LNG Exports: The Latest Pipedream

Lately the papers have been full of calls for the US to export natural gas to use as a "weapon" against Putin in the Crimean Coup Contest, based on the assumption that Russia is interested in Crimea (and other parts of Ukraine) for the gas pipelines.  There are several serious problems with this line of reasoning, but I'm going to focus on the most basic one: the US doesn't extract enough gas to export LNG.

The difference between historical rates of extraction + imports (~10% of total flow) and consumption + exports (~6% of total flow) (through pipelines to and from Canada and Mexico) has not exceeded 6% since 2001, when conventional gas extraction in the US reached a secondary peak.  That is to say that all of the gas we drill and frack and import from Canada is already spoken for.  Don't believe me?  Check out the weekly storage inventories at the EIA:

If there was plenty to go around, why would our stocks of it be lower than any winter in the last decade?

The whole premise that the US could be a net exporter of gas is based on the idea that shale gas extraction is going through the roof, and is responsible for the increase in gas extraction since 2005 or so.  The reality is a little more nuanced.  This graph shows the extraction rates of gas from different types of reservoirs in the US:

Yes, that purple line is rising fast, but look at the rest of the picture.  Conventional gas extraction has declined by 30% since 2006, negating most of the gains from fracking shale wells.  With prices stuck to the $4 floor, it's unlikely that drillers will be able to continue the extraction gains of recent years.  With unrelenting decline rates upward of 30% per year in most cases, prices would need to be a lot higher to keep that purple line from flattening out, as many drillers are backing away from shale gas extraction already. 

The real kicker is that so much of these hollers for exports are coming from politicians.  All it would take would be a quick read of the results summary page in this report (pdf warning) to see how politically stupid it is to essentially be calling for higher energy prices for Americans in an election year, right when much of the country has been having a hard time getting ahold of propane to keep warm.

US Energy Dependence - 6(ish) Month Update

Even though the US EIA is currently shuttered, its website is still accessible.

I thought it would be a good time to update the two graphs from March garnered so much interest.  The first graph was the chart with the misleading axes that gave the impression that the US extracts more oil than we collectively burn.

An additional seven months of data are currently available (through July 2013), and this is what the chart would look like now if the new data are included:

Imports have apparently disappeared completely, and since the Field Production line is so far above the consumption line, the US must once again be an oil exporter.  At least that's what CNBC would have you believe if they republished this graph.  The reality hasn't changed a whole lot.

Yes, the US is extracting more oil than we're importing, by a little bit.  This is an important trend, since the last time the US was extracting more oil than importing was 1993 (20 years ago this month, if my 12-month moving average chart is to be believed). The vertical axis is in million barrels per day, as with the rest of the graphs.

This chart raised an interesting question for me.  If the US is back to 50-50 domestic versus imported petroleum, how close are we today to petroleum consumption levels of the last time we were at that same domestic/import ratio?  All I had to do was to add two columns to find out just how much actual oil the US has been able to access, which conveniently leaves out that pesky "refinery gain" and ignores ethanol blending (which energetically speaking is pretty much a wash anyhow).  The graph, which I've not seen before, looks like this:

Now this chart does not address exports of refined products, just like it ignores refinery gain, natural gas plant liquids, ethanol, and used vegetable oil that powers a token number of hippie-mobiles.  US exports of crude oil have been consistently small enough to be reasonably neglected.  What this chart shows is that the US has been on an oil availability plateau since late 1997.  Also, despite throwing massive amounts of capital at drilling companies, paying three times the price per barrel and per gallon of oil and its major products, launching 2 major wars in the Middle East, and designating several large areas of the country as energy sacrifice zones to facilitate major oil extraction efforts, the US has still not gotten above the roughly 15 million barrels per day ceiling that we first faced in 1979.

Before we can talk about what that means for overall energy availability and consumption trends in the US (often called "quality of life" by people who equate burning more oil with a higher quality life), we have to look at population.  I pulled the decadal census data off of wikipedia and made a quick and dirty linear interpolation of it, mostly because I'm lazy enough not to want to back out exponential growth rates for an exercise this quick.  Also, I extrapolated the 2000-2010 growth rate through July of 2013, due to a lack of official data and to save time.  Perhaps I'll work up a more vigorous US population chart another time...  Anyhow, here's the chart:

Something I've always wanted to see, but haven't looked hard enough to find, was a trend of US oil consumption/availability per capita.  Now, this chart is riddled with asterisks, as it's a compilation of the above charts of population and the imports + field production (ignoring refinery gain, refined products exports, ethanol, etc.), but it's as close as I've seen to a historic representation of US consumption patterns.  Notable is the peak in 1979 and the set of declining plateaus since. 

Anyhow, one last chart before I go.  This one is a recreation of Kunstler's US oil production history graph, complete with 12-month moving averages to smooth it out, extended to include the latest data through July 2013.  The third peak on the far right hand side looks more significant today than it did last winter.  Whether the oil industry can keep up the flow of capital needed to coax oil out of formations like the Bakken remains to be seen.

US Energy Dependence

This week's Archdruid Report post was the first place I saw this graph:

There are several things obviously wrong with the graph.  First, neither axis starts at zero.  Second, even though the units used for all three lines are the same, the production line is given its own axis on the right, with a substantially different scale.  I decided to see if I could find the data and recreate the graph to look how we'd all expect data to be presented.

I found the relevant data at the EIA website, with monthly data for Production, Consumption, and Net Imports.  Using a spreadsheet, I made a chart of all three, matched the scales and units, and look what I made:

It's not as fancy, and it has a couple extra months' worth of data, but it looks close enough to suggest that it's the same data that the original chart-makers used.  So what does the data look like when it's put on a chart with one axis that starts at zero, and we can see the "surge" in production next to the "substantial" fall in imports?

The rise in production looks a little less impressive now, doesn't it?

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While I'm at it, I may as well post two other charts that were interesting using the same data set.  The first was pointed out by Glenn (who credited his wife and daughter for pointing it out to him), which is that the two "sources" of oil on this graph (Field Production and Net Imports) don't add up to the Consumption total.  In fact, as this chart shows, they're off by quite a bit:

Indeed, for the last month of data (Dec 2012) the difference is over 5 million barrels a day, which is 28% of consumption for the month, while net imports are listed at 6 million barrels a day.  Where does all of that extra consumed oil come from?

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The data series for all three (Field Production, Consumption, and Net Imports) go back to 1973 in monthly form in the tables I was able to find on the EIA website.  When plotted since then, the trends are pretty interesting, especially the change in net imports. 

There's also the pesky problem of the three series not adding up in this chart as well.  Here's what the difference looks like:

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Someone also asked a question about JH Kunstler's chart of US oil production.  I put together a remake of it using the same monthly data set as the other graphs.  It's not as smooth, but the picture is pretty similar. The uptick on the right looks a bit more pronounced with the last couple months of 2012 included, though.  Perhaps if it's smoothed out as quarterly or annual averages it looks more like the original.