Category: Crude OIl Imports

The United States has a huge appetite for oil, wherever it comes from. The figures presented below come from the US Energy Information Administration website and are up to date only through the year 2006.

I want to especially direct your attention to the final EIA paragraph. Instead of falling as predicted by the EIA US dependence upon foreign oil has increased from 60% in 2006 to almost 70% today. Furthermore, the EIA was only predicting moderate prices increases for oil. Obviously, as in keeping with the rest of the Bush administration agencies, the EIA was wearing a set of rose colored glasses.

The scary thing about such huge misses in estimates is that one can assume that any forward planning that is conducted by the US government is being conducted using similar invalid assumptions and projections. No wonder the US is falling behind countries that maintain specialized professionals in their governments. The US practice of placing political operators and hacks into important positions as a reward for loyal political service, such as ambassadors and heads of important agencies, rather than competent professionals in their fields, is costing us dearly.

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From the EIA:

The United States consumed 20.7 million barrels per day (MMbd) of petroleum products during 2006 making us the world’s largest oil consumer. The United States was third in crude oil production at 5.1 MMbd. In addition to crude oil, significant contributions to U.S. petroleum supplies came from natural gas plant liquids, refinery gain, and alcohol fuels. However, we still needed 13.7 MMbd of imported crude oil and petroleum products to meet U.S. demand. The United States also exported 1.3 MMbd of crude oil and petroleum products during 2006, so our net imports (imports minus exports) equaled 12.4 MMbd.

T. Boone Pickens is a legendary American Oil man and investor who reached the billionaire stage long ago. Mr. Pickens knows a thing or two about oil drilling, energy management, and America’s dependence upon foreign oil.

In a recent interview with CNN’s Lou Dobbs, Pickens had this to say about the sad state of America’s current energy position.

“The problem is unbelievable for this country. We are in a crisis mode and let me give it to you right quick. We’re spending $700 billion a year on foreign oil, $700 billion. We’re going to break the country in less than 10 years and we’re now importing almost 70 percent of all the oil we use.

1991 it was 42 percent. And I said then, we’re going to be 60 percent at the end of the century. We were at 60 percent — I was told I was a fool. I didn’t know what I was talking about. I can tell you now, you’re almost 70 and you’re going to be importing in 10 years from now. So we’ve got to do something about it and we can, Lou. The solution for it is natural gas. Natural gas can replace foreign oil.

There are 8 million vehicles around the world on natural gas and only 142,000 of them are in the United States. Can you believe, I mean, with our leadership, did not take us in the right direction. But not trying to place blame, it’s really our problem. Yours, mine, and the rest of the people in America.”

Canada is consistently the top supplier of oil imports to the United States. Fortunately for the US relationships between Canada and the US remain generally good and Canadian oil imports can be considered as stable.

According to the Oil and Gas Journal (OGJ), Canada had 179 billion barrels of proven oil reserves as of January 2008, second only to Saudi Arabia. By far the bulk of these reserves (over 95 percent) are oil sands deposits in Alberta, which are much more difficult and expensive to extract and process than conventional crude oil. Canada is a net exporter of oil, with 2007 net exports of 1.0 million bbl/d.

At a price of $130 a barrel a 1.0 million bbl/d level of exports means that $130 million dollars a day is flowing into Canada with most of the funds being paid by the US. Almost all of the countries exports flow to the United States, and it is consistently the top supplier of U.S. oil imports.

Canada’s total oil production (including all liquids) was 3.36 million bbl/d in 2007. The country’s oil production has steadily increased as new oil sands and offshore projects have come on stream to replace aging fields in the western province. Overall, EIA predicts that oil sands production will increase even further in coming years and more than offset the decline in Canada’s conventional crude oil production. High oil prices above $100 a barrel will assure that oil sands production increases.

According to the May 2008 Short Term Energy Outlook, EIA expects that Canadian oil production will increase to 3.42 million bbl/d in 2008 and 3.59 million bbl/d in 2009. Canada consumed an estimated 2.34 million bbl/d of oil in 2007. The country sends over 99 percent of its oil exports to the U.S.