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Page added on March 25, 2014
Russian Oil Seen Heading East Not West in Crimea Spat
The Crimean crisis is poised to reshape the politics of oil by accelerating Russia’s drive to send more barrels to China, leaving Europe with pricier imports and boosting U.S. dependence on fuel from the Middle East.
China already has agreed to buy more than $350 billion of Russian crude in coming years from the government of President Vladimir Putin. The ties are likely to deepen as the U.S. and Europe levy sanctions against Russia as punishment for the invasion of Ukraine.
Such shifts will be hard to overcome. Europe, which gets about 30 percent of its natural gas from Russia, has few viable immediate alternatives. The U.S., even after the shale boom, must import 40 percent of its crude oil, 10.6 million barrels a day that leaves the country vulnerable to global markets.
The alternatives to Russia also carry significant financial, environmental and geological challenges. Canada’s oil sands pollute more than most traditional alternatives, while Poland’s promising shale fields have yet to be unlocked. The biggest oil finds of the past decade are trapped under the miles-deep waters offshore Brazil and West Africa.
“You’re going to see the Russians go out and try to sell and you’re going to see the Asian buyers drive hard bargains with Russia,” said Philip Verleger, an energy economist at PKVerleger LLC in Carbondale, Colorado, suggesting European countries will feel the most pain in the form of higher gas prices as they struggle to reduce their dependence on Russia.
China’s Stance
As world leaders gathered in The Hague to discuss nuclear security issues, U.S. President Barack Obama sought to encourage Chinese criticism of Russia on Ukraine. Chinese President Xi Jinping in turn pressed Obama about a reported U.S. breach of the servers of China’s largest phone-equipment maker.
China has always held a “just and objective attitude” toward the Ukraine crisis, Xi said in the meeting with Obama, according to a report yesterday from China’s official Xinhua news agency. The world’s biggest energy user, China abstained from the United Nations Security Council resolution that declared the Crimean succession referendum illegal. Russia vetoed it.
China imported a record amount of Russian crude last month, 2.72 million metric tons, about a supertanker full every three days. The total more than tripled in a decade, and Russia now represents 12 percent of China’s crude imports, customs data show, among the highest levels in the past seven years.
Long-Term Objective
“It’s always been assumed Russia reorienting its shipments toward China would be a long-term objective; originally it was considered something of a leverage point for Russia,” said Robert Kahn, a senior fellow at the Council on Foreign Relations in Washington. “Now people may see it as a reaction to the possible loss of a European market.”
As the world’s largest oil producer, Russia exported about $160 billion worth of crude, fuels and gas-based industrial feedstock to Europe and the U.S. in 2012, according to the International Trade Centre’s Trade Map, which is sponsored by the World Trade Organization and the United Nations.
European members of the Paris-based International Energy Agency imported 32 percent of their raw crude oil, fuels and gas-based chemical feedstock from Russia in 2012.
Asian Volumes
Europe will face higher gas prices if Russia successfully curtails pipeline supplies and diverts volumes to Asia, as more expensive shipments of the heating- and power-plant fuel arrive by tanker at European ports, said Peter Morici, an economist and professor at the University of Maryland. The U.S. will turn to the Middle East to replace any barrels it loses from Russia, he said.
The U.S. imported 167.5 million barrels of crude oil and petroleum products from Russia in 2013, 4.1 percent less than a year earlier and 25 percent lower than in 2010, according to the U.S. Energy Information Administration. The Organization of Petroleum Exporting Countries supplied 45 percent of the total 7.7 million barrels a day of crude oil imports last year, according to the data.
Russia faces its own challenges reducing its dependence on energy exports to Europe and the U.S., including a shortage of pipelines to Asia, Kahn said. In its pivot toward China, Russia is competing with energy suppliers from the Middle East and West Africa who also are targeting Asian buyers as the U.S. meets a rising portion of its oil and gas needs with North American production.
‘Driver’s Seat’
“The Asian buyers are in the driver’s seat,” Verleger said.
European Union foreign ministers meeting in Brussels agreed March 17 to freeze assets and put visa travel bans on 10 Russian politicians, three military leaders, including Black Sea Fleet Commander Aleksandr Vitko, and eight Crimean politicians. The sanctions are the broadest used on Russia since the 1991 fall of the Soviet Union.
