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)
 
Peshmerga, YPS and ISIS in Kobane as Turkey maintains stance
Source : Al Arabiya TV  
Date : 2014-10-25
Author : Ceylan Ozbudak
Not a day passes in my ever-tumultuous Middle East without "breaking news." First it was announced that President Obama called President Erdogan concerning Kobane. Then we heard that the United...
The Zombies of ISIS
Source : Asharq Al-Awsat  
Date : 2014-10-25
Author : Mshari Al-Zaydi
A Canadian national named Michael Zahaf-Bibeau, aged 32, made the headlines this week when he carried out a terrorist attack in Ottawa, killing one soldier standing guard at a war...
GCC 'immune' to Yemeni virus
Source : Arab Times  
Date : 2014-10-25
Author : Ahmed Al-Jarallah
Yemen — which resembles the new Somalia — is torn apart by Houthi terrorism. It is gasping for breath as it continues to sink deeper into the sea of its...
How many pilgrims performed Haj?
Source : Saudi Gazette  
Date : 2014-10-25
Author : Hammad Al-Salimi
I was with some Muslim friends in an Islamic country monitoring a number of Arab TV satellite channels which were transmitting live the movements of pilgrims between Makkah, Mina,...
When will Saudi women be allowed in sports stadiums?
Source : Saudi Gazette  
Date : 2014-10-25
Author : Muwaffaq Al-Nuwaisser
Newspapers and electronic news websites highlighted the statement of the official spokesman of the Saudi Football Federation, Adnan Al-Moaibed, who declared that when local clubs participate in the Asian Football...
Kobani and Turkey in cross-hairs...
Source : Gulf Daily News  
Date : 2014-10-25
Author : Aylin Kocaman
Turkey, a member of Nato, has always been an ally of Nato countries, but at the same time a target. Turkey has never been able to fit in with Nato's...
The 'politics' behind oil price fall
Source : Arab News  
Date : 2014-10-25
Author : Alsir Sidhamed
It is no longer a issue of whispering in the corridors of the oil industry. It is now part of public debate. Is Saudi Arabia launching an oil price war...
Behind Yemen's crises
Source : Arab News  
Date : 2014-10-25
Author : Abdul Rahman Al-Rashed
Years of knowing former Yemeni President Ali Abdullah Saleh has enabled this writer to better understand his tactics. One thing is for sure that Saleh is not credible and mainly...
The destructive ideology
Source : Arab News  
Date : 2014-10-25
Author : Kjell Anderson
Acts of great evil such as terrorism and genocide are so horrifying as to seem entirely incomprehensible. What kinds of people commit such acts? The answer to this question is...
The politics of acid attacks against Iranian women
Source : Al Arabiya TV  
Date : 2014-10-24
Author : Majid Rafizadeh
The unprecedented series of acid assaults against Iranian women in Iran's third-largest city, the traditional province of Esfahan, has taken the nation by surprise and has imposed a considerable amount...
A father stoning his daughter to death… ISIS's new trailer
Source : Al Arabiya TV  
Date : 2014-10-24
Author : Abdulrahman al-Rashed
Why was ISIS keen on promoting a video showing its fighters stoning a girl to death with the participation of her father? This video will remain one of the most...
To Defeat ISIS, Save Syria
Source : Asharq Al-Awsat  
Date : 2014-10-24
Author : Amir Taheri
Given the media's focus on the Islamic State of Iraq and Syria (ISIS), some "experts" claim that the crisis in Syria, now heading into its fourth year, has become a...
Will ISIS prolong Assad's rule?
Source : Asharq Al-Awsat  
Date : 2014-10-24
Author : Osman Mirghani
The welcome extended by Syrian state media to the US airstrikes on the Islamic State of Iraq and Syria (ISIS) and its subsequent remarks about Washington being in one trench...
A roadmap
Source : Arab Times  
Date : 2014-10-24
Author : Ahmed Al-Jarallah
Based on the principle, "Prevention is better than cure", HH the Crown Prince Sheikh Nawaf Al-Ahmad Al-Jaber Al-Sabah guided the National Security Council to areas where danger lurks; hence, the...
Branding services in Kuwait
Source : Kuwait Times  
Date : 2014-10-24
Author : Muna Al-Fuzai
The Kuwaiti market is small and extremely competitive. Success is possible, but only for those who know how to brand their products to survive and succeed. In Kuwait, most large...
Total 200 Results in 14 Pages
1 
For more news, views and reports about this topic, please subscribe
to GRC website: www.grc.net
Sat Oct 25, 2014| 01-محرم-1436هـ
US looking into possible chlorine gas attack in Iraq: Kerry
Saudi nonoil exports up 22% to SR18.5bn in August
GCC vows tough steps to curb 'media extremism'
UAE e-Commerce industry to hit $10 billion
Deviant ideology has no place in Islam: Al-Sudais
QAFCO to seek profit in niche fertilizer products
Masked men burn Saudi consulate cars in Egypt
886 ships anchored in Aden port during January – September
Yemen tribesmen blow up key oil pipeline
GCC keen on int'l oil markets' stability: CBK Governor
Qatar's re-election to HRC confirms global faith, says Minister
70% of Makkah Mashaer Metro staff are Saudi
3rd Parl't session to see more legislative achievements - Al-Ghanim
Iran implementing energy projects in Iraq worth over $1.3 billion
UAE committed to protecting rights of foreign workers
Abu Dhabi's biggest mall eyes Dubai, GCC patrons
    Newspaper Editorials
Tunisia hopes landmark elections will anchor stability
UAE will remain attractive place of opportunity
More>>  
    Opinions
Behind Yemen's crises
The destructive ideology
More>>  
    GCC Press Agencies
Day's main stories from the GCC Press Agencies
    Reports
Justice in Transition in Yemen
The United Arab Emirates (UAE): Issues for US Policy
More>>  
    Bank Reports
GCC Markets Performance – May 2014
Saudi Arabia: Baseline Macroeconomic Forecast 2014-16
More>>  
    GRC Analysis
Saudi Arabia and the ASEAN Periphery: Cambodia, Myanmar, and Brunei
NATO and the Future of Gulf Security.
Saudi-Vietnam Relations
    GRC Commentary
Price of not heeding Kingdom's advice
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
Labor Market Integration in the GCC Countries
Integration Processes in Latin America
GCC’s External Trade Integration: An Assessment
    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  |   57-- 57 Middle Page :0  --   | Right : 57 - 57--en--sess-enreq-en-coming