US on track to become
world’s biggest producer
This graph from the U.S. Energy Information Administration shows the surprising surge in America’s production of oil and other fossil fuels. Click image to enlarge.
WITH GASOLINE COSTING more than $4 per gallon in California, drivers may wonder whether this may result from a shortage of oil.
Imagine my surprise, therefore, to hear on the BBC News that the California oil industry is booming.
In fact oil production throughout the United States is also booming. If present trends continue, this country may become the world’s largest producer of oil in less than eight years.
Whatever happened to peak oil? Weren’t we supposed to run out of the black gold sometime soon?
And what kind of a quandary do plentiful supplies pose for those who recognize the damage burning fossil fuels does to our planet?
Suddenly the questions are different. We are going to have to find some new answers.
The BBC web site with the tantalizing headline, “The receding threat of ‘peak oil.’
CONCERNS ABOUT OIL supplies running dry are receding, according to the International Energy Agency (IEA).
If one looks at U.S. government data, this conclusion is fully supported.
In a Feb 28, 2013 press release, the U.S. Energy Information Administration reported some good news.
U.S. oil production tops 7 million barrels per day, highest since 1992.
“U.S. crude oil production exceeded an average seven million barrels per day (bbl/d) in November and December 2012, the highest volume since December 1992,” the EIA said.
Meanwhile, the BBC’s David Shukman took a helicopter flight over California’s vast oilfields.
On Monday he reported from the chopper: “Although there is plenty of oil here, and they keep finding new resources, it is getting harder and harder to get at it,” Shukman said.
“They need more energy to put in to get the oil out.
“Nevertheless America at the moment remains on course, with assets like this … and more new discoveries … to produce as much oil amazingly as Saudi Arabia.”
Wow! Who cooda node? (Hat tip: Calculated Risk)
In the web version of his story it states:
“According to one IEA estimate, the U.S. may be on course to produce as much oil as Saudi Arabia by 2020, and possibly as soon as 2017.”
Data from the U.S. Energy Information Administration confirms the IEA projection.
It’s a stunning turn of events.
Its 2012 report entitled “Crude Oil Production: Annual-thousand barrels per day)”
notes a whopping 31 percent increase in American production of petroleum and other (fossil fuel) liquids since 2008.
Shukman, however, chose the wrong location for his example.
Of all the oil producing states, only California has seen a decline – of about nine percent – in output since 2008.
The Auto Club’s daily report on gasoline prices around the country. They have not declined, as one might expect, with rising crude production.
THE LARGEST GAINS have been seen in middle America – North Dakota and Oklahoma stand out – where the EIA reports production has more than doubled in the past five years, rising 104 percent.
Even the Gulf Coast states – where BP had a disastrous rig blowout and oil spill in 2010 – saw an increase of 37 percent in output.
Of course plentiful supplies have not had any impact on the price of gasoline. The reason?
There is no competition at the retail level. Three or four major suppliers – Exxon/Mobil, Shell and BP/Arco – dominate the market: well, in Southern California at least.
They will charge what the traffic will bear. And, they do!
More importantly, perhaps, is the long-term impact.
There is near unanimity, Fox News notwithstanding, that burning fossil fuels at the rate we do is a major contributor to climate change.
The impetus to switch to renewables depends a great deal on their price competitiveness; electric cars, for example, are currently much more expensive than gasoline powered ones. Even hybrids cost more.
Without the threat of either limited supplies or higher prices, it is reasonable to expect the incentive to switch to cleaner, more climate-friendly energy sources, will wane.
This is an issue that needs a great deal of further discussion.
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