Chinese President Xi visited Moscow on his first state tour in March last year, gaining a share of Russia’s prized Arctic exploration licenses. Russia also agreed to double oil sales and build a pipeline to export natural gas to China and draw a $2 billion loan from the nation’s lenders.
“China has invested in Russian oil companies and advanced loans to build infrastructure, and that’s a big statement,” said Nicholas Redman, London-based senior fellow for geopolitical risk and economic security at the International Institute of Strategic Studies. “Decisions have already been taken in Russia that far too much infrastructure has already been locked into European markets and it is highly desirable to diversify.”
Visa Ban
The U.S. has already imposed a visa ban on some individuals, whom it hasn’t identified, and President Obama has authorized the imposition of financial sanctions against Russia. The U.S. expanded sanctions March 20 to include businessmen linked to Putin, such as billionaires Gennady Timchenko and Arkady Rotenberg.
The diplomatic standoff is fueling a push in Congress to remove restrictions on exporting U.S. oil and gas to put further pressure on Putin. Three congressional committees are holding hearings this week on whether the U.S. should sell more of its growing oil and gas resources overseas, in part to weaken European dependence on Russian oil and gas.
In November, the U.S. and the EU used sanctions against Iran to force it into negotiations over the Islamic republic’s nuclear program. While almost all U.S. trade with Iran was banned after the Islamic Revolution, the West started imposing stricter penalties on energy, ports, insurance, shipping, banking and other transactions in 2010.
Iran Sanctions
U.S. restrictions also apply to other countries that trade with Iran. Limited relief was granted after Iran signed a temporary accord in November, though core oil and banking restrictions were maintained.
China National Petroleum Corp. last year paid the first $20 billion advance of an estimated $70 billion prepayment to OAO Rosneft. (ROSN) The payment was part of a $270 billion, 25-year oil supply agreement, which would make China Russia’s biggest market for its oil. In October, Rosneft also agreed to an $85 billion, 10-year deal with China Petrochemical Corp.
Under agreements signed in March 2013, China may double oil imports from Rosneft to more than 620,000 barrels a day, challenging Germany as the biggest buyer of Russian crude. In return, Rosneft allowed CNPC to join it in exploring three offshore Arctic areas for oil, the first such deal Russia has signed with an Asian company. The ocean north of Russia is considered one of the world’s largest unexplored oil provinces.
‘Economic Connection’
“Everyone knows there is a strong economic connection in place between China and Russia,” said Raj Kothari, a London-based fixed-income trader dealing in emerging market assets at Sun Global Investment Ltd. “That’ll play out over the years.”
Chinese energy companies have scoured the world for access to reserves and supplies to meet growing demand at home. Companies have announced more than $130 billion of acquisitions overseas in the past five years, according to data compiled by Bloomberg. State-run banks have given loans to nations including Venezuela and some in Africa for oil supplies.
“For Russia, there was an idea that Europe was something close by and it worked and it was desirable to emulate,” Redman said. “Over the years, on multiple fronts the attractions of the European model fell. It’s almost a civilizational choice the Russians have made to turn away from Europe, to stress their Eurasian rather than their European identity.”
38 Comments on "Russian Oil Seen Heading East Not West in Crimea Spat"
DC on Tue, 25th Mar 2014 12:22 pm
Amerika is already at war with the entire world, well, maybe except for Pitcairn Island(afaik). Both President Putin and his counterparts in China, as well as there friends in the BRICs and SCO, better get on the hop and start flooding the market with all those worthless Us T-bills they are holding onto. The uS simply does not have the resilience to survive what that would do to its house-of-cards war-economy.
Makati1 on Tue, 25th Mar 2014 12:33 pm
Seems like the West has not only shot itself in the foot, but in both feet and is aiming for it’s head. Both China and Russia hold all the cards in this game. I’m watching the show closely. It’s better than anything on commercial TV.
Davy, Hermann, MO on Tue, 25th Mar 2014 12:44 pm
“The Asian buyers are in the driver’s seat,” Verleger said.
