Home Page - Gulf in the Media
HomePoliticsEconomy                               Set Gulfinthemedia.com as home page
Opinions
"Postings of opinions published in the Gulf and international newspapers
 Print  Send This Page
Save Listen to this Article
Energy Independence in America: Capabilities and Implications   

Al Hayat - 07 May, 2012
Author: Walid Khadduri

Recently, there have been many articles and forecasts in specialized American publications on the possibility of the United States achieving ‘energy independence’ over the next decade, starting in 2020 – four decades after President Richard Nixon announced the program for ‘Energy Independence’ to reduce U.S. reliance on foreign oil, and subsequently relieve pressures on U.S. international policies.

In an article in the Wall Street Journal, American energy expert Edward Morse states that the United States has become the fastest-growing oil and gas producer in the world, and that it is likely to remain so for the rest of this decade and into the 2020s, thanks to the start of production of shale oil and gas, in additional to conventional oil. Add to this output the oil sands production in Canada, and a likely reversal of Mexico's laws to curb the recent production decline – and the subsequent possibility of seeing exports to the United States rising. In numbers and figures, these developments mean that total oil production from the three countries in North America could rise by 11.2 million barrels/day of crude oil by 2020, or to 26.6 million barrels/day from around 15.4 million at in 2011. Furthermore, natural gas production in the United States and Canada could rise to 22 billion cubic feet/day by 2020. In fact, shale gas production accounts for a third of U.S. output of natural gas.

Based on these forecasts, Morse claims that North America is becoming the new Middle East. However, he at the same time admits that reaching output rates as such faces many hurdles, including the increasing influence of environmental groups, and pressures in Canada to impede the construction of export pipelines to the United States (with a view to retain oil in Canada and use it there instead of exporting it), as well as the fact that the bid to increase Mexican production may ‘trip over’ the Mexican Constitution, which restricts the operations of foreign companies and their investments.

Morse expects that by 2020, crude oil prices will be in the range of $ 85 per barrel, compared to their current price range of $ 120-128. This means a real GDP growth in America of about 2 to 3.3 percent, or savings of about $ 370 to 624 billion by 2020. These savings are supposed to be the result of the increase in hydrocarbon production, employment and significant improvement in the balance of payments.

Many American researchers assume that energy independence in America is the path to fostering prosperity and national security. Yet this is a very optimistic assumption, as it overlooks the challenges and realities in the markets. While it is presumed that reducing oil imports will mean that the U.S. economy can be isolated from fluctuations in the international oil market, this is in fact doubtful, as evidenced by Britain’s recent experience – wherein Britain has relied since 1980 on oil extracted from its waters in the North Sea, and despite this, local fuel prices rose and impacted the economy, especially in 2007, when prices rose by more than $ 66 per barrel in the course of one year.

As is known, oil prices are determined in the global market, and it is difficult for any entity to be isolated from these oil prices. Of course, local fuel prices vary from country to country, due to the differences in taxes levied on fuels, or otherwise subsidies provided by the government of certain nations. Such are the dynamics of oil markets.

There is a lot of posturing in the United States around presidential elections, regarding the so-called ‘blackmail’ by the oil-exporting countries of U.S. foreign policymaking. However, the truth is that America imports crude oil from more than 30 different countries. This policy has been in place for years and changes very slightly from year to year. For instance, U.S. imports of crude oil in 2007 were broken down as follows: Canada – 18 percent, Mexico - 11 percent, Saudi Arabia - 11 percent, Venezuela - 10 percent, Nigeria - 8 percent, Algeria -5 percent, Iraq - 4 percent, Angola - 4 percent, Russia - 3 percent, United Kingdom - 2 percent, Kuwait - 1 percent, Qatar - 1 percent, UAE -1 percent and 23 percent from other countries. So the truth is that when the United States defends the stability of oil supplies in international markets, it would be projecting its massive military might to defend both its interests and the interest of stability of international markets, and thus reasserting its global influence and hegemony. Moreover, the United States imports a small percentage of oil from the Arab Gulf countries, one that does not exceed 18 percent of its overall imports, more than half of which is from Saudi Arabia. What matters to Washington here hence is not its markets losing supplies or not, as much as emphasizing its role in securing global oil supplies, and subsequently, emphasizing the influence it gains as a result of this production and its effect in curbing oil price rises.

