U.S. ENERGY INDEPENDENCE?? Still Importing Nearly 8 Million Barrels Of Oil Per Day

How is the U.S. is becoming “Energy Independent,” if we are still importing almost 8 million barrels per day of oil??  While the Mainstream media and the Whitehouse continue with the energy independent mantra, the U.S. is still highly reliant upon a great deal of foreign oil.  And, why would the U.S. import 8 million barrels of oil per day if its shale oil production has surged over the past decade?

Well, it’s quite simple.  The U.S. Shale Oil Industry is producing way too much light tight oil, with a high API Gravity, for our refineries that are designed for a lower grade.  So, as U.S. shale oil production exploded, the industry was forced to export a great deal more of this light oil overseas.

Here is a chart of the different grades of U.S. crude oil and condensate production:

The figures in the table above are shown in thousand barrels per day.  The U.S. produced 483,000 barrels per day (bd) of heavy oil in April, 3.9 million barrels per day (mbd) of medium oil and 5.5 mbd of light oil and condensate.  Condensate’s API gravity usually is 50° or higher.  The 3,688,000 bd of 40°-45° crude is mostly shale light tight oil produced in the shale oil fields in North Dakota and Texas.

As I mentioned, the United States can’t be energy independent if it must rely upon 8 mbd of foreign oil supplies.  According to the charts from the CrudeOilPeak.info, the United States imported 7.8 mbd of oil over the past 12 months:

You will notice that most of our oil imports come from Canada (Dark Brown).  The reason for the growth in Canadian heavier oil imports (oil sands) is that it is used to blend with our shale light tight oil to make a more medium blend.  Thus, we need the heavier Canadian oil sands to blend with our lighter shale oil.  However, we still produce way too much light oil, so we are forced to export it overseas.

Matt, the author at CrudeOilPeak.inf, does a great job producing oil charts, and here is another below:

This chart shows the increase in U.S. oil exports.  As shale oil production increased significantly in 2017, so did our oil exports.  From the article, US crude oil imports and exports update April 2018 data:

The US had a crude oil export ban in place but Canada was exempted due to the integrated oil supply system. The export ban was lifted in January 2016 because US refiners could not absorb increasing quantities of tight oil (one reason why oil prices dropped).

In many countries extra light US shale oil is being used as a blending component, but not as bulk feedstock. Important volumes of US crude oil exports (which would matter on global oil markets) go only to a few countries.

No matter what clever US energy independence calculations are out there, the fact remains that the US is physically dependent on around 8 mb/d of crude oil imports, 4.3 mb/d out of which come from countries where oil production has already peaked and/or where there are socio- economic or geopolitical problems.  As of April 2018 US net crude imports were about 6 mb/d, far from oil independence.

Unfortunately, very light tight shale oil is not in big demand overseas.  Instead, our shale oil exports are used more as a blending component rather than a bulk feedstock.  So, the more shale oil we produce, the more we will be forced to export.

The United States will never become energy independent even if domestic shale oil production continues to surge higher.  However, I believe shale oil production in the states will likely start to decline within the next 1-3 years.  When the OVER-BLOATED and HIGHLY LEVERAGED stock markets begin to collapse, they will also take down the oil price.  A falling oil price will destroy the already weakened shale oil industry.

The Death of the U.S. Shale Oil Ponzi Scheme is approaching.  If you have not seen my video on the Shale Oil Ponzi, I highly recommend you watch the presentation below:

Lastly, I am still finishing up my next video on the BIG CHANGES IN THE GOLD MINING INDUSTRY.  Please look out for it to be released soon, and if you haven’t subscribed to my youtube channel, you can do so here: SRSrocco Report Youtube Channel.

HOW TO SUPPORT THE SRSROCCO REPORT SITE:

My goal is to reach 500 PATRON SUPPORTERS.  Currently, the SRSrocco Report has 191 Patrons!!   I would also like to thank those foundation supporters, who have chosen to become a member by making donations through PayPal to further the research and publishing work at the SRSrocco Report.

So please consider supporting my work on Patron by clicking the image below:

Or you can go to my new Membership page by clicking the image below:

Check back for new articles and updates at the SRSrocco Report.  You can also follow us on Twitter, Facebook, and Youtube below:

Enter your email address to receive updates each time we publish new content.