Yea for now. Russia will go where the highest price is. When will Russia and China have a falling out? If I were Russia I would look very nervously at China. Immigration to the Russian border areas has increased markedly as trade increases. We could see a “Texas situation” annexing through immigration. Remember the Alamo? Russia population is decline is among the fastest in the world. The economy is basically a banana republic. The Russian economy has little diversification and is addicted to debt financing. China is in a debt unwind, immediate overshoot of food/water carrying capacity, massive pollution, and massive wealth inequality. China will be lucky to maintain half its current growth from a combination of limits of growth and financial instability. That spells big trouble for social tranquility. China’s debt driven global buying binge will come to end shortly by a drop in growth and exports. Let China and Russia dump tbills. It equates to taking a haircut on their investment and a windfall for the US. Some of you propagandist ideologues fail to connect the economic dots. Have you ever seen what happens in the stock market when a large investor dumps stock into a market that can’t absorb it? The market shuts down. If the market can’t reboot the value goes to near zero. Woops there goes the global economy if that happens. I also want to mention something the US has never used and that is the food stick. Rightly or wrongly the US corporate AG system has addicted the global food system to basic grains of corn, soy, wheat, and rice. If any of these US exports are withheld the knock on effect disturbs the whole global food system. The US tool of food is far more potent than Russia’s energy stick. So I think the global antagonist now should get a grip we are on a space ship to Mars were any disagreements could doom the mission.
rockman on Tue, 25th Mar 2014 1:10 pm
I won’t try to guess the numbers but a fair bit off Russian oil going to China in the future won’t be traveling east but moving towards the south and west. And just a very short distance compared to the trip from Crimea. The Sakhalin Island oil field development is a huge project that’s been underway for some years and still has decades ahead. At it sits right next to the Chinese border. They’ve already begun building out a huge refinery complex on the border.
Of course, that doesn’t preclude Crimean oil being shipped to China via the Black Sea or thru the new pipeline systems being considered from the various “Stans” to China. But I’ll assume the Russians are smart enough to not let the Chinese monopolize their sales any more than they would the EU. But however one wants to slice the cake up, Russia, along with a few others like Saudi Arabia, are the bakeries and the rest of the oil consuming nations are standing in a breadline that will become longer as we stumble down the PO patch.
Makati1 on Tue, 25th Mar 2014 1:39 pm
I don’t see a problem between Russia and China. I see the level of trade ramping up due to the stupidity of Western sanctions. Yes, China needs Russia’s resources and Russia needs Chinese money and consumers. Both are nuclear armed and that will prevent Chinese ‘adventurism’, I think. I see China shipping millions overseas to their far flung investments as time goes by.
And, just how sure are you of the MSN numbers put out on China’s population or finances? I doubt anyone not in the top circles really know what is happening there. And so called ‘investment’ managers are only going to tell you what will keep them in business. EVERYTHING has a money spin in today’s world. Everyone is busy covering their butts and trying to game the system one more time, thinking that when the crash comes, they can sell and get out before the super computers do. LMAO.
Arthur on Tue, 25th Mar 2014 1:45 pm
Go for it Wlad, let Europe feel the pain and no, I do not have masochistic tendencies. Making the energy situation tight will help creating a sense of urgency and propel the Europeans into a new renewable energy future, for which there is no alternative anyway in the long-term. Additionally it will question the lazy/comfortable trans-Atlantic post-1945 BAU and lead to re-think the current alliance-structure, with the Americans in the driving seat. What’s happening now in the Ukraine is not in the best interest of Europe.
Europe needs to realize that Russia can divert a lot of the fuel, previously intended for Europe, to Asia instead, leading to higher prices in Europe, just because the US opines that it should be the US and not the people of the Crimea who decides over the future of the people of the Crimea.
Boat on Tue, 25th Mar 2014 1:52 pm
The U.S., even after the shale boom, must import 40 percent of its crude oil, 10.6 million barrels a day that leaves the country vulnerable to global markets.
What a bunch of disinformation. While its true the US imports 7 billion barrels per day 4 billion of it is resold on the world market in exported petroleum products.The remaining 3 billion is covered by Canada if there were world troubles with shipping for example. The US is basically already energy independent if include Canadian energy supplies.
If Russia was eliminated from buying equipment from the “Free World” They would be ill equipped to even develop their own resources.
paulo1 on Tue, 25th Mar 2014 2:02 pm
Maybe China will stay home if they can get oil from Russia. As far as I’m concerned, they deserve each other. Other countries should learn not to meddle by this result.