No doubt, the fact that the three Northern American countries may achieve their oil ambitions by 2020, if we assume that the path to that will be straightforward without the usual known hurdles, will mean that the United States may reduce the proportion of its crude oil imports to 40 percent of its consumption by 2020, and even 20 percent if Canada is excluded. Yet at the same time, we must take into account that such a major shift in U.S. policy will mean that the world will come to rely more on oil, and for a longer period of time.

U.S. reliance on its local oil will engender a major shift in the international oil markets. To be sure, the U.S. accounts for about one quarter of global oil consumption. However, and more importantly, the U.S. may become an oil-exporting country, as this is happening today with its gas industry. If that happens, then it could be said that the oil industry has created a new and important twist, both at the economic and political levels.

* Mr. Khadduri is a consultant for MEES Oil & Gas (MeesEnergy)
 
Western liberations grotesque experiments
Source : The Peninsula  
Date : 2014-08-01
Author :
Libya was sold as a glorious, liberating war. London's Tory mayor Boris Johnson wrote in March 2011 that the overthrow of dictator Muammar Gaddafi was "of course… a good idea"....
A threat to Islamic civilisation
Source : Gulf Today  
Date : 2014-08-01
Author : Michael Jansen
While Israel was blasting Gaza last week, killing hundreds of Palestinians, destroying their homes and levelling the strip's mosques, schools, and public buildings, I was sitting in a boardroom in...
Saudi students abroad: Eid tasteless away from families
Source : Saudi Gazette  
Date : 2014-08-01
Author : Muhammad Al-Farshouti and Ali Budair
A number of male and female Saudi students abroad said Eid overseas without the family and relatives is tasteless. They said they are compelled to spend the Eid feast away...
It is time to fight extremism
Source : Arab News  
Date : 2014-08-01
Author : Sabria S. Jawhar
For many Saudis the idea of extremism in Saudi Arabia disappeared when the Ministry of Interior crushed Al-Qaeda nearly a decade ago. We have a tendency to rationalize that extremist...
Middle East's cycle of violence
Source : Arab News  
Date : 2014-08-01
Author : Christopher R Hill
In a region where crises seem to be the norm, the Middle East's latest cycle of violence suggests that something bigger is afoot: the beginning of the dissolution of the...
Israeli impunity and global helplessness
Source : Arab News  
Date : 2014-08-01
Author : K.P. Fabian
It IS difficult, almost impossible, to envisage an early negotiated cease-fire to put an end to the unconscionable carnage in Gaza. US Secretary of State John Kerry has been working...
Israel unbound in today's Middle East
Source : Al Arabiya TV  
Date : 2014-07-31
Author : Joyce Karam
Amidst unprecedented regional turmoil, inter-Arab disputes and a sharp decline in U.S. influence, Israel seems to be acting with little to no restraint in the Middle East. In both war...
ISIS violations are an Islamic responsibility
Source : Asharq Al-Awsat  
Date : 2014-07-31
Author : Eyad Abu Shakra
This year's International Religious Freedom Report was prepared by the US government prior to the tragedy in Mosul, where Christians were forced to flee their homes. However, the report stated...
Islamic Self-Delusion
Source : Asharq Al-Awsat  
Date : 2014-07-31
Author : Yousef Al-Dayni
I was recently speaking with a well-known "moderate" Islamist figure about the Islamic State of Iraq and Syria (ISIS) and how this terrorist group has managed to defame the true...
How to promote business growth and safeguard consumers' welfare
Source : Saudi Gazette  
Date : 2014-07-31
Author : Moehammad Amar Ma'ruf
As the non-profit organizations which facilitate the needs of business stakeholders, coordinate with government authorities as well as guard the national policy on economic development, the role of economic development...
