Do Americans have great business sense?
Then it is unlikely that we’ll pass up the opportunity to export energy for profit — and consequently, we’ll boost our wind generating capacities, geothermal power generation, and step in to retake the lead in solar cell development and production, won’t we?
Here is a story I’ll bet you missed last spring — I missed it, too; from the Daily Ticker:
Just as the average price for gas is set to hit $4 a gallon this week, the U.S. Energy Information Administration reports February was the third month out of four that the U.S. — the world’s most energy-hungry nation — actually exported more oil that it imported.
Despite the notion that the U.S. is currently hugely reliant on foreign oil, the country sold 34,000 more barrels of petroleum products a day than it imported in November 2010. And, in both December and February, the U.S. sold 54,000 more barrels a day. Net imports have not been negative for nearly two decades.
Part of this has to do with weak U.S. demand in recent years due to the recession. The other part rests on the growing demand in our own backyard for not only crude oil, but refined oil as well.
Mexico, Latin America and even OPEC member Ecuador are some of the U.S.’s top customers for fuel products, namely refined oil. Rising demand in these countries far outpaces their capacity to refine crude oil into petroleum products like gasoline or diesel fuel.
But, as Dan points out in the accompanying clip, this is not the only news item that hints at this country’s ability to export energy to the rest of the world.
Yesterday, Arch Coal announced a $3.4 billion all-cash deal to buy its competitor International Coal Group. The transaction would make the newly formed company the second-largest U.S. supplier of metallurgical coal, which is the coal used to make steel.
And because of growing demand in places like India and China, where coal is used for electricity, the U.S. has started to export more at higher prices than in previous years.
Then there’s natural gas. U.S. reserves of natural gas have also grown considerably in the last decade to record levels. A new report by the Potential Gas Committee suggests that in the last two years, potential U.S. natural gas supplies have increased by 3 percent. Two years ago, however, the group reported that supplies jumped 36 percent.
The U.S. does not currently export liquefied natural gas, but that time may soon be on the horizon.
Of course the U.S. is not about to join OPEC. But this news, quietly sneaking up on us as it did, should change the nature of the discussions about our energy future, and the direction, too.
In the first place, energy substitution — wind and geothermal for coal and oil, for example — becomes an issue of generating revenue, rather than just saving imports. If we can get power from the wind for free and sell coal to others for profit as a result, we get wins for U.S. citizenry and big wins for U.S. industry.
I haven’t seen much discussion of the topic. Stephen Leahy wrote an opinion piece for Common Dreams suggesting that oil companies have a political stake in keeping this news quiet, in order to get greater advantage for themselves, especially in electoral politics.
The only reason U.S. citizens may be forced to endure a risky, Canadian-owned oil pipeline called Keystone XL is so oil companies with billion-dollar profits can get the dirty oil from Canada’s tar sands down to the Gulf of Mexico to export to Europe, Latin America or Asia, according to a new report by Oil Change International released Wednesday.
“Keystone XL will not lessen U.S. dependence on foreign oil, but rather transport Canadian oil to American refineries for export to overseas markets,” concludes the report, titled “Exporting Energy Security”.
Little of the 700,000 to 800,000 barrels of tar sands oil pumped through the 2,400-kilometre, seven-billion-dollar Keystone XL will end up in U.S. gas tanks because the refineries on the Gulf Coast are all about expanding export markets. One huge refinery operator called Valero has been touting the potential export revenues of tar sands oil to investors, the report found.
In 1941, the U.S. was the largest oil-producing and oil-exporting nation in the world. When we cut off oil to Japan, Japan determined to attack the U.S. to try to get energy superiority in the Pacific, and our nation was pulled into World War II.
Is it possible we can avoid future energy wars, and change the game with our energy exporting capabilities over the next decade? What do you think? Does this change any game, and how does it change things?
Watch those exports.