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The oil capital of the world? USA!

Apparently, we are poised to takeover the title of world’s largest producer of oil in 5 years and be a net exporter of oil by 2030 according the the International Energy Agency. Get ready to buy the F450 Pick-up! Well, maybe not. Oil is supposed to be about $125 per barrel in today’s money when we achieve energy independence. It’s a little over $85 today and I bought regular for $3.239 this morning. But at least the Chinese may be shipping money to us for a change. 2030 is a long way off, but this could be good news for us if it happens. Comments?

Jt…just an alternate point of view…

It does help the trade deficit. Maybe, just maybe most will get that the price of oil has less to do with how much we import then the collective greed of all the oil producers. If we thiink that oil will be cheap just because we build more pipelines to rush our oil and Canada’s oil to the refineries then to the rest of the world, we are deluded.

The biggest looser ? Our planet and it’s inhabitants. The news would be better if we developed as much energy from alternative sources…that didn’t pollute

Sweet crude is shipped offshore, and we import oil, go figure.

It does figure…China will be the largest importer of oil/gas, while we will start moving a little of our debt monies back home. I think our standard of living will improve for all…Let’s hope we still have a coast line to build our vacation homes on.

Hopefully it will be a wake up call for the arabs that have been doing nothing more with their money than building palaces for their own 1%. When the oil doesn’t work anymore what will they do with the sand? Guess you could get into glass manufacturing or something.

I think the price of oil and gasoline aren’t all that related to supply/demand economics. The price seems to be manipulated by those who own the oil drilling and distribution rights, both foreign and domestic. In the 1990’s oil was less than $10 a barrel. To explain almost $100 now, the supply would have to have severely dropped, or the demand increased severely. Neither has happened. I don’t think where the bulk of the oil comes from matters much as far as the price of gasoline in the USA is concerned.

Oil was less than $10 for a VERY short time. In fact, that was the lowest oil price in the last century, a record low. Here’s the history over the last several decades:

And world oil demand has EXPLODED, particularly in the developing world:

The best way to explain oil price today is the mc donalds index. The value of a dollar to buy oil changes in a futures market. The value of a big mac is not a futures issue but does say how many more dollars it takes to buy one. Thats inflation. Since inflation also affects the value of a dollar for trade we now have an 8$ big mac meal. Who here remembers a buck and a half big mac with soda and fries? That was when oil was $15- 18 a barrel. So oil is about 10% higher given inflation. The difference in US oil production is the cost of trade deficit. Really a knarly topic but it goes like this. Dollars that used to be given to others who trade with us stay home. The trade partners will need to ask others for dollars. The value on the trade market of a dollar goes up when we do not give as many away in trade like for fuel. This will not last long but beats the alternative. But this is too simple. @georgesanjose picked a really low number when that recession pushed oil down and China was using a fraction of what it does today. Not comperable due to China being a huge demand where it did not more than 20 years ago. Different times.

I forgot to make a very basic point - this huge upsurge in US oil production would not exist at $10/BO, $20/BO or $30/BO. Very little would occur even at $50/BO. These new wells are VERY expensive, $5-$10 million each, 10 times the cost of vertical wells.

The increase in US oil supply is very good news, especially for the US balance of payments, which is in a huge deficit position now. It is good news for most of the world, since it limits the upward move of the price of oil. When supply and demand are in balance, the oil price is the price of producing the most expensive oil; that would be about $90 or so under current technology. With inflation, that price will rise, of course in line with the cost of producing the most expensive barrel.

The only losers are countries who rely on oil income as their sole source of revenue. They should stop relying on automatic large increases and US military protection. They will also lose some of their political power.

As North America (US, Canada, Mexico) becomes energy self-sufficient, the huge military costs of “safeguarding” Middle East oil will allow the US to cut military spending and help balance the budget.

All the above events will help the value of the US dollar and US living standards.

Please not that the study does NOT forecast US oil self-sufficiency; it forecasts ENERGY self-sufficiency, which means the total heat value of oil, gas, coal will exceed what the country needs. The US is a very large coal exporter. Current US oil consumption is 20 million barrels or so per day, over 55% imported.; The increase forecast is 8 million making it about 17 million max, and by then total consumption will have increased due to population growth. The extra barrels needed can come from Canada through a reliable system of pipelines. The extra 8 million barrels per day translates into $245 billion dollars per year (at $85/barrel) that stay in the country.

In summary, the increased oil production in the US will help the dollar, trade balance, reduce the need for military expenses, and provide oil price STABILITY. It will not mean cheap oil and gasoline, since the new sources of oil are far from cheap to produce.

The oil resurgence has dramatically improved things around here. The unemployment rate is about 3% and the drilling of even one well creates a huge string of jobs related to it; and not just the drilling crews. Oil lease operators, lawyers, surveyors, chemical companies, geologists, wire line operators, equipment rental companies, and a host of others are in on it not to mention the number of jobs related to post-drilling with both oil and natural gas.
One local company had about 20 employees just a couple of years ago and according to the newspaper the other day they have about 500+ now.

I would HOPE by then that alternative energy would be found to heat our homes and drive our cars. I would HOPE the NEED for a non-renewable energy would be capable to supply us with MOST of our energy needs by then.

Here in the midwest, gasoline at Quicktrip is $299.9 as of Thursday Nov 15.

At a stable price of $125/barrel, it is likely that alternative energy sources will be attractive as well. They just won’t move vehicles around as easily as gasoline or diesel does. I imagine at that price, solar and wind will be quite feasible and will be supplemented by natural gas fired power plants when the wind and sun aren’t available.

Like I said earlier. It’s too bad that this type of economic growth is at the expense of our environment.

Here’s an article about plans to set up a LNG network for heavy trucking, probably the nearest-term option to gas/diesel:

I am old enough that I will not need to worry for myself, but I fear for my grand kids. What form of energy will they have and at what cost Who will profit for the sale?

We discussed the Pilot Flying J truck stops a couple of months ago. I think it makes sense if the public hopes to use diesel fuel. Going to NG will win for truckers in two ways. It is a fuel that most auto drivers won’t use and is also found in great abundance in the USA. That all translates to stable, low prices compared to gasoline and Darling Diesel.

“I am old enough that I will not need to worry for myself, but I fear for my grand kids. What form of energy will they have and at what cost Who will profit for the sale?”

The usual suspects will be available, but in different amounts compared to today. Expect to have oil, gasoline, diesel, natural gas, solar, and wind available. The folks that make money will be the ones that can find long term customers for their fuels at prices that give them a profit. Tune in 10 to 20 years from now to see how it shakes out. Who knows; there might be other energy sources that make economic sense then.

At the risk of bringing up contention over the issue, I’m not convinced at all now that wind power is curing anything. After watching the wind farm going in here all I can say is that the amount of oil, gasoline, diesel, and electrical power being used to construct, maintain, and keep those towers going along with countless peripheral issues is almost beyond comprehension.

A few years ago I was fairly supportive of wind power until I started to see what was involved in them.