Palestinians need more negotiators, not arms
Source : Asharq Al-Awsat  
Date : 2014-07-30
Author : Camelia Entekhabi-Fard
Not long ago, perhaps less than a decade ago, I was one of those Iranians who viewed the Palestinians as terrorists and opportunists. As somebody who was born and raised...
A Carousel of Crises
Source : Asharq Al-Awsat  
Date : 2014-07-30
Author : Ali Ibrahim
Crises in the region have been proliferating and competing with one another since 2011, so much so that global media attention is changing on a weekly basis. While one crisis...
Taxis make a killing on Eid day, go slow on Tuesday
Source : Gulf Today  
Date : 2014-07-30
Author : Matovu Abdallah Twaha
It was all beaming for Hassan Kimoolo on Eid day prompting him to state, "The passengers were after us," but on the following day, "we are after them."...
The children of Auschwitz and Dachau have learned their lessons well
Source : Saudi Gazette  
Date : 2014-07-30
Author : Tariq A. Al-Maeena
After a month of fasting, all Muslims look forward to Eid which signifies the breaking of the fast. It is a time to cheer and indulge in what was...
A Meaningless Distinction
Source : Asharq Al-Awsat  
Date : 2014-07-29
Author : Diana Mukkaled
The Lebanese army has insisted on limiting its comments on reports about the decision by one of its soldiers to leave his post and join the Al-Nusra Front. It said...
Total 200 Results in 14 Pages
1 
For more news, views and reports about this topic, please subscribe
to GRC website: www.grc.net
Fri Aug 1, 2014| 04-شوال-1435هـ
Iraq Shia militias make Sunni hit lists
Mideast fund managers bullish on Saudi equities
US bomber in Syria came home before attack: NYT
Dubai Financial Market returns strong from the holidays
Yemen repatriates 8 Saudi Al-Qaeda suspects
GCC lighting market to grow 10% a year through 2018
Arab summit into bloodbath urged
Limited risk to health of well-capitalised Qatar banks, says EIU
Makkah governor orders confiscation of fake Qur'an copies 
Study: Yemen's support for oil derivatives exceeds health, education spending
Islamic State orders total cover-up for women
Qatar's 'water security project' deal signed
PROs in the UAE clueless on new visa rules
Delhi confirms Saudi ban on import of Indian pepper 
IS militants clash with Arabs, Kurds
KSE witnessed 3 slow major waves in Q1 in 2014
    Newspaper Editorials
Brutality in Gaza
Opportunities galore in Indo-US relations
More>>  
    Opinions
It is time to fight extremism
Middle East's cycle of violence
More>>  
    GCC Press Agencies
Day's main stories from the GCC Press Agencies
    Reports
Iraq Crisis and U.S. Policy
Iraq's Jihadi Jack-in-the-Box
More>>  
    Bank Reports
GCC Markets Performance – May 2014
Saudi Arabia: Baseline Macroeconomic Forecast 2014-16
More>>  
    GRC Analysis
Saudi-Vietnam Relations
Saudi-Philippines Relations
Enhancing Saudi-Japan Relations
    GRC Commentary
On Relations between Rulers and Citizens: The Need for a New Social/Political Contract in the GCC States
Key Issue Facing the Saudi Ruling House.
    GRC Book Review
Beyond Regionalism? Regional Cooperation, Regionalism and Regionalization in the Middle East
India, GCC and the Global Energy Regime: Exploring Interdependence and Outlook for Collaboration.
    GRC Press Release
Gulf Research Center press releases to the media
    GRC Publications
The Middle East and North Africa: Change and Upheaval 2014
The Legal Framework of the Sponsorship Systems of Qatar, Saudi Arabia and Kuwait: A Comparative Examination
In Search of Stability: Saudi Arabia and the Arab Spring
    GRC Newsletters/Bulletins

Enter your email to get the Newsletter
Go
      
Privacy Policy | Contact Us | Terms & Conditions | About Us |
Weather | Qibla Directions | Hijri Date Conversion Tool
Full Page :total time:0  |   04-- 04 Middle Page :0  --   | Right : 04 - 04--en--sess-enreq-en-coming