The Myth that the US will Soon Become an Oil Exporter

Countries trade crude oil and oil products back and forth. When all of these transactions are netted out, is the US close to becoming a “net” oil exporter?

With the recent increase in oil production (perhaps even exceeding that of Russia on a “barrels-per-day” basis), a person might think that US oil production problems are behind us. If we look at the data, though, it is very clear that the US is still a long way from becoming a net oil exporter.

There are several reasons for confusion. One is the fact that excess refinery capacity can lead to the ability to export both gasoline and diesel, even though the United States continues to import large amounts of crude oil. Another is that tight oil (extracted through “fracking”) is growing from a small base, but can’t necessarily ramp up very far, very quickly. Another source of confusion is with respect to how different types of liquids should be combined for comparison purposes.

In this post, I would like to explain why the idea that the US is about to become a net oil exporter is simply a myth.  Continue reading

What are the problems with using corn ethanol for fuel?

Brian Westenhaus, over at New Energy and Fuel, has been telling me what a good product corn ethanol is. He is very familiar with raising corn for ethanol, and can see how the process has been improved in recent years. Now it takes hardly any petroleum and chemical inputs from the farmer in order to grow a crop if corn for ethanol. The process is very mechanized, so it does not take much labor either.

He has been having some discussions with Robert Rapier, who sees corn ethanol as being a problem, primarily because of its low energy return. I see some other issues with corn ethanol, relating primarily to its competition with food, and because of this, its tendency to raise the price of food. This is a problem for poor people around the world who cannot afford high-priced food. Another concern is that the amount of corn ethanol produced will tend to decline over time, rather than being a real help when we need it.

Let me explain the issues as I see them. Continue reading

What Is Peak Oil?

This is Chapter 1 of a Peak Oil Booklet I am working on, with the assistance of folks from TheOilDrum.com.

Chapter 1: What Is Peak Oil?

In this chapter, we discuss some of the basic issues relating to peak oil and the expected worldwide decline in oil production.

1. What is peak oil?

“Peak oil” is the term used to describe the situation when the amount of oil that can be extracted from the earth in a given year begins to decline because geological limitations are reached. Extracting oil becomes more and more difficult, so that costs escalate and the amount of oil produced begins to decline. The term peak oil is generally used to describe a decline in worldwide production, but a similar phenomenon exists for individual countries and other smaller areas. Continue reading

Corn-Based Ethanol: Is This a Solution?

Many people have high hopes for ethanol made from corn–that it will prevent future gasoline shortages, prevent global warming, be a wonderful investment, and improve the income of farmers, among other things. Other observers raise a whole host of concerns including scalability, impact on the environment, and impact on food prices. Why is there such a huge disparity in views? What is the real promise for corn ethanol?

1. Why don’t we see more stations selling E85 (85% ethanol/15% gasoline mixture)?

In 2006, about 20% of the US corn crop was used to produce ethanol. Even with this huge share of the corn crop, US corn-based ethanol amounted to only about 3.5% of the US gasoline supply by volume, and 2.4% of the supply by energy contribution.

Gasoline with and without ethanol
Even if all the corn-based ethanol that was produced were used as E85, there would not be many gasoline stations selling E85. In fact, only a very small portion of the corn ethanol that is produced is used to make E85 — the remainder is used as a fuel additive, in concentrations up to 10% of the gasoline. Continue reading

Our World Is Finite: Is This a Problem?

We all know the world is finite. There number of atoms is finite, and these atoms combine to form a finite number of molecules. The mix of molecules may change over time, but in total, the number of molecules is also finite.

We also know that growth is central to our way of life. Businesses are expected to grow. Every day new businesses are formed and new products are developed. The world population is also growing, so all this adds up to a huge utilization of resources.

At some point, growth in resource utilization must collide with the fact that the world is finite. We have grown up thinking that the world is so large that limits will never be an issue. But now, we are starting to bump up against limits. Continue reading