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)
 
Jobless PhD holders
Source : Saudi Gazette  
Date : 2017-01-19
Author : Saeed Al-Seraihi
It is an absolute right, rather a duty, of Saudi universities, whether government or private, to attract highly qualified expatriates to become staff members to uplift their educational standards regardless...
Saudis are not racists
Source : Saudi Gazette  
Date : 2017-01-19
Author : Dr. Ali Al-Ghamdi
The title of this article is taken from a video posted by the well-known media figure Kamal Abdulqadir on his Twitter account. The video talks about the ferocious racist campaign...
Iran bids farewell to Obama with insults
Source : Arab News  
Date : 2017-01-19
Author : Abdulrahman al-Rashed
It is the story of the frog that carried the scorpion on its back to cross the water to the other bank. As soon as it arrived, the scorpion stung...
A dove in Davos? Calling Zarif's bluffs
Source : Arab News  
Date : 2017-01-19
Author : Faisal J. Abbas
One has to give it to Jawad Zarif. Not only can Iran's chief diplomat bluff, but - as attendees at the World Economic Forum (WEF) Annual Meeting found out -...
Saudi Arabia - the region's cornerstone of stability and security
Source : Arab News  
Date : 2017-01-19
Author : Dr. Hamdan Al-Shehri
Time after time, Saudi Arabia has called for conferences in order to exchange views, present proposals, set up centers and build alliances. These actions are taken in order to secure...
Welcome, Oman!
Source : Saudi Gazette  
Date : 2017-01-17
Author : Samar Al-Mogren
In view of my interest in journalism and culture, I closely follow the developments in the Arab World. But it is Oman that has drawn my attention the most. It...
The Saudi islands, Egypt and political 'fahlawa'
Source : Arab News  
Date : 2017-01-17
Author : Faisal J. Abbas
Pundits commenting on Saudi-Egyptian relations in light of the recent issue over the two islands of Tiran and Sanafir must remember that land disputes between neighboring countries are common; indeed,...
Gulf states are the Arab nation's backbone
Source : Arab News  
Date : 2017-01-17
Author : Khalaf Ahmed Al Habtoor
I cannot help thinking there is an architect with a plan to weaken Egypt and create distance between Egyptians and the peoples of the Arabian Gulf. I fear this plot...
Unemployed Saudi engineers
Source : Saudi Gazette  
Date : 2017-01-16
Author : Hala Al-Qahtani
A long time ago, a ministerial committee comprising representatives from the Ministries of Civil Service, Finance, Education, Defense, Municipal and Rural Affairs and the Saudi Council of Engineers was formed...
Strong action needed to prevent adhl
Source : Saudi Gazette  
Date : 2017-01-16
Author : Samar Al-Mogren
Many Saudi men have been doing injustice to their daughters by preventing them from getting married....
'Expatophobia'
Source : Saudi Gazette  
Date : 2017-01-16
Author : Mahmoud Ahmad
Last week, a shocking cartoon was published in a local Saudi daily targeting expatriate workers that sparked anger among many people, mainly expatriates working here in Saudi Arabia....
Davos has potential to be more than just hot air in a cold climate
Source : Arab News  
Date : 2017-01-16
Author : Frank Kane
Travelers from the Arabian Gulf to the World Economic Forum's (WEF) 47th annual meeting - which kicks off tomorrow in Davos, Switzerland - will experience a temperature swing of roughly...
Iran in Yemen: See no evil, hear no evil
Source : Arab News  
Date : 2017-01-16
Author : Baria Alamuddin
Western leaders have displayed astonishing unwillingness to acknowledge the evidence of their own intelligence agencies and militaries concerning Iranian interference in Yemen and the region....
Saudi Arabia's big debate on cinema, concerts
Source : Arab News  
Date : 2017-01-16
Author : Abdulrahman al-Rashed
Saudi Arabia's Grand Mufti Abdul Aziz Al-Asheikh has created a state of confusion after replying to a question on a TV program concerning the Kingdom's entertainment reforms....
Total 200 Results in 14 Pages
1 
For more news, views and reports about this topic, please subscribe
to GRC website: www.grc.net
Sun Jan 22, 2017| 23-ربيع ثاني-1438هـ
Iraqi forces to complete liberation of E. Mosul soon - Al-Abadi
Syria against Saudi Arabia, Qatar taking part at Astana talks
UAE Court sentences three to jail for terror acts
Bahrain King hails Egypt's pivotal role
Iran's Zarif sees possibility to work with KSA over Syria, Yemen
Kuwait 'well positioned' to ease lower oil impact
Martyrs role model of devotion: Mohamed
GCC braces for budgetary cuts
OIC to discuss Muslim Rohingya crisis in Myanmar
Nicaragua leader supports Qatar's Unesco candidate
UAE, New Zealand to strengthen economic ties
Shoura to study fees on expat remittances
Oman major boost to bilateral relations with Canada
Iran 'hostile' to US involvement in Syria talks
Kuwait MPs slam rising expat numbers, remittances
  Op-Ed
Emissions cheating: carmakers need to make radical changes
No end in sight to migrant woes
A dove in Davos? Calling Zarif's bluffs
Saudi Arabia - the region's cornerstone of stability and security
More>>  
    Reports
NBK Report on oil markets
GCC Banking Sector Quarterly - 2Q16
More>>  
    GCC Press Agencies
Day's main stories from the GCC Press Agencies
    GRC Analysis
The Benefits of NATO-GCC Strategic Ties
The GCC and the EU's New Global Strategy
For the GCC States, a different Europe to deal with
    GRC Commentary
Climate COP 22 in Marrakech Important for the Region
Earth Day 2016: The Promised Day
An Evolving Saudi-US Relationship
    GRC Press Release
Gulf Research Center press releases to the media
    GRC Publications
Sustainable Development Goals: Challenges and Opportunities for the GCC Countries
Salalah: The Economic Development and Spatial Fragmentation of a Globalized Port City in Southern Oman
Foreign Investments in the GCC and Investments of GCC Countries Abroad
    GRC Newsletters/Bulletins

Enter your email to get the Newsletter
Go
A Note on Syrian Refugees in the Gulf: Attempting to Assess Data and Policies
      
Privacy Policy | Contact Us | Terms & Conditions | About Us |
Weather | Qibla Directions | Hijri Date Conversion Tool
Full Page :total time:0  |   58-- 58 Middle Page :0  --   | Right : 58 - 58--en--sess-enreq-en-coming