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Number of the Week: U.S. Producing More Oil Than It Imports
137,000: How many more barrels a day the U.S. produced than it imported in the week ending Nov. 8.
For the first time in nearly 20 years, the U.S. is producing more crude oil than it imports. But that doesn’t mean energy independence is right around the corner.
U.S. oil output is soaring due to the “fracking” boom in North Dakota, Texas and other areas. U.S. producers pumped 7.7 million barrels of crude per day in October, the Energy Information Administration said this week, up 11% from a year earlier and a whopping 63% over the past five years. The rise followed decades of declining production.
At the same time, domestic oil consumption, which had been rising for decades, has been basically flat for the past five years due to a weak economy, competition from biofuels and other factors. The government expects both trends to continue in the near future; the EIA estimates that 2014 crude production will average 8.5 million barrels per day in 2014, which would be the most since the mid-1980s, while demand is expected to be flat.
More domestic supply and less demand translates into less reliance on imports. The U.S. imported 7.6 million barrels a day of crude oil in October, the first time production has topped imports since February 1995. Net crude imports are down nearly 25% over the past five years.
Still, 7.6 million barrels a day is a lot of oil. Due to higher consumption, the U.S. now is importing over one million more barrels than it was in 1996, the last time the country’s full-year output was higher than the amount coming from overseas. (Production, incidentally, is still more than 20% below its 1970 peak.)
The elusive goal of energy independence may closer, but it remains a long way off. In its latest World Energy Outlook, the International Energy Agency predicts that “the United States moves steadily towards meeting all of its energy needs from domestic resources by 2035.”
The U.S. has boosted its imports mostly from non-OPEC countries in past few decades. Canadian oil represents 30% of U.S. imports, the largest share for any single nation. Canada also sends the U.S. more than double the amount of oil it did in 1995.
Saudi Arabia, though, still is sending 25% more oil than in 1995 and accounts for about 13% of crude from overseas. And the numbers for OPEC countries may have to rise in the coming years. “Non-OPEC supply plays the major role in meeting net oil demand growth this decade,” said the IEA, “but OPEC plays a far greater role after 2020.”