I hope that you find SRSroccoReport.com useful. Please, consider contributing to help the site remain public. All donations are processed 100% securely by PayPal. Thank you, Steve

37 Comments on "U.S. ENERGY INDEPENDENCE?? Still Importing Nearly 8 Million Barrels Of Oil Per Day"

  1. MASTERMIND | July 13, 2018 at 8:17 pm |

    Its misleading to claim that the US is dependent on 8 million barrels a day..The US imports 8 million barrels, but it doesn’t consume all of that oil..They refine most of it here and ship it back out..Also our net oil imports in April was only around 2.6 million barrels..Not 6 million as claimed in this article..

    https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=mttntus2&f=m

    • MASTERMIND,

      I am surprised by your comment. I gather you don’t understand that we need that oil because our refineries are designed for more heavier crude. Do you actually believe we should be important 8 mbd if we only need 2.6 mbd?? If we are exporting nearly 2 mbd of oil, why don’t we just keep what we are producing and not export that oil?

      Furthermore, a larger percentage of liquid oils production is Very Light Tight Oil and Condensate.

      steve

      • Your argument is a red herring..And our net oil imports are only around 2.6 million barrels in April..Which means we are around 85% of the way to oil independence.End of story..

        https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=mttntus2&f=m

        • MASTERMIND,

          For some odd reason, it seems as if you fail to understand that the U.S. cannot become energy independent with Light Tight Shale Oil. It is not a Bulk Feedstock, it is a more a Blending Component. Which is precisely why Congress elected to lift the ban on U.S. oil exports. We can’t use a lot of this shale oil that we produce.

          The Net Import numbers only tell part of the story. AND YES, that number has continued to decline. But, the U.S. Refineries are designed for heavier crudes and even with the blending of Canadian Oil Sands with U.S. light tight Shale oil is not an optimal blend. Trying to refine an average Oil Sands-Light Tight Oil blend is much more problematic, with a lot of technical issues, than just refining a medium blend oil.

          So it is not the END OF STORY. While we agree on many things, your insistence to only look at the Net Import figure has blinded you to the complicated technical issues of producing a great deal of Light Tight Oil.

          steve

  2. SteveR, too many technical terms that I am not familiar with. Do you mean that tight light oil is a low quality crude oil that is more expensive to process using American refineries and so they export it ?

    • Bukharin,

      A lot of U.S. shale oil is too light to provide the middle distillates such as Diesel and Jet Fuel. Shale Oil is wonderful for producing gasoline, but many countries need diesel and jet fuel. Thus, the reason why we are blending heavy Canadian Oil Sands with Light Tight Shale oil is to try and produce some of these middle distillates, but the refineries are dealing with major problems trying to process this blend.

      According to the article, THE DIRTY SECRET ABOUT OIL:

      That could present some problems for refiners, some analysts say. “The dirty secret of U.S. shale oil is not many people want it,” Bill Barnes of Pisgah Partners, an energy project development consultancy, told the FT. “It’s wrong to say the U.S. can add 1m-plus barrels a day of production capacity a year and it will immediately find a home in the world’s refining system.”

      Just because shale production is skyrocketing does not mean that refiners want the oil. Franco Magnani, the head of trading at Eni, told the FT that the company won’t rush out and by shale oil because its refineries were not made for that type of oil. “It could be a top-up in certain situations but not really a base diet [for Eni’s refineries],” Magnani told the FT. “[Shale’s] very light so either you have a refinery that’s geared towards that but maybe then it’s too light even for that. Or you use it only in very specific situations.”

      This is indeed the problem. Furthermore, as the U.S. shale oil fields are aging, they are adding more natural gas production and condensate and less oil production. As I have stated several times, the U.S. Shale Oil Industry will likely begin to disintegrate within the next 1-3 years.

      steve

      • Reluctant Motorist | July 14, 2018 at 8:44 am |

        Shale oil reminds me of fat-free yoghurt, which is not really tasty because there is no “there” there.

        • Reluctant Motorist,

          Agreed. Due to Tight Shale Oil being down 5,000-20,000 feet, the higher temperatures produce a lighter oil. Typical conventional oil wells and fields are much shallower at say 1,000-4,000 feet. And then we have the Oil Sands and heavy oil which are closer to the surface.

