America`s oil

[kir]

Conclusion From the a recent EIA report:




"The IEA in its World Energy Outlook 2012 is predicting that fossil fuels will dominate the energy sector through 2035 and that the United States will become the world`s largest oil producer by 2017, overtaking both Saudi Arabia and Russia. The IEA is not the only agency with this prediction; Citigroup Inc. indicated that the United States will achieve this goal before the end of this decade. The IEA also expects that the United States will become almost energy independent by 2035 and that OPEC will be exporting 90 percent of its oil to Asia, changing the security dynamics in the Middle East."



Surely , this can't be good for Alberta exports of oil to USA in the long term.

Is it possible that US can be the top producer by 2017 ? That's only 4 years away !





Kir.

 

[Thomas Beyer]

Why is this not good for Alberta ?



Oil will be consumed not matter where it is produced, and the US will continue to import it.



The biggest threat to Alberta comes from Canadians, i.e. BC opposition to a pipeline going west, which I expect will not be built, especially if an anti-business NDP government takes hold in BC in May 2013. But this threat is minor as there are other options:



I think Alberta will get 5 routes to get its oil out:

a) railway to Vancouver

b) railway to PG

c) pipeline to Eastern Canada - the reversed existing pipeline (see here: http://www.edmontonjournal.com/opinion/blogs/Converting+pipeline+feasible+TransCanada+says/7472054/story.html )

d) pipeline or railway to Churchill, MB

e) XL to US



Add'l commentary why this news is no news for Alberta: http://opinion.financialpost.com/2012/11/13/peter-foster-anti-markets-drivel/



Lots more shale gas and oil too in Alberta: http://ca.news.yahoo.com/alberta-huge-shale-oil-gas-resources-study-003840549--finance.html



Alberta boom is here to stay as long as mankind uses oil (or gas or coal or shale gas or shale oil, or beef or other agricultural products) .. so give or take another few centuries.

 

[bizaro86]

[quote user=kir]Surely , this can't be good for Alberta exports of oil to USA in the long term.

Is it possible that US can be the top producer by 2017 ? That's only 4 years away !


That's completely reasonable. You may not be familiar with their current production. According to the EIA, the US produced 9.688 million barrels of oil per day last year (mmboe/d). Russia was the number one producer with 10.54mmboe/d and Saudi Arabia produced 10.27 mmboe/d. By comparison, Canada produced less than 4 mmboe/d.



So the US would need to increase it's production by 850 thousand boe/d or 8.8%. They've increased their production more than that in the last 4 years, so there's nor reason to think it won't happen in the future. The US production was over 10 mmboe/d for much of this year.



People often don't understand that the world's economic superpowers (US and to a lesser extent China) produce huge amounts of oil. They also use huge amounts, so they have significant imports. The US was a huge oil exporter for decades, and while it may not become one again (and it's currently against the law to export US oil) they could certainly become the world's biggest producer and maybe even self sufficient.



None of this means they won't buy imports from Canada. They may continue to buy them at a discount and then sell refined products to Latin America at a profit, which is what they're doing now, but they'll keep buying it. We need pipelines that get our oil to tidewater. It doesn't especially matter which ocean (or the gulf of mexico) but it needs to be on a ship to get world prices, which would make a huge difference.



Regards,



Michael