
US Is Net Oil Exporter for First Time in 75 Years - tim333
https://www.bloomberg.com/news/articles/2018-12-06/u-s-becomes-a-net-oil-exporter-for-the-first-time-in-75-years
======
nicholas73
This news is based on one weekly oil inventory report, which fluctuates
greatly because of the timing of oil tankers coming in and out of ports. Each
VLCC can hold 2 million barrels of oil, so a timing mismatch can make the
report swing largely. I would bet next week the US is a net importer again.

That said, the US oil production grew incredibly this year. It will be a net
exporter again. In addition, the US has large refining capacity, so it gets to
export oil derived products which were counted towards the net (The actual
crude oil exports were still only half its imports).

~~~
cronix
And OPEC immediately counter-punched, lowering their output MORE than
anticipated. So really, it doesn't mean a damn thing. We will be paying the
same, or more, at the pumps. Trump had been asking them to keep it the same so
prices would lower with the new US production, but they voted against that,
with Saudi Arabia making the biggest cuts. Russia (not in OPEC) cut back as
well. So, it seems it's a net loss for the consumers, but great for oil
companies.

[https://www.nytimes.com/2018/12/07/business/energy-
environme...](https://www.nytimes.com/2018/12/07/business/energy-
environment/opec-russia-oil-prices-production.html)

~~~
iambateman
In practice our prices are down a good bit (20%?).

I paid $1.89 today in beautiful Columbia South Carolina.

~~~
Zhenya
Still damn near 4 dollars here in California.

~~~
jjeaff
In order to make gas legal to sell in CA, it requires a special formulation
and additives. Refineries have to be specially configured to produce it, so CA
will almost always be more due to the smaller amount of refinery capacity
dedicated to producing it. And that isn't even taking into account the various
CA taxes and fees on gas that add up to nearly 50 cents a gallon.

~~~
masonic
We end up with oxygenated gas that supposedly produces 10% lower emissions per
unit volume.

But it has 11-13% less energy per gallon, so one burns 11-13% more gallons to
travel the same distance.

------
alehul
Hearing "net exporter" made me wonder: is there some inefficiency, at a
company or state level, in how we'll both export and import the same
commodity? Why does this occur?

Is this the result of a lack of market makers who will hold the oil (maybe the
cost of storage is too high), so it's shipped to wherever needs it at that
exact point?

~~~
betterunix2
I am not an expert, but one factor might be that not all crude oil is the
same. Maybe refineries prefer to import a different kind of crude oil than
what is extracted domestically (and likewise refineries in other countries are
willing to buy the crude we are extracting here).

~~~
lukasm
I think this is correct. Weight and sulfur level matter. It requires slightly
different infrastructure. Also having import/export is strategic. If something
happens to your local producer you've got a backup.

------
mchannon
What is remarkable about the world map in this article is how many petrostates
buy our oil: UK and Norway, and the UAE(?!).

I get that there's probably been a fair bit of empty tanker capacity over the
past few decades going back the other way, but I wonder what's so special
about US oil that merits taking it all the way to the Persian Gulf. Surely our
military didn't need that much for its operations in the neighborhood?

~~~
aphextron
>I get that there's probably been a fair bit of empty tanker capacity over the
past few decades going back the other way, but I wonder what's so special
about US oil that merits taking it all the way to the Persian Gulf. Surely our
military didn't need that much for its operations in the neighborhood?

West Texas Intermediate is the lightest, sweetest crude on earth. Most
refineries are built to handle medium density/sulfur, so everyone else has to
buy it to mix with theirs.