If a concerted effort was made to isolate US by a cosortium of countries who are fed up with their hegemony, they would be in a world of hurt. It is time for true diplomacy, between all countries, and that means asking what others think and not telling them what they should do and think. That is what US has done since the 90s. They have acted as bullies and now with oil supplies constrained they no longer have the control and influence they once had or feel they are entitled to.
The list of pissed off countries, nay civilizations, are too long to list. Iraq and Iran come to mind first.
Paulo
Paulo
Davy, Hermann, MO on Tue, 25th Mar 2014 2:41 pm
Agreed Paulo but global politics, like love, it is a two way street. If it were not for all the other deadbeat countries in the world stirring up shit, being incompetent, and pissing away their treasure the US may not have assumed its current position. Many hypocritical nations out there bitching moaning and complaining about problems of their own making. They then focus on the big target of hatred the US because it is easy to blame someone else. No one likes a success story when it is at their expense and their incompetence as a people. No, rest of the world is a mess too. They have done plenty of bed wetting themselves. The sins of the US are huge but not much worse than many others especially if history is thrown in.
Davy, Hermann, MO on Tue, 25th Mar 2014 2:52 pm
BTW, Makati, bank runs in China today. I know what you will say more false reporting by MSM.
http://www.zerohedge.com/news/2014-03-25/what-bank-run-china-looks-hundreds-rush-banks-following-solvency-rumors
Northwest Resident on Tue, 25th Mar 2014 2:57 pm
Boat — The US is basically already energy independent if include Canadian energy supplies.
I’m not so sure about that, Boat. I’m at work and don’t have time to do the googling/research, but I distinctly remember an article posted here not long ago by Bloomberg/Forbes or one of those pro-BAU information sources that basically made a big deal out of how America was getting close to energy independence, all we had to do was keep drilling thousands of holes in rock to frac’ out the oil. Not quite energy independent, but “almost” — with that “almost” being entirely dependent on the shale oil plays which are big money losers and have rapid decline rates — not a very solid foundation for “energy independence” if you ask me.
Where do you get your information that leads you to conclude that America is “energy independent”?
“If Russia was eliminated from buying equipment from the “Free World” They would be ill equipped to even develop their own resources.”
Totally agree on that point. All these guys who think that China and Russia have America by the throat and can put the squeeze on anytime they so desire are simply letting their hatred of America distort their ability to clearly see reality — from my pov…
Fulton J. Waterloo on Tue, 25th Mar 2014 3:12 pm
Northwest: we do not “hate” America. We want to stop being embarrassed by its bullying…
Arthur on Tue, 25th Mar 2014 3:22 pm
All these guys who think that China and Russia have America by the throat and can put the squeeze on anytime they so desire are simply letting their hatred of America distort their ability to clearly see reality — from my pov…
Nobody says that China and Russia have America by the throat, far from it.
America has Europe by the throat by pushing it in a conflict with Russia.
Davy, Hermann, MO on Tue, 25th Mar 2014 3:33 pm
Fulton said – Northwest: we do not “hate” America. We want to stop being embarrassed by its bullying…
Fulton, N/R and I are very tough on our own country. “DO”, I read any of you all being tough on your country,,,,”Rarely” I also read unending praise for China and Russia. Two countries that have killed more people directly or indirectly than the US has or ever will. I might also throw in Europe over the ages has killed more as a Continental people than China or Russia combined. It is this complaining, blaming, and finger pointing by many here, including a few purely propagandist and ideologues, that is much of the reason this world will spiral out of control with no hope. Have you ever seen a marriage repair itself with the same situation of blame and complain? Not only that without first everyone looking at how they contribute to this mess there is no acceptance of a problem. It is always someone else’s fault it becomes a snake eating its tail of accusations and counter accusations.
Northwest Resident on Tue, 25th Mar 2014 3:35 pm
“Nobody says that China and Russia have America by the throat, far from it.”
Except for those posting on this site who seem to believe that China and/or Russia or any coalition of nations that might want to do so can simply “dump dollars” and crash America’s economy. Or, simply switch to another currency for doing oil/energy transactions and end the status of the dollar, accomplishing the same thing. Don’t deny that there are those, and perhaps yourself included Arthur, who seem to believe that other countries have that ability to destroy America’s economy — a comical and poorly thought out belief though it is.
