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United States as energy exporter: Is it “fake news”?

United States as energy exporter: Is it “fake news”?

Much of the media coverage of the American energy industry implies that America has become a vast and growing exporter of energy to the rest of the world and that this has created a sort of “energy dominance” for the country on the world stage.

Whether such reports qualify as so-called “fake news” depends very much on three things: 1) How one defines “fake news,” 2) whether writers of such reports qualify the words “imports” and “exports” with the word “net” and 3) which energy sources they are discussing.

In this case let’s define “fake news” as claims that official, publicly available statistics show plainly to be false. By that criterion anyone who claims that the United States is a net energy exporter would certainly be guilty of propagating “fake news.”

Energy statistics from the U.S. Energy Information Administration (EIA) show that in November 2017 (the most recent month for which figures are available) the United States had net imports 329.5 trillion BTUs of energy in all its forms.* That’s down from a peak of 2.74 quadrillion BTUs in August 2006, something that is certainly a turnabout from the previous trend. But all claims that the United States is a net energy exporter must be labeled as unequivocally false.

It turns out, however, that most people making misleading claims about America’s energy situation don’t actually say or write things which are technically false. What they do is use language which intentionally or unintentionally misleads the reader or listener.

For example, the claim that the United States is an exporter of crude oil is true. But that claim is entirely misleading. While the United States exports about 1.5 million barrels a day (mbpd) of crude oil, it also imports 7.5 mbpd.

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U.S. SHALE OIL PRODUCTION UPDATE: Financial Carnage Continues To Gut Industry

U.S. SHALE OIL PRODUCTION UPDATE: Financial Carnage Continues To Gut Industry

As the Mainstream media reports about the next phase of the glorious U.S. Shale Oil Revolution, the financial carnage continues to gut the industry deep down inside the entrails of its horizontal laterals.  The stench of fracking fluid must be driving shale oil advocates utterly insane as they are no longer able to see the financial wreckage taking place in these companies quarterly reports.

This weekend, one of my readers sent me the following Bloomberg 45 minute TV special titled, The Next Shale Revolution.  If you are in need of a good laugh, I highly recommend watching part of the video.  At the beginning of the video, it starts off with President Trump stating that the U.S. has become an energy exporter for the first time ever.  Trump goes on to say, “that powered by new innovation and technology, we are now on the cusp of a new energy revolution.”  While I have to applaud Trump’s efforts for putting out some positive and reassuring news, I wonder who is providing him with terribly inaccurate energy information.

I would kindly like to remind the reader; the United States is still a NET IMPORTER of oil.  We still import nearly six million barrels of oil per day, but we export some finished products and a percentage of our shale oil production.  Thus, we still import a net of approximately three million barrels per day of oil.

A few minutes into the Bloomberg video, both Pioneer Resources Chairman, Scott Sheffield, and Continental Resources CEO, Harold Hamm, explain how advanced technology will revolutionize the shale oil industry and bring down costs.  I find that statement quite hilarious as Continental Resources and Pioneer continue to spend more money drilling for oil and gas then they make from their operations.

…click on the above link to read the rest of the article…

Australia more vulnerable than ever to fuel import disruptions

Australia more vulnerable than ever to fuel import disruptions

This is because after the closure of 3 oil refineries in Sydney and Brisbane fuel imports have skyrocketed and these additional imports come from and pass through an area where there are high tensions now: the South China Sea and Korea.

Vinson10

Fig 1: USS Carl Vinson

10/4/2017 A US Navy strike group including a nuclear-powered aircraft carrier has moved into a strategic position in the Western Pacific Ocean, just off the Korean peninsula.
http://www.abc.net.au/pm/content/2016/s4651328.htm

Apr 13 2017 U.S. May Launch Strike If North Korea Reaches For Nuclear Trigger
http://www.nbcnews.com/news/world/u-s-may-launch-strike-if-north-korea-reaches-nuclear-n746366

Asian oil supply context

This comes at a time when Asian oil production is on an oil production plateau for 5 years now while oil demand seems to increase forever.

Asia_oil_production_consumption_2005-2015_fill_in-2035

Fig 2: Asia’s oil consumption growth is unsustainable

Asian_refinery_capacities_1965-2015

Fig 3: Stellar growth in Asian refinery capacities

Note that growth in the last 15 years has come only from 3 countries: China, India and South Korea. Singapore’s refining capacity and that of Indonesia, Malaysia, Thailand and Taiwan is basically flat. Japan’s capacity is in decline.

Most of Asia’s oil imports come from the Middle East as this tanker map shows:

Tanker_traffic_ME-Asia_Apr2017
Fig 4: Tanker traffic between the Middle East and Asia
https://www.marinetraffic.com/en/ais/home/centerx:119/centery:-2/zoom:3

Australia net oil importer

Australia_oil_production_vs_consumption_1965-2015Fig 5: Australian oil balance

Australia_crude_condensate_production_1990-Dec2017

Fig 6: Australian oil production decline

Australian crude oil imports

Australian_crude_oil_imports_by_country_2004_Jan2017

Fig 7: Australian crude oil imports

Fig 7 shows:

  • Crude imports from neighbouring Asian countries peaked 12/2007
  • Imports from Vietnam declined dramatically to 2% of imports because Vietnam’s crude production peaked in 2004-05
  • UAE is the only long-term supplier from Middle East (19% of imports)
  • Decline from Asia was compensated by imports from West Africa – good job
  • Crude imports declined from 550 kb/d to around 350 kb/d as Australian refineries closed
  • Before the refinery closures the diversity of crude imports was quite high and – given Australia’s remoteness on the global oil trade map – these refineries did a good job in sourcing crude oil from far away like Russia, Azerbaijan, the Mediterranean and West Africa

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