          In a recent study by Geo-scientists, they concluded the following about Deep & Ultra Deep oil wells:

          Pang et al. [6] found gas accounting for 42%, oil for 7%, and oil-gas for 51% in 1477 deep reservoirs all over the world. In comparison to middle and shallow reservoirs, there is more gas than oil in deep reservoirs. According to the traditional kerogen genesis theory, two points cause the increase of natural gas in deep reservoirs:

          (1)as buried depth increases, formation temperature increases, kerogen is in highly-over-mature stage, and kerogen-decomposing gas gradually domi-nates the resources;
          (2)liquid hydrocarbons generated in the middle and shallow reservoirs crack into natural gas at a high temperature and deep burial depth.

          So, by the U.S. shale oil industry being forced to drill 5,000-10,000 feet to access more oil reserves, they end up with a lighter oil due to the higher temperatures the further we go down in the earth’s crust.

          steve

      • Thank you for the explaination, SteveR. Now I know that it is a high quality oil. The fact that American refineries are not designed to process the light tight is a different problem.

        • Bukharin,

          I don’t know if I would label “Light Tight Shale Oil” as high quality. High-quality oil comes from drilling shallow wells that produce a great deal of medium grade oil at a very high EROI. While shale oil is not a nasty heavy duty crude oil, the Industry hasn’t made any money producing it over the past 10+ years.

          So, if we look at it in that vein, then no… shale oil is not high-quality.

          Lastly, most refineries are designed for medium grade oil. The two oil analysts I quoted in my comment stated the very same thing. It’s not just American refineries are not designed for Light Tight Oil, most refineries are not. It has to do with the inability of Light Tight Oil to provide middle distillates of Diesel and Jet fuels.

          steve

          • Reluctant Motorist | July 15, 2018 at 11:34 am |

            Orlov says diesel and jet fuel (middle distillates) is where oil cos earn $.

    • It will take 2,500 new wells a year just to sustain output of 1 million barrels a day in North Dakota’s Bakken shale, according to the Paris-based International Energy Agency. Iraq could do the same with 60 conventional wells. Ultra-light oil makes poor-quality gasoline that has to be put through an additional process (and cost) called catalytic reforming that boosts octane to sales specifications. And most crucial is that this light oil lacks the middle distillates needed to produce diesel and jet fuel. Those are the three biggest refined product markets so ultra-light oil has a lot going against it.

      Right now, the main approach is to blend the ultra-light with heavier grades of oil to create a mixture that can be put into refineries. This has created high demand for heavier oil (20-30 API gravity). The main sources for the U.S. are deep-water Gulf of Mexico, Mexico, Venezuela and Canada. Much of this heavy oil has problems of its own for refiners especially the syn-crude from Canada and Venezuela that contains large volumes of bitumen that requires a special kind of refinery (“cokers”) that can deal with the carbon and sell it as petroleum coke. Most of these refineries are in the Midwest (Chicago area mostly). The deep water GOM crude contains considerable sulphur that must be removed before refining further. As you can see, it is a complex problem. It reflects the fundamental premise of Peak Oil—namely, that we have run out of cheap oil.

      https://www.bloomberg.com/news/articles/2014-02-27/dream-of-u-s-oil-independence-slams-against-shale-costs
      https://imgur.com/a/t7ulB

  3. Good post Steve.

    The oil industry is a slow motion train wreck. Shale is the last death gasp. Tight oil can’t drive the primary transportation system that needs diesel, jet fuel, and bunker oil. When the shale Ponzi finally snaps we will see a price reversal of diesel gas spreads since gasoline will be produced at a huge net energy cost from cracking distillates.

    1-3 years is pretty generous they’re already talking about releasing 30mmb from the SPR. I like to know why they’re tapping the SPR if the US is so energy independent? Why not reduce exports? No buddy understands that shale is poo.

  4. Great analysis. I like your controversial energy articles and your charts are excellent. I’ll be pondering this information for a long time.

    I went to the EIA website and noted that in April the U.S. exported 3,691 kb/m of finished petroleum products. So, the U.S. imports a lot of crude oil that is refined and exported out to other nations. What this tells me is that the current petrol system is a global network of refiners, suppliers, transports forming a global petroleum matrix. We have a global petroleum system. For example should the U.S. stop refining oil and exporting finished products then the system would be stressed and could eventually fail. Should Saudi Arabia or Venezuela fail to export enough crude oil, then the system would be stressed and possibly fail. Even if a region were to be independent with crude and refining capacity, would they also be able to manufacture all the components and parts required to continue petroleum production, refining, and transport? What all this means is that the global energy matrix has built in resiliency, but should a major components fail then the entire matrix might collapse. IMO we are dependent on a very complex system that is showing stress in many different areas.

