The United States Is The New Saudi Arabia!

Here we go again, another Planet Stupid update. All posts like this one have a predictable structure. Some egregious bullshit is put out by a propaganda organization like Reuters, the Associated Press, CBS, NPR, etc. This bullshit demands a refutation, which I supply. What's different today is that I will let Brad Plumer of the Wonk Blog do the debunking.

Here's the bullshit, from the AP. The author is one Jonathan Fahey, who one presumes is a member in good standing of our species Homo sapiens, also known as Homo laeviculus.

NEW YORK (AP) — U.S. oil output is surging so fast that the United States could soon overtake Saudi Arabia as the world's biggest producer.

Driven by high prices and new drilling methods, U.S. production of crude and other liquid hydrocarbons is on track to rise 7 percent this year to an average of 10.9 million barrels per day. This will be the fourth straight year of crude increases and the biggest single-year gain since 1951.

The boom has surprised even the experts.

Experts?

"Five years ago, if I or anyone had predicted today's production growth, people would have thought we were crazy," says Jim Burkhard, head of oil markets research at IHS CERA, an energy consulting firm.

Ah! The Usual Suspects. And the "experts" at Citigroup also get a mention.

The Energy Department forecasts that U.S. production of crude and other liquid hydrocarbons, which includes biofuels, will average 11.4 million barrels per day next year. That would be a record for the U.S. and just below Saudi Arabia's output of 11.6 million barrels. Citibank forecasts U.S. production could reach 13 million to 15 million barrels per day by 2020, helping to make North America "the new Middle East."

There's more, but why bother to repeat it? Here's how the bullshit (audio) was reported by the amateurish but enthusiastic propagandists at NPR. Bold italics indicate emphasis in the reporter's voice.

NPR's business news begins with an American oil boom. [happy theme music - duh, da duh duh da, da duh duh da...]

The United States could soon overtake Saudi Arabia as the world's biggest oil producer. The Associated Press reports new drilling methods have boosted U.S. oil production 7% this year alone.

And next year, the energy department sees American output falling just shy of Saudi Arabia's 11.6 million barrels per day. Industry analysts predict that by 2020 North America could be the New Middle East.

Do you see how the propaganda works? I assume you do, it couldn't be any more fucking obvious.

OK, here's Brad Plumer's The U.S. isn’t quite ready to catch up with Saudi Arabia on oil…

Here’s an eye-catching lead from the AP’s Jonathan Fahey: “U.S. oil output is surging so fast that the United States could soon overtake Saudi Arabia as the world’s biggest producer.”

It’s a great story, but it could use a bit of dissecting. There’s no question that U.S. oil output has surged in recent years. But we’re not quite ready to catch up with Saudi Arabia just yet. There’s a tiny asterisk in here that warrants a fuller explanation.

First, here’s a chart (pdf) from the Energy Information Administration looking at crude oil production around the world. Notice that United States is still far below Saudi Arabia:

U.S. crude oil production has increased dramatically in the past year, thanks to a drilling boom in places like North Dakota. That’s helped the U.S. reduce its imports. But we’re not likely to catch up to Saudi Arabia anytime soon. What’s more, Saudi crude is generally cheaper and easier to produce than America’s “unconventional” oil from shale rock. That gives the Saudis enormous sway over oil markets.

So what is the AP referring to? The trick is to look at what the EIA calls “total oil supply.” This isn’t just crude oil. It also includes natural gas liquids, biofuels, and the processing gains from refineries. On this score, yes, the United States is catching up with Saudi Arabia. Here’s a chart from James Hamilton:

Components of total U.S. oil supply, monthly, January 2000 to March 2012, in millions of barrels per day. Blue: crude oil including lease condensates; purple: refinery processing gain; brick: natural gas plant liquids; yellow: other liquids, including corn ethanol. Data source: EIA.

The EIA forecasts that the United States will produce an average of 11.4 million barrels per day of “crude oil and other hydrocarbons” next year. That’s compared with 11.6 million barrels per day of “crude oil and other hydrocarbons” from Saudi Arabia. 

So which metric should we care about? Some energy experts, like Chris Nelder, argue that we should mainly focus on crude oil, since that’s by far the most important energy source for powering the global economy. Most of our cars still run on gasoline. And gasoline depends on crude oil.

Natural gas liquids, by contrast, largely consist of propane and ethane. Those are quite useful for the petrochemical industry and for home heating. But we can’t really fuel our cars with natural gas liquids. They don’t have nearly the same importance as crude oil in that regard. (Technically, we could run our cars on propane, but the infrastructure isn’t in place.) Biofuels, meanwhile, are useful but fairly energy-intensive to produce. They don’t pack nearly the same punch as oil.