[https://qph.fs.quoracdn.net/main-
qimg-1792854eec3801b00a6ba6...](https://qph.fs.quoracdn.net/main-
qimg-1792854eec3801b00a6ba68303695f41.webp)

[https://en.wikipedia.org/wiki/West_Texas_Intermediate](https://en.wikipedia.org/wiki/West_Texas_Intermediate)

~~~
mchannon
Fascinating, though the factoid about being the lightest and sweetest appears
to be a bit off the mark:

[https://rentar.com/best-crude-oil-world-crude-oils-better-
ot...](https://rentar.com/best-crude-oil-world-crude-oils-better-others/) (end
of the article)

~~~
aphextron
>Fascinating, though the factoid about being the lightest and sweetest appears
to be a bit off the mark: [https://rentar.com/best-crude-oil-world-crude-oils-
better-ot...](https://rentar.com/best-crude-oil-world-crude-oils-better-ot..).
(end of the article)

Malaysian Tapis is a small deposit used as a benchmark, but isn't traded
globally the way WTI is. As far as usable reserves go, WTI is still the best.

------
mrfusion
And things are about to get really crazy. We just discovered a new us reserve
with 46 billion barrels.

[https://wattsupwiththat.com/2018/12/07/peak-oil-postponed-
ag...](https://wattsupwiththat.com/2018/12/07/peak-oil-postponed-again-usgs-
identifies-largest-continuous-oil-and-gas-resource-potential-ever-and-its-in-
the-permian-basin/)

~~~
village-idiot
That’s terrible.

~~~
dahdum
It's good and bad, like it or not oil is required for our modern society, and
will be for a long time even as we transition away from it.

In the meantime, eliminating our energy dependence on autocratic nations is a
pretty big benefit. EU is so dependent on Russian gas they can't push back
against aggression.

~~~
antt
It's good and bad in the same way a crack head finding a suitcase filled with
crack is good and bad. In short it's catastrophic to anyone who cares about
tomorrow.

~~~
loeg
Oil has significantly more benefits for the US than crack has for anyone. It
certainly has its share of drawbacks, too, but it's not quite as simplistic as
that.

~~~
village-idiot
Oil also has significant more downside to all of humanity than crack does.

------
sheeshkebab
The current time is probably the worst in net amount of wasteful natural
resource consumption humans have taken part of. All this leads to is more
pointless burning of resources that will take 50 million years to regenerate,
saturation of atmosphere with gases that are nothing short of barbaric geo
engineering, and proliferation of pointless business (energy jobs) among
population that seems like is having hard time adjusting to a future where the
jobs are not going to be as necessary.

~~~
ryanwaggoner
To be fair, that's not _all_ it leads to. I'm _not_ saying that it was the
best way to do it, but the energy industry over the last ~150 years has driven
nearly unimaginable increases in human development, standard of living,
poverty reduction, and technology.

That said, in 2018 we have little excuse for our current track. We couldn't
have done solar or nuclear instead of oil 100 years ago, but we can today, and
the fact that we're not is shameful.

~~~
nicholas73
Solar or nuclear primarily generates electricity, which little oil is used
for. They also have problems with supply/demand load balancing, and there
isn't a good storage solution for that yet. Lastly, oil products have energy
density that batteries are barely starting to be capable of. Tesla is just
getting started, but the world will still need jet fuel.

~~~
bunnycorn
> oil products have energy density that batteries are barely starting to be
> capable of

Not even close, diesel/gasoline stores 35 MJ/l, a good battery (lithium-metal,
much better than lithium-ion), 4.32 MJ/l

Now, if only we could extract 90% of that diesel stored energy.

~~~
CydeWeys
If you can't actually extract it (because of limitations like Carnot
efficiency, etc.), does it actually count? What's the real figure for usable
energy in diesel?

~~~
leetcrew
diesel engines can exceed 45% efficiency [0], so lithium ion would have to
more than triple in energy density to be competitive (using GP's numbers).

that said, diesel is mainly used in large trucks and shipping vessels, where I
would imagine energy per unit volume would be more important than energy per
unit mass. if electricity were much cheaper than diesel fuel, it could
certainly become the economic choice for all but the longest routes.

[0]
[https://en.wikipedia.org/wiki/Diesel_engine#Major_advantages](https://en.wikipedia.org/wiki/Diesel_engine#Major_advantages)

~~~
erikpukinskis
Regenerative breaking could theoretically get you 2x.

~~~
CydeWeys
Regenerative braking gets you basically nothing on long steady-speed routes.
Energy leaves the system primarily through air resistance and to a lesser
degree mechanical and rolling resistance. Trucks crossing the country can go
60mph on cruise control for hours on end.