    • DisappearingCulture | July 14, 2018 at 1:42 pm |

      petedivine,
      Great comment!

    • petedivine, I’ve asked why US refiners not re-tooling for LTO to Exxon upstream research advisor. Says main issue are lower refining margins. Technically it won’t be a big challenge, from what I remember from organic chemistry class. Unless you want to make diesel out of it, which is much complex process.
      I wouldn’t be surprised if refiners also not rushing to retool because they do research and understandably concerned with sustainability of long-term production (20+ years for FID) on resource base declining at ~50%/year.
      Canadian and Venezuelan crude used to mix with LTO now.
      Check slide 5 here https://www.macrovoices.com/guest-content/list-guest-publications/1549-art-berman-chart-book-macrovoices-31-january-2018/file
      System is resilient, it will adapt – at a cost.

  5. Just drove through the Texas Panhandle and New Mexico seeing the endless wind turbines along I-40. I don’t know, it seems a good idea placing these things on farm land, hopefully supplementing the farmers (they need all the help they can get).
    But from reading articles here, is it true these monstrosities will never cover the energy used to construct and maintain these things?

  6. Stephen K. | July 14, 2018 at 7:02 pm |

    Steve, can you comment on the ownership of the refineries? I understand that the Saudis own the largest one in the U.S. Are “we” exporting refined products or are they, since the profits accrue to them? Also, I’ve often wondered if the light stuff we export to Canada is counted twice, once when we ship it and again as it comes back to us in the form of dilbit.

  7. Great article Steve. This could be why petrol has come back into fashion(pushed by government in uk at least) against diesel?

    • Robert,

      I would imagine so. You will notice that the U.K is receiving a good bit of crude oil from the United States, about 200,000 barrels per day.

      The United Kingdom’s total crude oil consumption is approximately 1.7 million barrels per day. With the U.S. supplying 200,000 bd, it is now 12% of their total consumption.

      steve

  8. seems to me that not only is the oilparty over, the whole energy party is over too. Thus the economic system is certain to be pulled down—but when you say that, it is important to emphasize what that means for the USA and the rest of the world

    nations cling to their fantasies about permanent growth—elected leaders promise it, voters vote for it—convinced that prosperity can be voted for

    no nation allows itself to crash through resource shortage if they have the means to fight to grab it from elsewhere—(as Germany and Japan in WW2) the USA will act no differently–oil can’t be replaced by anything else, yet the fantasy remains that it can

    when the realisation dawns that it can’t and the economic system is failing, all hell is going to break loose— already energy shortage is the underlying cause of the rise of fascism in the USA, and elsewhere. This can only get worse as energy shortages bite and blame has to be pinned on ”others” being responsible

    Any ”alternative facts” will be offered rather than the real facts, because they are unacceptable—”fake news”–in this case fake news will be easier to take for a whill until real disillusion sets in then things will get really nasty

    this goes a bit deeper into what our oil problem is really about

    https://medium.com/@End_of_More/the-oilparty-is-over-c06d3c723655

  9. What mr. St. Angelo explains here is the reason why peak Diesel is coming before peak Gasoline. The very light crudes produced by fracking are good to make gasoline or LPGs but are really useless to make diesel. Therefore the oil industry is in dire straits to produce diesel and a campaign against diesel engines has begun. It’s almost funny to see the european authorities suddenly discovering that diesel engines are very dirty and advising the citizens to buy gasoline cars. They had done the opposite in the 90s when they advised to buy diesel because of its higher efficiency. So now even some green groups are helping the oil industry in its crusade against diesel cars. The motto is: Diesel engines are destroying our lungs. To see the oil industry enjoying the help of green groups it’s one of the big ironies of our times.
    Needless to say in the USA you are not so reliant on diesels as here in Europe. So probably you are not going to suffer peak Diesel as much as we do. But I can imagine how many heavy equipment in the USA also runs on diesel so you are not going to escape its consequences. As diesel gets more and more expensive we are probably going to see huge strikes in the transport sector (something like what happened in Brasil) and we may end conceding that Alice Friedemann was completely right in her book.
    TO BE CONTINUED…

  10. I think mr. St. Angelo should dedicate one post to PEAK DIESEL. Maybe an interview with Alice Friedemann would also be nice.

    • Vitruvius,

      Doing a Peak Diesel article might be quite interesting.

