The myth of US self-sufficiency in crude oil
Google for “US energy independence” and you will get 134k results, “US self sufficiency” yields 10k results. Here are some examples of what the media reports:
In Aljazeera’s Inside Story, 10/1/2016, titled “How much support will Saudi Arabia win against Iran?” the delicate relationship between the US, Saudi Arabia and Iran is discussed with 3 panellists. The moderator wanted answers in the context of “the US is almost at a tipping point, is almost energy independent..”
http://www.aljazeera.com/programmes/insidestory/2016/01/saudi-arabia-iran-160110170443000.html
https://www.youtube.com/watch?v=-xvjeUKpkP8 (18:45)
In the State of the Union Address 2014 Obama proudly announced: “Today, America is closer to energy independence than we’ve been in decades”. In the latest SOUA on 12th January 2016, we hear: “Meanwhile, we’ve cut our imports of foreign oil by nearly sixty percent”
On 16/1/2016, the 7pm news of Australia’s public broadcaster ABC TV had this snippet:
Let’s look at the data:
Crude imports
Fig 1: US crude oil production, imports and exports
The graph shows that crude production reached almost 9.5 mb/d in 2015, just short of the historic peak in 1970. But imports are still 7 mb/d. Exports were only around 500 kb/d (to Canada) due to an export ban (which was recently lifted). Let’s zoom into the period since 2007, the peak year of imports.
Fig 2: US crude production vs imports since 2007
We have several phases in this crude oil import history:
- 3 year decline of imports due to recession as oil prices went up, followed by the financial crisis
- A rebound when quantitative easing started
- A 2 mb/d decline 1 year after the shale oil boom started
In 2013 the growing production curve intersects with the declining import curve at around 7.5 mb/d i.e. a production/import ratio 50:50. Since then production grew another 2 mb/d but has peaked in April 2015 because of low oil prices which hit the shale oil industry. Imports did not continue to decline but remained basically flat.
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