Regenerative braking helps more for stop-and-go driving in cities but it's
basically meaningless for long-haul trucking or shipping.

~~~
erikpukinskis
It also gets you something where there is altitude gain.

------
gniv
Note that this includes refined product, which is massive in the US. When I
first read this wikipedia page, it was a huge surprise how world-dominant the
industry got in the last 10 years:
[https://en.wikipedia.org/wiki/Petroleum_refining_in_the_Unit...](https://en.wikipedia.org/wiki/Petroleum_refining_in_the_United_States)

------
rb808
I don't like fracking but can see the political, economic and
(C02)environmental benefits. Puts me in an awkward position.

~~~
YPCrumble
What are the CO2 benefits of fracking?

~~~
yostrovs
Fracked gas has replaced conventional oil in the US as the default heating
fuel. This is the reason why America's carbon output is falling faster than
anywhere else on Earth.

~~~
hn_throwaway_99
Yes, but it's still highly likely that making a _huge_ source of carbon energy
in the ground economically viable will be a big net negative for climate
change in the future; I think the likeliest outcome is you've just delayed the
use of those other more polluting resources by some number of years.

Now, the delay could be a net good thing if it gives non-polluting sources
like solar, wind and nuclear more time to become cost competitive, but at the
end of the day fracking has enabled billions and billions of barrels of oil to
end up as CO2 in the air where previously it would have been left in the
ground.

~~~
rb808
Yeah you're probably correct. Also the extra gas supply has made oil and coal
cheaper which probably slows transition to cleaner energies.

~~~
yostrovs
It makes buying solar panels cheaper, installing them cheaper, and the
required batteries cheaper because the trucks that mine silicon use diesel and
the people working at the dollar panel factory get there by petrol.

------
gammateam
Nice! Cut off the weapon sales and Saudi has to just pump as much as possible

Puml themselves back into irrelevancy

Makes sense now

~~~
adventured
The US just enormously upgraded the size of its reserves sitting in Texas.[1]
There's probably $10 trillion worth of oil in just the greater Texas / New
Mexico Permian region.

How the US oil boom changes the US relationship (dependency) to the Middle
East and Saudi Arabia specifically, will be one of the more interesting
political dramas of the next ~20 years. It has already realistically killed
OPEC, leaving the US-Russia-Saudi group as the new core of the global oil
market. Forecasts are for the US to go on up to 15 to 18 million barrels per
day of production. The US self-interest may rapidly pivot from propping up
foreign producers to benefitting from their collapse as competitors. I'd
expect the crowd that believes US foreign policy revolves around oil, to
invert their story to be that the US actions are now about eliminating energy
competitors (eg Iran or Venezuela). If in the coming years the US actually
goes the direction of no longer guaranteeing security for eg The House of
Saud, I'd expect China to step in and play that role.

[1]
[https://www.dallasnews.com/business/energy/2018/12/07/usgs-p...](https://www.dallasnews.com/business/energy/2018/12/07/usgs-
permian-basins-vast-reserves-could-bigger-anyone-imagined)

~~~
loeg
> I'd expect the crowd that believes US foreign policy revolves around oil, to
> invert their story to be that the US actions are now about eliminating
> energy competitors (eg Iran or Venezuela).

How is that an inversion? If you start from the claim that foreign policy
revolves around oil and acknowledge the change from a net importer to a net
exporter, that would logically affect foreign policy.

~~~
adventured
It's an inversion because the premise has overwhelmingly been, for a long time
now, that the US invades _for_ positive oil supply (in one form or another).
It was nearly universally proclaimed by the anti-Iraq war crowd that the US
went into Iraq for their oil.

The inversion is that the US would be toppling nations in one form or another,
or simply not propping them up, to intentionally cause havoc to reduce oil
supply from competitors. It would be to harm the competing oil producers for
the benefit of US production.

------
thinkloop
If Canada's an exporter and the US is an exporter, who's importing, and does
this make the Canadian pipeline less valuable?

------
tom_
I'm a bit unsure where the headline comes from. The latest WPSR has net
imports of crude oil as 4,016kbpd...