J-Gav on Tue, 25th Mar 2014 3:42 pm
Russia has more options and leverage in the pipeline game than the West does and know it well. Still, I don’t expect them to make the mistake of putting all their eggs in one basket.
And remember, getting Crimea back (rightfully in my view) brings with it a host of financial/development responsibilities which Russia is not really prepared to take on at this point. In the short-term it’s a poisoned chalice but strategically a necessity. In any case, Russia is not in an economic position to do without any significant portion of its oil/gas revenues for any length of time.
Davey on Tue, 25th Mar 2014 4:06 pm
Great synopsis Gav!
GregT on Tue, 25th Mar 2014 4:49 pm
China and Russia both have overall standards of living much less than we do in the West.
As this economic sh*t storm unravels, and it will, it is those of us in the West, that have the farthest to fall.
Stilgar Wilcox on Tue, 25th Mar 2014 5:06 pm
“Yea for now. Russia will go where the highest price is. When will Russia and China have a falling out? If I were Russia I would look very nervously at China.”
Russia and China will probably see eye to eye at least until the US fall from grace.
As a sideline note, why bother with what amount to symbolic sanctions on Russia if it results in sending more FF to China? Sometimes it’s difficult to do, but maybe in this case we should have just said,
“Crimea? Sure, take it.”
Northwest Resident on Tue, 25th Mar 2014 5:22 pm
“Crimea? Sure, take it.”
SW, I’m pretty sure that once out of the limelight, in private, that’s exactly what Obama and other Western leaders are thinking and saying.
Nobody seems to believe me, but I personally am convinced that we are being treated to a 3-ring media/political circus to cover for the fact that the real, central issue is just that — to return Crimea to Russia where it fully belongs. They HAVE to make a big deal out of it, otherwise all the other little and large countries in the world would be wanting to arrange their borders too, and that would bring on total chaos.
I’m sticking with my original story. The ultimate goal of this charade is to give Crimea back to Russia (check), and to divide Ukraine into East Russian Speaking pro-Russian and West non-Russian Speaking pro-Europe. East Ukraine stays in Russian sphere of influence, West Ukraine gets to cozy up to Europe and enter their sphere of influence.
It is all about eliminating ethnic tension and potential for strife and civil war once TSHTF. Oil/NG diversions to China and all the hoopla about war and cutting of oil/NG to Europe is just the clown and dog-and-pony acts keeping everybody distracted from the main event happening in the center ring. Hey, somebody give me some popcorn!
paulo1 on Tue, 25th Mar 2014 6:01 pm
@Boat
Your numbers are wrong. US imports over 10 million bbl/day. Canadian oil is not US oil, either. From Quoteoil.com
“In point of fact, the United States has become ever more dependent upon imported or foreign oil. A mere thirty years ago, 28% of the oil consumed in the United States was imported. Today nearly 60% of the oil utilized and consumed in the United States is imported from other countries.”
While Canada is pleased to supply the US market, and always has been pleased to be the US biggest energy supplier, the oil producing companies that actually own the oil will sell to the highest bidder once it hits the coast via XL and a reversed Seaway. The country, itself, does not control who buys the oil beyond taking a cut and being a cheerleader. This might change a bit after the next election, but probably not. I could see a larger tax grab, but Liberals are still smarting from the failed NEP and the visceral hatred of almost all things ‘Eastern’ from those Trudeau years. Now that ‘Trudeau the Younger’ is vying for PM, the knives are already being brandished in Conservative Party tv commercials.
While Canada is pretty much a 51st state, in many minds, I caution that to disregard Canadian aspirations and independence is foolish. As anyone who has gone through divorce will attest, taking a relationship for granted is a receipe for disasterous outcomes. You would think the current crop of disastrous foreign policy outcomes would reinforce this to those who think they are in control. Canada sells oil to the US because the infrastructure is in place and it is easier to do so. Now. However, when access to other markets eventually occur, the US will have to pay world prices or very close to world prices from that point forward. No one cares who buys it as long as it keeps flowing. If restrictions were placed on the southern routes, it would be certain that domestic protests would decline in favour of new pipeline construction to both coasts. Right now, Kindermorgan has a proposal in place to triple world exports via Vancouver to 890,000 bl/day.
