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Know the West

U.S. is net energy exporter! (Psych!)


By now you’ve surely read the headlines that proclaim, “US Nears Milestone: Net Fuel Exporter” or “US Becomes Net Oil-Product Exporter” or, the most ambitious and egregious, “U.S. Becomes Net Energy Exporter.” The stories affixed to the headlines certainly have a triumphant air to them, and why shouldn’t they? After four decades of our leaders pining for energy independence and “no more foreign oil” we’ve finally reached our goal. Right?

Not quite. In fact, we are not anywhere near weaning ourselves from foreign oil.

It’s not that the headlines are lying, exactly. The US is, in fact, exporting more products made from crude oil than it imports. Distillate fuel oil is our number one seller, and “finished motor gasoline” is another healthy export. So, overall, our refineries are shipping about 800,000 to 1 million barrels per day more of these refined fuels than the U.S. is shipping in.

While this sounds great, it’s overshadowed by what is left out of the equation: Crude oil. Each day, the U.S. buys nearly 9 million barrels of crude from foreign countries, and we export almost nothing. Throw those numbers in, and the equation gets tilted pretty heavily towards the net importer side: We import 7-8 million barrels of crude oil and crude oil products per day more than we export, and that’s on a good day. In other words, we have nearly 3 billion barrels of imported oil and oil products per year standing between our current state and petroleum independence*.

But that sure as heck isn’t what you’d get out of reading the aforementioned headlines and dozens others like them. The stories below the headlines most often clear things up, but not until half the readers have tweeted or Facebooked or otherwise disseminated the somewhat distorted ideas contained in the headlines. As a result, there’s a growing number of folks out there who think that all that drilling in North Dakota, Colorado and Wyoming is actually doing what the politicians said it would do: Break us of our foreign oil addiction.

That, of course, is not the case. Not only that, but the fact that we are exporting quite a bit of refined fuel may actually be helping to increase prices at the pump (which is part of the reason we want to get off foreign oil, right?) National Public Radio recently gave an interesting explanation for rising gasoline prices: We are able to refine petroleum more cheaply than other places, therefore other countries want to buy refined products from us (which is why we’re not a net exporter), which increases overall demand on our refineries, which results in higher prices for us at home. Confusing, sure, but it kind of makes sense.

And the reason our refineries can operate more cheaply these days is because we have a glut of methane, a.k.a. natural gas, which is at record low prices right now. And natural gas is used to do the major work -- heating up the crude -- in the refining process.

So, it turns out that “Drill baby, drill” doesn't get us to energy independence. It doesn't lower gas prices. It may even cause them, in an indirect way, to go up.

*The U.S. is actually somewhat closer to being a net energy exporter thanks to the 100 million or so tons of coal we shipped to other countries last year. Nevertheless, we’re not there yet. The BTUs in that coal don’t make up for those in the oil that we import -- we’re still more than 6 million barrels (or 1.4 million tons of coal) per day short.

Jonathan Thompson is a contributing editor at High Country News and a 2011-2012 Ted Scripps Fellow in Environmental Journalism at the University of Colorado Boulder.