The "trick" which gives legs to the propaganda is to use what oil analysts call the "all liquids" tally (Hamilton's chart above). But if you look at crude oil alone, which gives us gasoline, diesel, jet fuel and other products when refined, you see that production is just nosing up above 6 million barrels-per-day (the EIA chart above). And to put that in historical context, I'll throw in the long EIA graph which I used in Where Is American Oil Production Going? (January 26, 2012).

Source. October, 2011 crude oil production (average) was 5.784 million barrels per day (b/d).

If you're going to use all liquids, why not throw in cooking grease? Some enterprising Americans have gotten their vehicles to run on it, and to make that unsavory fact more palatable, they call it biodiesel. I'll bet the United States generates way more cooking grease every day than Saudi Arabia does.

At the end of the day, the United States is indeed the world's leading producer of an important commodity, a commodity which is highly valued here in the The Land of the Free and the Home of the Brave. On a daily basis, by any measure you care to use, the United States produces more bullshit than any other nation on Earth. Way more. It's no contest. No other nation even comes close.

Makes you proud, doesn't it?

Bonus Video — requires no explanation in this context

 

Comments

[Bill Hicks]

You would think that upon hearing this story even your average clueless NPR listener would then question why, if it is true that the U.S. is about to overtake Saudi Arabia as the world's biggest oil producer, gasoline is still selling for north of $3.50 a gallon. Just goes to show how little critical thinking there is in any segment of society these days.

[Dave Cohen]

Well, Bill --

I better tread lightly. Only yesterday I was criticized in the comments for lampooning dumb people.

Yeah, I did that. I went after dumb people like Ben Bernanke, Paul Krugman and Rene Descartes. The "liquid asset" poor are merely mindless followers of neo-Keynesian ideologues. Mindlessness is not stupidity per se, but it is senseless and foolish.

Sorry!!!!!

And to your point, NPR listeners would no doubt attribute gasoline prices to a conspiracy by the oil companies to keep prices high.

-- Dave

[Posthack]

Hi Dave,

Perhaps they just got their tenses mixed up.

The United States WAS Saudi Arabia, only it was in the first 70 years of the last century. All that easy to get mainland oil was used up developing the country from an agricultural backwater into a superpower and fueling the war effort for the Allies in World War II.

[JohnWDB]

Dave, in my experience, even highly educated American voters generally:

a) don't know there is an energy crisis
b) believe we are well on our way to transitioning to "green alternatives"
c) have never heard the term "oil peak"
d) have never heard of "ocean acidification"

If you start from that perspective, it's hard to really dissect NPR's glib prognostications during your distracted morning commute.

[John D]

I've read that oil companies are pushing this myth of self sufficiency in energy because they don't want an outcry from the public as they apply for export licenses to ship US oil to higher price markets.

BTW, pleasantly surprised you're hip enough to have heard of 'Gangnam Style'.

[Dave Cohen]

@John D--

If that video doesn't summarize the main message of this post, what would?

Heeeeyyyy Sexy Lady!
Wo! Wo! Wo! Wo! Wo!
Gangnum style!

-- Dave

[Oliver]

Sharia Law can't be far behind on Main Street USA.

يمكن الشريعة لا يكون وراء ذلك بكثير على الشارع الرئيسي الولايات المتحدة الأمريكية.

[Ken Barrows]

Sharia may be soon, but at least not in Oklahoma!

[Oliver]

OOOOk-lahoma, where the nukes come sweepin' down the plain,
And the wavin' weak can sure feel bleak,
When the fallout comes right behind the rain

OOOOk-lahoma, Ev'ry night my honey lamb and I,
Sit alone and groan and watch a drone makin' lazy circles in the sky.

We know we belong to thieves abroad
And the land we belong to is a fraud!
And when we say
Yeeow! Ayipioeeay!
We're only sayin'
You're doin' fine, Oklahoma!
Oklahoma O.K.

[James]

>Sharia Law can't be far behind on Main Street USA.

I lol'ed.

[MK Ultra]

Good job! That's pretty much what I thought when I first heard the noise (quite by accident on National Prostituted Radio). I've seen heard the noise repeated several times and no matter how often I hear it, it still sounds like bullshit to my ears. Although I didn't go to the author's extent to dissect and expose the lie, my gut impulse was simple "if the US is experiencing such an oil boom, how come the Empire is invading every country with oil and planning never-ending war and occupations on the rest?" Riiiiight! If it looks like bullshit, smells like bullshit and sounds like bullshit...but galee, it must be bullshit!