~~~
peter303
Net export of products leads to a slight total surplus. This EIA has the gory
detail of contributing factorsin below link. Note third section for the botton
shows a net export surplus.

[https://www.eia.gov/todayinenergy/detail.php?id=35032](https://www.eia.gov/todayinenergy/detail.php?id=35032)

~~~
tom_
I assume a lot of the imports are then purchases from foreign exporters by
American refiners who have lined up foreign buyers of finished products? This
is economically valuable activity, but it doesn't feel like a good measure of
any kind of energy independence.

------
loeg
> toward what U.S. President Donald Trump has branded as "energy
> independence."

That seems unnecessarily charitable. I don't think this is a novel idea (in
2018), or one that can be credited to Trump in particular in any way.

Google trends puts the peak since 2004 (for the US) in 2008[0] — when US gas
prices were at a relative height[1] — and basically declining interest since,
as gas prices have fallen. But the concept long predates even that (initial
interest in the US probably largely driven the 1973 OPEC oil embargo).[2]

[0]:
[https://trends.google.com/trends/explore?date=all&geo=US&q=e...](https://trends.google.com/trends/explore?date=all&geo=US&q=energy%20independence)

[1]: [https://www.statista.com/statistics/204740/retail-price-
of-g...](https://www.statista.com/statistics/204740/retail-price-of-gasoline-
in-the-united-states-since-1990/)

[2]:
[https://en.wikipedia.org/wiki/United_States_energy_independe...](https://en.wikipedia.org/wiki/United_States_energy_independence)

~~~
Animats
Every president since the 1970s oil crisis has talked about energy
independence. Now we're there.

Now we can start to disengage from the Middle East and let them sink back into
the sand. That would save the US a trillion a year.

~~~
loeg
> Every president since the 1970s oil crisis has talked about energy
> independence. Now we're there.

Sure. This gradual trend has been a long time coming. I agree it's hugely
significant, but I object to the attribution to Trump in the opening paragraph
of the piece.

> Now we can start to disengage from the Middle East and let them sink back
> into the sand.

I agree there are huge benefits to the US in ceasing to fund the Saudis in
particular, and to a lesser degree, other members of OPEC. Re "disengage" in
particular, I don't think we should totally tear down diplomatic relations and
abandon foreign policy goals, though. Maybe that's not what you meant.

> That would save the US a trillion a year.

Where does this figure come from? What are you comparing? Our oil production
rate didn't change overnight and it seems unlikely that the difference from
yesterday amounts to $2.7 billion per day ($1T annualized).

~~~
thx11389793
The trillion/year I believe was in reference to military expenditures.

~~~
loeg
Are we comparing 2017 against 2018? Or 2017 against some hypothetical future
year where the military's energy use is completely free?

------
woodandsteel
And while Trump is working to boost US oil production, China is pushing like
crazy to get all of its road vehicles off of oil and onto electricity.

It's doing that to reduce the costs of importing oil, to reduce its
vulnerability to oil supply disruptions, to reduce its terrible problems with
air pollution, to counter global climate change, and to take over the world
automotive industry.

Who do you think is pursuing the wiser course?

------
EGreg
News about fossil fuel prices or about birth rates seem to get exactly the
opposite reaction at first blush than I think they should have.

A smaller population and sustainable practices mean we as a species may
actually avoid a catastrophe.

------
peter303
The US is also selling its Strategic Peroleum reserve at about a million
barrels (0.15%) a week. This is mandated by the Trump tax reform law to make
the federal deficit. This makes net imports appear smaller.

------
known
Dismantle OPEC and let them sell Oil in currencies of their choice instead of
[https://en.wikipedia.org/wiki/Petrocurrency](https://en.wikipedia.org/wiki/Petrocurrency)

------
drinkcrudeoil
[https://www.newyorker.com/cartoon/a16995](https://www.newyorker.com/cartoon/a16995)
I think it's worth to ponder on this picture

