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Dec 31

Oil Independence and Domestic Resources

Energy independence is always a popular political topic. Much of the United States’ fear about energy dependence is derived from past oil crises in the 1960s and 1970s. The images of never-ending lines at gas stations remained burned into many people’s memory.

It’s important to remember that the petroleum industry is a highly complex, globally interconnected market. Sources of crude oil are constantly changing as new fields are discovered and old ones are either expanded or shuttered. Proponents of the Hubbert Peak Oil theory like to mention that oil, as a finite, nonrenewable resource, will some day run out. While that’s undoubtedly true, new extraction techniques are pushing that date out further from original estimates.

 

Where Does US Oil Come From?

While most political pundits would automatically assume the majority of our crude oil supply comes from the Middle East, that is not the case. In order to get a better understanding of the US supply picture for crude oil, it’s easier to break things into geographic regions. The US is divided into five Petroleum Administration for Defense Districts or PADDs. PADD V covers the West Coast, PADD IV the Rocky Mountain Region, PADD III the Gulf Coast to Alabama, PADD II the Midwest, and PADD I the East Coast.

PADD I derives most of their oil from Nigeria and Angola. PADD II and IV import the majority of their crude oil from our neighbor to the North, Canada. PADD III uses the many ports along the gulf coast to import crude from the Middle East, as well as South and Central America, and Africa. PADD V gets a relatively balanced mix of oil from Canada, the Middle East, and Alaska. I can say from personal experience that many of the oil refineries in California are engineered specifically to run Alaskan North Slope (ANS) crude.

On a larger level, the US net imported roughly 7.4 million barrels per day in 2012 from approximately 80 countries. Net imports accounted for 40% of petroleum consumption in the US, which according to the Energy Information Administration is the “lowest annual average since 1991.” The countries that import the most crude oil into the US are Canada, Saudi Arabia, Mexico, Venezuela, and Russia. The EIA further predicts that US oil imports will shrink to roughly 6 million barrels per day by 2014 as production spikes in places like Texas and North Dakota displace foreign supplies.

It’s also important to note that many refineries in the Midwest (PADD II) have spent millions of dollars upgrading their facilities to accommodate “heavier” crudes from Canada. And if the proposed Keystone XL pipeline connecting Texas with the oil rich tar sands of Canada is completed, it will further supplant imports.

 

The Future

Unfortunately, when it comes to crude oil, it’s often difficult to have your cake and eat it too. There are certainly domestic resources to tap into should we wish to further decrease our imports of foreign oil, but those resources often compromise the environment. For example, many politicians have proposed drilling into the Arctic National Wildlife Reserve, which would devastate the local ecosystem. What’s more, many towns in close proximity to “fracking” operations have discovered unforeseen consequences, including contaminated groundwater.

 

This article was contributed by Amanda Nies, organic gardener and locally-sourced consumer. If you are interested in offshore accommodations for projects like domestic drilling, Amanda suggests Gulfland Structures.

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