Our lives revolve around oil. Oil brings food to our stores, comprises the fibers in our carpets and makes the plastic in our DVDs. With demand so high it’s no wonder attention has turned to supply, with some advocating the U.S. lift the ban against drilling for oil off its coasts. Is offshore oil drilling a golden opportunity, or would it only create a tidal wave of disaster?
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All Leases are not Equal
- From Kenneth B Medlock III
By Kenneth B. Medlock III - Fellow in Energy Studies
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New Crude Unlikely to be Exported
graemeCR said: "Oil is a global commodity which is sold on the open market to the highest bidder. Do you really believe that any oil found in, on or under U.S. land or the OCS will be for the exclusive use of the U.S.?"
New oil production found in the US offshore wil simkly displace the equivalent volume of current US imports. The US imports 2/3 of the crude oil it consumes; it would make no sense to export oil from California or Florida, for example, and then turn around and reimport it from somewhere else. Another way of looking at this i to ask yourself, if you were a refiner in Maaysia, why would you want to pay the extra tariff for California oil? Wouldn't it be cheaper for you to buy it from a closer source?
But anyway we only need to look at the historical record to see that these assumptions are valid. If you go to the Einrgy Infomration Administration website ( http://tonto.eia.doe.gov/dnav/pet/pet_move_wkly_dc_NUS-Z00_mbblpd_w.htm ), you can find US crude oil export data. You will see that the US currently exports about 25,000 barrels of oil per day (all to Canada), but has been producing about 5,100,000 barrels per day (except recently due to hurricane Ike). That's a 0.5% export ratio. Furthermore, US crude exports have held at this level since about 2002. From 1991 through 2001, crude exports averaged about 1.5% of domestic production.
How many new barrels of oil do you think the US industry has brought onstream since 2002? Since 1991? Almost none of it has been exported, and none at all from the offshore Gulf of Mexico, where a fairly large percentage of new US oil has been found.
When the data is examined critically, this popular assumption is proven to be wrong.
- hitac
September 27, 2008 10:32AM
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