shrinking petroleum gap was almost entirely responsible for a $63 billion decline in the nation's overall trade deficit last year to $471.5 billion, the lowest since 2009, Census said.

The nation's diminishing dependence on foreign oil doesn't insulate it from wild price swings since oil prices are set by global markets. But growing U.S. production has added to the world's supply and prevented sharp price increases that could have resulted from political conflicts that reduced oil exports from Iran and Libya since 2012, analysts say.

"U.S. crude oil production has played a major role in offsetting disruptions elsewhere," says Jim Burkhard, an analyst with research firm IHS CERA.

U.S. crude oil production increased to an estimated 7.7 million barrels a day last year from 6.5 million barrels a day in 2012, according to the Energy Information Administration. The EIA expects production to rise another 16% by 2020. But Citigroup's Lee expects even more dramatic gains by then, leaving the U.S. a net exporter of oil and making it virtually self-sufficient in oil production.

Oil independence could safeguard the nation from more severe supply constraints, such as the 1973 oil embargo by Mideast nations that resulted in long gas lines in the 1970s, says analyst Fadel Gheit of Oppenheimer & Co.

Growing production and falling imports also means U.S. consumption increasingly benefits the nation's economy. "You're sending less money abroad and that's a potential economic stimulus," says John Felmy, chief economist of the American Petroleum Institute.

The oil boom already created about 1.7 million U.S. jobs from 2008 to 2012, IHS CERA estimates. Citigroup expects it to spawn another 3 million jobs by 2020.

Rising production has led to recent calls by the oil industry to lift a 40-year-old ban on most crude oil exports. Last week, the Senate held its first hearing on the issue in 25 years.

When the ban was imposed after the oil embargo "we believed we were dealing with energy and oil scarcity," Felmy says. "That's not true anymore."

You may also like... 

Arrrrrr! Pirates invade Tampa for Gasparilla

Treason? Secret Service visits candidate who says Obama should hang

Mystery House: Unsuspecting house holds a hidden secret

Abuse Arrest: Hog-hunting mom leaves kids in freezing car

Seeking Sasquatch: Bigfoot sightings abound in Colorado

Cyclist stuck in windshield: "Hi, I'm the guy you hit"

Miracle Baby: Tampa toddler has 5-organ transplant

Here kitty, kitty: Lion escapes enclosure at Pasco sanctuary

#ShortYellows: Florida quietly shortened yellow lights

Kittens shot: Officer shoots kittens in front of children

Popular photo galleries:

Faces of Meth: Devastating before and after photos of meth abusers

Trayvon Martin Shooting: Trayvon Martin crime scene photos and George Zimmerman injury photos 

Hooters Winners: Winners of the 2013 Hooters swimsuit pageant

Rejected: Funny Florida license plates rejected by the DMV***warning graphic***

Deadly sinkhole: Home collapses, man dies in giant sinkhole

Popular Databases:

Florida Sex Offenders: Look up sex offenders in any Florida neighborhood here

Restaurant Inspections: Look up inspection reports for any Florida restaurant here





Most Watched Videos