There has also been an assumption that if Canada ( via multi-national oil companies) disregard the US market then it is feasible for the US to simply invade and take over Canadian resources be it oil or water. I don’t think so. I know I would hunker down and plink away and can only assume millions of other fellow citizens would do so as well.
The US is not energy independent and hasn’t been for 50+ years. The situation is getting worse regardless of LTO hype. United States foreign policy and international relationships should reflect this reality. In short, be nice to your friends and don’t take them for granted.
Paulo
westexas on Tue, 25th Mar 2014 6:02 pm
Russian net oil exports and their ECI Ratio (ratio of production to consumption) respectively increased from 5.0 mbpd and 2.9 in 2002 to 7.2 mbpd and 3.7 in 2007 (EIA data, total petroleum liquids + other liquids).
From 2007 to 2012, their net exports were at or below 7.2 mbpd, as their ECI ratio fell from 3.7 in 2007 to 3.3 in 2012.
If the ECI ratio, the ratio of production to consumption, is declining, a net exporter is mathematically trending toward zero net exports (think of it as an income to expense ratio, at an income to expense ratio of 1.0, net income = zero).
From 2005 to 2012, 26 of the top 33 net exporters in 2005 showed a declining ECI ratio, which caused an overall decline in the Top 33 ECI ratio (and an overall post-2005 decline in net exports). Based on a simple model and based on a case history, the rate of depletion in post-export peak CNE (Cumulative Net Exports) tends to exceed the rate of decline in the ECI Ratio.
Here are the Russian numbers for 2002 to 2012:
Russian Net Exports & ECI Ratios (EIA):
2002: 5.0 mbpd & 2.9
2003: 5.8 & 3.2
2004: 6.5 & 3.4
2005: 6.7 & 3.4
2006: 6.9 & 3.5
2007: 7.2 & 3.7
2008: 6.9 & 3.4
2009: 7.0 & 3.4
2010: 7.1 & 3.4
2011: 7.1 & 3.3
2012: 7.2 & 3.3
Based on the 2007 to 2012 rate of decline in the Russian ECI ratio, I estimate that Russian post-2007 CNE are about 72 Gb (billion barrels), with 13 Gb having been shipped from 2008 to 2012 inclusive.
The five year (2007 to 2012) exponential rate of decline in their ECI ratio was 2.3%/year. The five year (2007 to 2012) estimated exponential rate of decline in remaining post-2007 Russian CNE, i.e., the estimated exponential rate of depletion in in post-2007 Russian CNE, was 4.0%/year.
GregT on Tue, 25th Mar 2014 6:07 pm
“is just the clown and dog-and-pony acts keeping everybody distracted from the main event happening in the center ring.”
I still maintain that the main event is the same one that has been ongoing for a very long time. A NWO. One banking system, and one world government. What better way to implement such a system, than by bringing the world’s economies to their knees.
https://www.youtube.com/watch?v=byxeOG_pZ1o
Davey on Tue, 25th Mar 2014 6:13 pm
Paulo, if anybody should worry about a US collpase it would be Canada. I don’t see how the borders could be secured to prevent massive refugee movements if it came to that. So I would think Canadians would think twice about hurting the US economically. Just common sense for neighbors to take care of each other. If SHTF North American energy should stay in North America IMHO.
Northwest Resident on Tue, 25th Mar 2014 6:20 pm
GregT — NWO? Could be. That’s a decent speculation, hopefully so is mine. BTW — curse you for leading me to listen to and watch the first couple minutes of that speech, again. The words are twisted, the real intents are concealed, the lofty idealism is just a cover for dirty deeds done dirt cheap and backstabs by the millions, the real goal of course being oil oil oil. I just about lost my lunch and had to cut it short.
GregT on Tue, 25th Mar 2014 6:28 pm
NWR,
You know how sometimes you get very strong gut feelings about things? The first time I ever heard him speak, pure evil was the feeling I got. That feeling intensified as time went on. Then there was junior. How in god’s name did he ever become POTUS? One thing for sure, at least IMHO, the agenda being driven by these people, is not in the best interests of the rest of us.
