2011 December 2

The Master Resource Report  2011-12-02

AMR what a surprise?   (page 1 )

LED lights? (page 2 )

Remember Dec. 2008? (page 2 )

PIMCO V.P. gets Peak Oil   (page 3 )

Drill Baby Drill – We are!  We are!   (page 4 )

De-constructing the WSJ’s front page story, “U.S. nears milestone: net fuel exporter”

by Jeffrey J. Brown

On November 30, the front page of the Wall Street Journal carried what seemed to be a story “U.S. Nears Milestone: Net Fuel Exporter” by Liam Pleven and Russell Gold. It begins:

U.S. exports of gasoline, diesel and other oil-based fuels are soaring, putting the nation on track to be a net exporter of petroleum products in 2011 for the first time in 62 years.

A combination of booming demand from emerging markets and faltering domestic activity means the U.S. is exporting more fuel than it imports, upending the historical norm.

According to data released by the U.S. Energy Information Administration on Tuesday, the U.S. sent abroad 753.4 million barrels of everything from gasoline to jet fuel in the first nine months of this year, while it imported 689.4 million barrels.

For 2011, it appears that the US is on track to be net exporter of refined petroleum products, on the order of about 0.2 mbpd. Although the WSJ reporters did note, several paragraphs into the story, that the US remains the world’s largest net oil importer, in both terms of crude oil and total petroleum liquids, I suspect that many casual readers will conclude that the US is now a net oil exporter….… the WSJ reporters are taking a symptom of Peak Exports, i.e., declining US oil consumption, and presenting it as a positive story.

I had planned to cover this next week but Jeffrey beat me to the punch. Having already had a number of inquiries about the article I knew it deserved a response. Thanks Jeffrey, nice job.

Of course readers of this report have known about the net export issue of product from the U.S. for over two years now. Readers also know that diesel is especially impacted by export volumes and the resulting support it provides to domestic U.S. diesel prices.