American_Gas_2-2014

More advantages to growing U.S. oil production

I pointed out last month that U.S. crude oil production is way up in recent years, which continues to surprise a lot of people. This surge in domestic production, from America’s shale formations, offers profound economic and national security benefits.

Let me add another point that may help people understand this new era of energy abundance: This U.S. oil production increase represents by far the largest addition to world oil supplies over the last few years from any nation on the planet.

According to estimates from the Energy Information Administration (EIA) in its most recent Short-Term Energy Outlook:

EIA expects strong crude oil production growth, primarily concentrated in the Bakken, Eagle Ford, and Permian regions, continuing through 2015. Forecast production increases from an estimated 7.4 million bbl/d in 2013 to 8.4 million bbl/d in 2014 and 9.2 million bbl/d in 2015.

Crude_Oil_Growth_3-2014

As the nearby chart shows, this surging output contrasts strongly with many other oil-producing regions. EIA explains the dramatic drop in OPEC production in 2013 as cutting back to accommodate non-OPEC (read: U.S.) supply growth.

A new Time magazine feature, meanwhile, reinforces the national security advantages of our growing domestic energy production.

That piece focuses on a new report by several experts who know something about the intersection of energy supplies and our economic and national security – Bill Richardson, who served as both U.S. ambassador to the United Nations and as secretary of energy; John Warner, former Navy secretary as well as past chairman of the Senate Armed Services Committee; and Paula Dobriansky, former undersecretary of state for global affairs.

One key takeaway from their report is that energy exports are crucial to strengthening U.S. national security. They write: “Hoarding energy at home, neglecting bilateral relationships with major global energy players and forfeiting economic opportunities to export energy would leave the United States less secure.”


4 Comments

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  1. Ralph Short says:

    Just wanted to let you I completely agree with this blog entry. It seems to me if we only hoard for domestic use, given all the variables in usage, then we are shorting our growth prospects. If we export then the refineries can balance the usage domestically and internationally, and we therefore keep more people employed in productive jobs. That is just one positive. There are plenty others.

    Good article.

  2. jerry flores says:

    I would say I strongly disagree with this post concerning the export of crude. XXXon/Mobil is not concerned about the security of this country, they are concerned about profit for themselves, and their shareholders. Watch this scenario play out. We start shipping OUR crude to foreign countries. Now, all of a sudden, XXXon/Mobil “cant keep up with demand”. What happens in this situation? Price goes up. How does the promote our security? Do you think Iran is trying to get their exporting back on line to promote their country’s security? Hardly. They want the dollars. While XXXon/Mobil’s propaganda machine turns, please remember, your portfolios may be growing by leaps, and bounds, but you are paying for that daily. The rising cost of fuel, and everything fuel costs affect. And that would be EVERYTHING. Don’t be so naïve as to think XXXon/Mobil is out to protect your interest, and the security of this nation. XXXon/Mobil is out for one thing, and one thing alone.

    • Ken Cohen says:

      You raise a number of issues that can influence the global trade of oil and gasoline in commodity markets. Along those lines, you may be interested to read an issue brief published this week by Resources for the Future that looks at the interaction of many of these topics. It concludes “there are a number of issues to consider in whether or not the United States lifts its crude oil export ban, but any domestic gasoline price impacts are likely to be small, but beneficial to consumers.”

  3. jerry flores says:

    And when does this increased production mean lower fuel prices for American consumers, as was promised to us in that famous Drill Baby Drill speech?

  4. Ralph Short says:

    Just wanted to let you I completely agree with this blog entry. It seems to me if we only hoard for domestic use, given all the variables in usage, then we are shorting our growth prospects. If we export then the refineries can balance the usage domestically and internationally, and we therefore keep more people employed in productive jobs. That is just one positive. There are plenty others.

    Good article.

  5. jerry flores says:

    I would say I strongly disagree with this post concerning the export of crude. XXXon/Mobil is not concerned about the security of this country, they are concerned about profit for themselves, and their shareholders. Watch this scenario play out. We start shipping OUR crude to foreign countries. Now, all of a sudden, XXXon/Mobil “cant keep up with demand”. What happens in this situation? Price goes up. How does the promote our security? Do you think Iran is trying to get their exporting back on line to promote their country’s security? Hardly. They want the dollars. While XXXon/Mobil’s propaganda machine turns, please remember, your portfolios may be growing by leaps, and bounds, but you are paying for that daily. The rising cost of fuel, and everything fuel costs affect. And that would be EVERYTHING. Don’t be so naïve as to think XXXon/Mobil is out to protect your interest, and the security of this nation. XXXon/Mobil is out for one thing, and one thing alone.

    • Ken Cohen says:

      You raise a number of issues that can influence the global trade of oil and gasoline in commodity markets. Along those lines, you may be interested to read an issue brief published this week by Resources for the Future that looks at the interaction of many of these topics. It concludes “there are a number of issues to consider in whether or not the United States lifts its crude oil export ban, but any domestic gasoline price impacts are likely to be small, but beneficial to consumers.”

  6. jerry flores says:

    And when does this increased production mean lower fuel prices for American consumers, as was promised to us in that famous Drill Baby Drill speech?