62 years since this happened...

[iowa55]

U.S. is on pace to be a net exporter of petroleum products for the first time in 62 years, as domestic prices at the pump are at a record high for this time of year.


TO BORROW A PHRASE FROM ANOTHER SITE... "WE ARE SO SCREWED"

"drill baby drill" will not help us.

[iowa55]

For anyone bummed out about the United States' dependence on foreign oil, try this forecast on for size: The U.S. is on track to be a net exporter of petroleum products this year for the first time in 62 years -- and yet, domestic gas prices remain at or close to record highs for this time of year.

Data released last week by the U.S. Energy Information Administration shows that the U.S. sent abroad 753.4 million barrels of gasoline, diesel and other oil-based fuels in the first nine months of 2011, while taking in only 689.4 million barrels.

The reason? To put it simply, Americans are relying on less, while emerging markets are demanding more.

But so far, that decreased domestic demand hasn't translated into decreased domestic prices at the pump.

“Instead of that product backing up and depressing prices, it’s being sent to other countries,” Tom Kloza, chief oil analyst at the Oil Price Information Service, told the San Francisco Chronicle. “It’s good news for the refining industries and their workers and the balance of trade and U.S. jobs.”

Domestic prices at the pump are at record highs for this time of year, but are actually falling now that we've hit the holiday season. The average price of a gallon of gas is now at $3.27, according to AAA, down 11 cents from two weeks ago and down 20 cents since Halloween.

The economy plays a big role in the latest oil industry numbers. As the U.S. works to rebound from a deep recession, low economic output and high unemployment typically means low domestic demand for petroleum.

"We're not using as much," James Beck, an analyst at the EIA, told the Wall Street Journal. "Prior to 2008, basically anything we produced, we used."

And the high exporting rates are expected to continue into the foreseeable future, Dave Ernsberger, global director of oil at Platts, which tracks energy markets, told the Journal. "The conventional wisdom is that U.S. is this giant black hole sucking in energy from around the world. This changes that dynamic," he said.

The last time the U.S. exported more oil than it imported, in 1949, the country was still ramping up its economy after World War II. It became increasingly dependent on foreign oil, especially in the 1960s and 1970s.

[linsal]

Correct me if I'm wrong, but didn't Looter call this one a while back? That we would be exporting oil? That it would flow to countries who would use it more efficiently?

[glowplug]

posted at 5:40 pm on December 5, 2011 by Tina Korbe

As I reported last week, the U.S. has been on track to become a net exporter of petroleum products for the first time in 62 years — and, sure enough, the U.S. actually passed that important milestone this month. CNN Money reports:

The United States is awash in gasoline. So much so, in fact, that the country is exporting a record amount of it.
The country exported 430,000 more barrels of gasoline a day than it imported in September, according to the U.S. Energy Information Administration.
That is about twice the amount at the start of the year, and experts and industry insiders say the trend is here to stay.

But a tweet from trade lawyer Scott Lincicome redirected my attention to the very bottom of the CNN Money Article — to a couple of paragraphs that quote an oil analyst at the Oil Price Information Service. The analyst’s quotes are excellent — but the topic he’s addressing is ominous. The relevant portion:

Still, [analyst Tom Kloza] cautioned against restrictions on exports of diesel or gasoline, a move he expects politicians to at least talk about in 2012.

There’s nothing forcing oil companies to bring crude to the United States to refine, Kloza said, noting that the refining industry employs thousands of workers.

“If you restrict exports, you’d really be looking for trouble,” Kloza said. “You’d just see the refining and the jobs go offshore.”

I bring this up because, in response to my earlier post, a number of commenters complained about high gas prices — and understandably so. Demand for gasoline in the U.S. could hit the lowest level in a decade next year, yet U.S. consumers will likely still pay record-high prices for gas.

But any complaint consumers make to Washington about gas prices will be met with the sort of solution the federal government typically offers — more regulation. That, in turn, would lead to the typical wages of more regulation — in this case, the unintended consequence of lost jobs.

In fact, what we need is less government involvement in the energy sector. As I also wrote in my last post, to be a net exporter of petroleum products is not the same as to be energy independent. But energy independence would almost assuredly lower prices at the pump, as U.S. oil refining companies would no longer have to pay OPEC-manipulated prices for crude.
What will it take to be energy independent? Two ideas off the top of my head: Really reopen the Gulf to drilling with a streamlined permitting process and frack, baby, frack.

[iowa55]

The oil industry is no different than any other...if there is demand and a potential profit, go for it.

