US Energy independence is a Mirage
US Energy independence is a Mirage
New estimates from the International Energy Agency that the United States is headed rapidly toward energy independence are likely wishful thinking, according to experts.
The IEA predicted this month that the “extraordinary growth in Crude Oil and Nat Gas output in the United States will mean a change in global energy flows.”
The United States will become a net exporter of Nat Gas by Y 2020, and by Y 2035 North America is destined to emerge as a net oil exporter. The effect will mean that most Middle Eastern oil will be drawn to Asia by Y 2035, the IEA said.
Even if Canadian energy production is added to the equation to create broader North American energy independence, the outlook does not add up, according to the experts.
The IEA projected US Crude Oil production will increase to 10-M BPD and 11.1-M BPD in Y 2020 before slipping to 9.2-M BPD by Y 2035 according to the report.
A leading Crude Oil play analyst at research firm ITG, says it will not be possible for US output to be raised enough to meet US demand, which now stands at 19-M BPD, according to the data.
And, that Canada is unable to boost its production enough to fill the gap.
Canada might be exporting significant volumes of Crude Oil overseas by Y 2020, not necessarily keeping it within the North American market, and the result would be that some US refineries would still be relying on Crude Oil imports, which will likely be priced for international markets.
The IEA report relies incorrectly on current growth rates in shale Oil and Gas production to reach its positive conclusions. “New areas might need to be opened to achieve this i.e., offshore.
Even if the United States does becomes the worlds top energy producer, as the IEA projects, that does not mean the United States will produce enough to meet its own needs.
Increased U.S. production would have little impact on domestic pump prices because gasoline prices are influenced by international price movements.
The Atlantic predicted that while the United States might become the world’s top energy producer, it is unlikely to achieve energy independence. We can’t drill our way to Crude Oil independence. But by conserving our usage, we can insulate ourselves from rising gas prices,” The Atlantic said.
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Paul A. Ebeling, Jnr.
Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster’s Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.
Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.
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