Monday, February 25, 2013

Obama policies: cut off Gulf of Mexico production; kill the Keystone pipeline

US oil imports from Middle East increase

The US was more reliant on the Middle East for its oil imports last year, underscoring the critical importance of the politically unstable region for the country despite the growing energy independence its shale gas revolution is bringing.
That domestic production boom has triggered intense debate over whether the US would still guard the world’s critical sea lanes, such as the Strait of Hormuz in two decades’ time – or whether China, whose dependence on Middle Eastern crude imports is rapidly rising, would replace it.

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However, recent oil import trends from the Gulf region suggest why the US might continue to play a critical security role in the region. While domestic production increased the most in 150 years last year, Washington will confirm later this week that oil imports from the Gulf region continued to rise.
By the end of November the US had already imported more than 450m barrels of crude from Saudi Arabia, more than it imported from Riyadh in the whole of 2009, 2010 or 2011, according to figures from the US energy department. For the first time since 2003, Saudi imports accounted for more than 15 per cent of total US oil imports. The Gulf as a whole accounted for more than 25 per cent, a nine-year high.
Other Gulf exporters are also seeing unusually strong US demand. By the end of November, Kuwait had shipped more oil to the US than in any year since 1998. Analysts are expecting annual figures to be released later this week to confirm the trend seen up to November.
New extraction techniques – most notably hydraulic fracturing, or fracking, and horizontal drilling – have unlocked huge hydrocarbon resources in the US previously thought unrecoverable, raising expectations that over time US dependence on Middle East oil will drop.
These developments triggered debate about the long-term commitment of Washington to security in the Gulf, where the US Fifth Fleet has operated since 1995.
At an oil industry conference in London last week, Christof Rühl, chief economist at BP, raised the prospect of a US president, “15 years from now, seeing a problem in the Middle East and saying: ‘That’s no skin off my nose. I need very little oil and . . . I get it from Canada and Mexico.”
But at another conference earlier this year, Carlos Pasqual, co-ordinator for international energy affairs at the US state department, highlighted that oil was a global fungible commodity, saying Washington would remain involved in Middle Eastern oil security. “When there is instability or insecurity in any part of the world, it drives up the global prices of those commodities.”
Oil produced in shale fields like the Bakken in North Dakota and the Eagle Ford in Texas is of a light high-quality variety. But Gulf oil is still vital for the US because many US refineries are set up to process heavier crude oils. So while imports of light crudes from countries such as Nigeria have fallen dramatically, demand for Gulf crudes has not.
An expansion of the Motiva refinery in Texas has provided a fillip to US demand for Saudi oil. Motiva, which is now the largest refinery in the US by capacity, is jointly owned by Royal Dutch Shell and the Saudi national oil company, Saudi Aramco.
Part of Motiva’s expanded plant was temporarily shut down for repairs in the second half of 2012, but is expected to restart imminently.
Although oil imports from the Middle East have been rising, overall US demand for crude oil has declined slightly since 2004 because of a combination of efficiency measures, increasing use of natural gas and the financial crisis.
Imports of Saudi oil were equal to 9.3 per cent of all crude processed by US refineries in the year to November, while imports from the Gulf were equal to more than 14 per cent of the total. Both percentages were the highest since 2008.

"Democrats have a commonsense plan to help bring down skyrocketing gas prices..."

-- Nancy Pelosi, August 24, 2006 (it's still on her website!)

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