      However, I don’t believe the U.S. shale oil industry will be around for long. There is information that I cannot share publicly yet, but the situation in the U.S. Shale Patch is much worse than the market realizes. So, again… I see the disintegration of the U.S. Shale Oil Industry to begin taking place within the next 1-3 years.

      steve

      • I hope you can publish this information as soon as possible.
        From you I have learned the dire situation of the fracking industry. But I don’t see how the fall of fracking is going to prevent or affect peak DIESEL. PEAK DIESEL is here and one only needs to hear the hysteria around diesel pollution to understand that in Europe governments are already trying to move their citizens away from diesel. Have they suddenly discovered the dangers of diesels ? No, of course not. They have discovered that offer is not going to satisfy demand and they probably think that trucks deserve diesel more than private cars. So now they are stigmatizing diesels as the worst polluters.
        More and more often I feel like I am being manipulated without pause by the media. Luckily I can come to sites like this to find some sanity.

        • Vitruvius,

          It seems as if the Diesel Peak will occur with or without Shale Oil.

          However, the notion that we can eliminate diesel fuel and switch to more gasoline engines due to a supposed new ROBUST supply of lighter shale oil in the future is PURE FOLLY because that supply will peak shortly as well.

          About the manipulation of the public by the Media, I believe most in the Media are IGNORANT and not doing it out of malice.

          THE BLIND CONTINUE TO LEAD THE BLIND.

          steve

          • I totally agree with you.
            About the media: we should never forget Hanlon’s razor. Having said this, it’s also true that the people fooling the media aren’t probably dumb. They are stigmatizing diesels instead of telling the truth about peak DIESEL because they want to protect their interests. How the oil industry creates this set against diesel engines I don’t know. Probably they speak with governments and tell them that something must be made. The Volkswagen scandal was very timely to discredit diesels.
            Anyway here we can get vaccinated against misinformation.

          • DisappearingCulture | July 15, 2018 at 1:02 pm |

            “About the manipulation of the public by the Media, I believe most in the Media are IGNORANT and not doing it out of malice.”

            The mainstream media is ignorant about almost ALL things they write or talk about. True investigative journalism is the exception rather than the rule. But this story…this would be shut down or off limits for the mainstream media. It doesn’t fit the narrative or agenda. The powers that be, the deep state, wants calm and complacency, not alarm.

    • DisappearingCulture | July 15, 2018 at 12:56 pm |

      “Needless to say in the USA you are not so reliant on diesels as here in Europe. So probably you are not going to suffer peak Diesel as much as we do.”

      Well the U.S. is a large landmass country, and the trucks and trains run on diesel.

      • Correct me if I am wrong but I think in the USA many trucks run on gasoline. While here in Europe almost all trucks run on diesel. So we have more reasons to be worried about peak diesel than yankees have.

  11. So…..Steve…… so, since the general consensus among a handful of pretty sharp Gold Peeps is that the battle Ground for Gold will be at the $1550 line….. Why was I shot down a week or so ago for saying I was thinking if Gold gets above $1375 it’d shoot straight to $1425 the very next day ‘n then the real fun would begin??

    • Ask Michael Kohlhaas. An overnight $200 rise wouldn’t surprise me.

      • Hold your gold (and silver) | July 16, 2018 at 4:39 pm |

        Don’t forget that a while ago they put in trading limits for gold and silver. From memory, gold has a temporary trading halt at $400, and silver at $4. Complete trading halt for the day for silver was $12, can’t remember for gold – was it $1200? (Notice a 10:1 ratio?)

        In any case, they have prepared in advance. Many don’t know about this, and of those who did know some may have forgotten by the time it actually happens.

  12. JT Roberts | July 15, 2018 at 9:42 am |

    https://mobile.twitter.com/Big_Orrin

    This thread has a lot of insight on how the system works.

  13. Steve,
    while your question is a very relevant one, and you are right in a literal sense, one has to underline, that three quarters of the imported 8 mn. barrels/day come from smaller and much weaker “neighbours” (Canada, Mexico, Venezuela).

    Most of it is heavy oil, which can be blended with LTO in US refineries (as you have outlined). So these delieveries are imports in a statistical sense only – at least in “my book”.

    It’s like counting Norwegian production as imports to the EU. De facto they should be counted as EU inhouse production.

    Your case for a swift peak and decline of US shale oil in other postings seems to be solid though. Regards, Andreas

Comments are closed.