GregT on Tue, 25th Mar 2014 6:37 pm
This speech by GHWB reveals an even clearer picture of their intent.
https://www.youtube.com/watch?v=Rc7i0wCFf8g
Boat on Tue, 25th Mar 2014 7:01 pm
http://www.eia.gov/dnav/pet/pet_move_wkly_dc_nus-z00_mbblpd_w.htm
7.2 mbpd of oil is what we import now according to this EIA chart. I had subtracted the total crude exports and products which is 5.3
my earlier post was using some very rough numbers
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MTTIMUSCA1&f=M
The major change in the US is our ability to import oil, refine it and resell it. My rough calculations say that we only need 1-2 mbpd of crude per day to achieve independance. Ya’ll can check my math. But with any more demand destruction or increased fracking or efficiency gains in auto’s we could get there soon.
Boat on Tue, 25th Mar 2014 7:23 pm
Paulo There are other pipelines being built as we speak and others being planned. The entire keystone debate is just a smoke screen. Google tar sand pipelines and look at the charts. As you said Canada is almost like a 51st state. I don’t see any of that changing and why would it. But if keystone for example was stopped it would be no big deal. It’s all hype about nothing. As i have read, the oil will get out one way or another. Any idea of an invasion is crazy. lol
GregT on Tue, 25th Mar 2014 7:54 pm
Boat,
You are aware of the takeover of Nexen by the nationally owned China National Offshore Oil Corporation, or CNOOC?
http://news.sanford.duke.edu/news-type/commentary/2013/china-keystone-showdown-over-pipeline
Arthur on Tue, 25th Mar 2014 8:18 pm
Finally some realism with the largest German MSM, der Spiegel:
http://www.spiegel.de/wirtschaft/soziales/krim-krise-eu-koennte-russischen-gasboykott-nur-kurz-standhalten-a-960421.html
A complete Russian boycott of NG would hurt Europe severely in a matter of days. Nice to know that even der Spiegel (very anti-Putin) now finally comes to it’s senses.
Boat on Tue, 25th Mar 2014 8:38 pm
GregT
Yes I had read that. Many Foreign companies have invested in Canada. Motiva which is a refinery in TEX recently went through a 10 billion dollar expansion. Who owns it? The Dutch and the Saudi. Where does it get it’s oil? 75% Saudi.
http://www.eia.gov/petroleum/imports/companylevel/summary.cfm
interesting chart showing where the oil comes from to which company.
http://www.eia.gov/petroleum/imports/companylevel/summary.cfm
Boat on Tue, 25th Mar 2014 8:45 pm
GregT
If your implying that the US should worry about supplies of Canadian oil because foreign companies own the tar sands. I’m not. Out ties go much deeper than that. Mexico, Canada, and the US are tied to the hip.
GregT on Tue, 25th Mar 2014 8:56 pm
Boat,
I do agree that our ‘ties’ go much deeper, but that isn’t stopping our government officials on all levels from increasing ties and trade with China. Heck, even the majority of the people in the city of Vancouver are now Asian.
kervennic on Wed, 26th Mar 2014 2:19 am
This is very good news for europe. We need anyway to get rid of our fossil fuel economy and that will be less painfull to start just now.
Makati1 on Wed, 26th Mar 2014 3:06 am
LMAO at the shit storm of comments this has stirred up. Some I a gree with and some are so far out as to be on the moon.
The Americans are still so protective of the largest terrorist organization in the world, the one who’s destroying the world in the name of Capitalism and ‘Democracy’.
Sure the dollar can be destroyed by Russia or China or even by US fumbling. Nothing is sacred about the dollar or trade. Don’t pin your hopes on the dollar not being used against the US when crunch time comes. I see it’s fall before 2020, maybe much sooner.
Makati1 on Wed, 26th Mar 2014 3:14 am
Boat, “Canada, and the US are tied to the hip.”
I would say that is is more of a sodomy union and the US is on top. Pardon my crudeness, but then I am an American.
rockman on Wed, 26th Mar 2014 1:17 pm
“Canada, and the US are tied to the hip.” Kinda hard to agree or disagree since that’s a rather loose concept. But I know a few Canadian oil men and they are no different then ours: we’ll all sell (if allowed by law) to wherever the best profit can be made. Today that’s the US for most Canadian oil. If in 5 years they can get a lot of oil sands production to the west coast and China out bids the US then that’s where it will go.
BTW those Mexican oil exports which are currently “tied to the hip” with the US: Mexico has already begun a pilot program exporting a small amount of their oil to China.
Nothing personal…just business.