As mostly farmers on this site, how many are for keeping our oil home but for no restrictions on EXPORTING anything Ag related? It is the same thing. I am watching pasture/hay type land being raped raising corn and beans for export. Looter talks about peak oil, what about PEAK AG?

Looter did predict this but was not hard with the rig count and decreasing demand and increasing production. He also predicted $50 oil about now, but moved his target date to next summer. My guess is that it will have a 1 in front of the 50.

Embargo's and probation's lead to shortages...be careful what you wish for.

[jrtheoriginal]

YA know I thought it was kinda funny that the price of gas dropped over black friday but is now going back up. Obviously it was justa happen stance freak of the space time continuum that this happened! YEa right!

[glowplug]

Iowa55,

I believe that we should be marketing our grain through livestock and exporting meat. That way we retain much more of the nutrients by cycling the manure back onto crop land. But of course, we allowed foreign beef and pork imports to destroy price incentives to raise livestock here.

No, we should not be exporting oil. We should have lower cost energy here. USA was once an economic powerhouse in the 1950s-60s. We had a nationalistic orientation where America was placed first in our priorities. Sadly, we've been Euro-weenied.

[JoshuaGA]

Dec 6, 2011 9:04:44 GMT -5 glowplug said:

Iowa55,

I believe that we should be marketing our grain through livestock and exporting meat. That way we retain much more of the nutrients by cycling the manure back onto crop land. But of course, we allowed foreign beef and pork imports to destroy price incentives to raise livestock here.

No, we should not be exporting oil. We should have lower cost energy here. USA was once an economic powerhouse in the 1950s-60s. We had a nationalistic orientation where America was placed first in our priorities. Sadly, we've been Euro-weenied.

Glow, it is not the foriegn beef and pork and milk for that matter that are crippling us, it is regulations and government sticking their nose where it dont belong, and, IMO, the Tysons and Smithfields will have much to do with the demise as anyone.

[looter]

Dec 6, 2011 9:04:44 GMT -5 glowplug said:

Iowa55,

I believe that we should be marketing our grain through livestock and exporting meat. That way we retain much more of the nutrients by cycling the manure back onto crop land. But of course, we allowed foreign beef and pork imports to destroy price incentives to raise livestock here.

No, we should not be exporting oil. We should have lower cost energy here. USA was once an economic powerhouse in the 1950s-60s. We had a nationalistic orientation where America was placed first in our priorities. Sadly, we've been Euro-weenied.

You blast Carter for his embargo. Yet that's EXACTLY what you wanna do with petro? Double standard?

The USA is a net-exporter of meat. We earned those exports by producing it cheap enough.

Should the USA not export meat? Should the domestic beef producer get screwed over? Why the double standard?

[looter]

I don't think.... I absolutely KNOW the USA will be a net-exporter of oil, but it will likely take at least 5 years, and even that would be uber fast.

Thirsty and I surmised that the USA will lose 1 mbpd in net imports until we import no more petro. After that we will become net-exporters and that we go a little slower. We will export at max 2 of our present 5.5 mbpd of crude oil production. Maybe only 1 mbpd net export of petro, but it WILL happen. It HAS to. We are inefficient, we won't get efficient fast enough, and product always flows to the enduser adding the most value to it.

==============================


To put this in perspective, the USA imports around 8 mbpd of crude oil, and until recently we also imported gasoline/diesel.

If we continue to lose 1 mbpd of net imports per year of the crude/product combo then we have almost 8 years before we are net exporters of the crude/product combo.

Presently the USA produces about 5.5 mbpd of crude oil, with 55% of all the drilling rigs in the world.

WE STILL PRODUCE LESS CRUDE OIL TODAY THAN WE DID WHEN GEORGE W. BUSH ENTERED OFFICE.

A couple things are going to happen along the road to becoming a net exporter of liquid energy (as we already are of coal);

1) We will open all areas to drilling. When people work a month for a tank of gas, all enviro concerns will be gone.

2) We will end the oil subsidies. The gov't will simply be too broke to subsidize industry. Even with relaxed regs, lower nominal tax rates etc, the gifts from the treasury coming to an end will KILL a lot of projects dead.

#1 and #2 above will offset each other in terms of flow rates. Because we will tap the low-hanging fruit, we will need less rigs to produce the same oil. Without the Intangible Drilling Cost Tax Credit, the oil shale and the stripper well drilling is a non-starter. (Regardless of whether we have an EPA or not. That's how huge the IDC is)

An America consuming 5 mbpd of crude oil and another 2 mbpd of other liquid fuels is gonna look exactly like Mexico.

It's at most a decade away, and nothing or noone is going to stop it.