Where was the analysis?
The following was posted on “The Bottom Line on msnbc.com” which was restating a report from a USA Today article. The web page states that it covers “Breaking news and analysis of the economy, the business world, stocks, autos, real estate and consumer issues.” Really?
In role reversal, US on track to be an oil exporter
By msnbc.com staff
“The contentious debate in Congress over the Keystone XL pipeline obscures one significant detail many Americans don’t realize: In the first three quarters of 2011, we exported more oil than we imported. This means it’s highly likely that this year will be the first time in more than six decades that the United States will be a net exporter of petroleum products, according to a report in USA Today Monday.”
Well the staff of msnbc.com needs to review the meaning of the word analysis because they didn’t do any. They don’t understand the difference between crude oil and refined petroleum products and more importantly have no idea of U.S. crude oil import levels.
The reality is the U.S. still imports about 50% of its petroleum. The EIA makes it very clear the U.S. is a long way from being a crude oil exporter. “In 2010, the U.S. produced about 5.5 million barrels of crude oil per day and imported about 9.2 million barrels per day.” That is right, if the U.S. doubled its crude oil production it would still need to import over 3.7 million barrels per day of crude oil to meet demand.
It is important to differentiate crude oil which is refined into transport fuels from other petroleum liquids, which are used in the petrochemical industry and included in reports of U.S. petroleum consumption. These different petroleum liquids are not all equal and definitely not hot swappable like the USB memory stick on your computer. Propane and butane don’t refine into gasoline or diesel.
The fact that the U.S. refines a portion of its domestic crude oil production and imported crude oil (About 62% of the crude oil processed in U.S. refineries was imported) into product and then exports it to countries without adequate refining capacity does not make the U.S. a net exporter of crude oil.
If the msnbc.com staff had actually done some analysis they would have found that the reason the U.S. is now exporting product isn’t quite as favorable an indicator after all. What this really means is that we have more crude oil refinery capacity than we need to satisfy domestic demand. In part this is due to the impact of the long tail of the recession on industrial demand and because foreigners are both willing and able to outbid American consumers!
If the U.S. is on track to be an oil exporter it going to be a very long track indeed.