Oil Imports Plummet
Energy and Capital's Weekend Edition
Domestic oil production is at a fifteen-year high.
Foreign oil imports are down.
The U.S. has announced production records at two of its major shale deposits this month.
Is it possible we're finally on track for that elusive thing we call energy independence?
Let's back up and look at the numbers...
The EIA announced last week domestic oilfield production hit a high not seen since 1997: an average 6.509 million barrels per day.
On top of that, foreign oil imports fell to 7.55 million barrels per day — a drop of 2.25 million bpd.
Foreign oil imports have, for the most part, been declining year over year for a while now...
In 2006, we imported an average of 13.7 million bpd; by 2009 that figure had dropped to 11.69 million bpd; and last year we imported 11.5 million bpd. For the first six months of this year, average daily imports were at 10.86 million.
Last week's plummet was a sharp one.
As it turns out, domestic oil stockpiles dropped alongside imports (from 2.45 million barrels to 365.18 million barrels).
All of this sent the price of oil futures on the New York Mercantile Exchange below $90 a barrel...
But interestingly enough, demand has slowed.
What does it all mean?
Well, for one thing, it means we aren't as close to achieving energy independence as those numbers might have you believe. The drop in imports was deceptive because it was supplemented with a drop in the inventories.
But it also means we can cut back imports without being in any immediate danger, since demand dropped while domestic production increased.
Earlier this month, North Dakota announced its Bakken Shale Formation hit a new high for oil production. Wells pumped 609,580 barrels per day — up from 598,510 the previous month and a mere 360,820 the year before.
Roughly a week later, the Texas Railroad Commission announced the Eagle Ford Shale hit its own record in July, pumping out 310,370 barrels per day. A year ago the Eagle Ford was only pumping 120,532 barrels.
In the first half of 2012 the EIA reported the United States had already met 83% of its energy needs — and should this pace last through the end of the year, we will be at our most self-sufficient level in 19 years.
What do we make of this mixed bag of data?
Demand and prices are dropping, but so are imports — while domestic production continues to climb.
Domestic energy independence certainly isn't just around the corner. I'd say it was bad news, but there's just no way to ignore the potential...
A steady uptick in domestic production is here and growing as drillers in the Bakken allow us to continue to wean ourselves from foreign oil.
Add to that new and improved enhanced oil recovery technologies that can get us there even faster, as they provide oil producers methods to access oil left in wells after initial recovery.
We can't expect our domestic oil addiction, which has been slowly declining in the past years, to suddenly plummet. It just doesn't work that way.
But we can get those drops to be a little bigger each year.
We just have to rely on the technology at our disposal — and make the most of it.
Energy & Capital's modern energy guru, Brianna digs deep into the industry with accurate and insightful updates into the biggest energy companies and events. She stays up to date with the latest market moves and industry finds, bringing readers a unique view of current energy trends. For more on Brianna, see her editor's page.
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