America, The Energy Exporter
This opinion piece presents the opinions of the author.
It does not necessarily reflect the views of Rigzone.
Bolstering North American energy infrastructure will solidify the United States as an energy exporter by the end of this decade. It is time to start the conversation about changing U.S. laws to allow exporting of American crude oil.
U.S. Government estimates released this month show the United States producing 25 million barrels of oil equivalent a day of natural gas and oil in 2013 surpassing Russia which produces 22 million barrels a day. The U.S. already took the lead in natural gas production in 2012 passing Russia for the first time since 1982. The U.S. is leading because of development the Bakken in North Dakota and the Eagle Ford in Texas.
North American energy self-sufficiency is within reach, but only if advancements such as horizontal drilling are matched by improvements to North American energy infrastructure such as its pipeline, railway and seaborne transportation.
There are two obstacles keeping the U.S. from being a net-exporter of crude oil. First, is a lack of infrastructure, whether pipeline, railway or truck transport, in place to move crude into a position for export. Second, U.S. law limits the type of refined products such as diesel or jet fuel that can be exported. Let’s first look the infrastructure challenge.
The interstate highway system, built after WWII, became the infrastructure backbone the United States needed to grow into a bustling peacetime economy. Spurred by President Eisenhower, who as an Army Captain in 1919 participated in a sixty-two day cross-country convoy that took eighty military vehicles from Washington, D.C. to San Francisco via the best road the U.S. had, the Lincoln Highway. The trip was not an easy haul. Roads were unpaved turning into dustbowls in the heat or mud pits in the rain. Bridges were weak and there were no signs to mark the way.
The construction of the Eisenhower Interstate system catapulted the U.S. into a modern economy. Goods and supplies were easily transported from ports to the prairie, and back again. Reviewing today’s energy landscape you find a crude oil glut from a lack of pipeline infrastructure to move Alberta oil sands and Bakken crude to refineries on the Gulf Coast.
Completing the Keystone pipeline system, which would connect Alberta’s oil sands with Gulf Coast refineries, would import an additional 730,000 barrels of crude oil a day from Canada and 100,000 barrels a day from the Bakken formation in North Dakota. Keystone XL will help displace similar imports from Venezuela but would not be enough to flatten the demand for crude imports.
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