May 31, 2012

AN EVER MORE UNIPOLAR WORLD:

Center of gravity in oil world shifts to Americas (Juan Forero, 5/25/12, Washington Post)

Oil produced in Persian Gulf countries -- notably Saudi Arabia, Iran, the United Arab Emirates, Kuwait and Iraq -- will remain vital to the world's energy picture. But what was once a seemingly unalterable truth -- that American oil production would steadily fall while the United States remained heavily reliant on Middle Eastern supplies -- is being turned on its head.

Since 2006, exports to the United States have fallen from all but one major member of the Organization of the Petroleum Exporting Countries, the net decline adding up to nearly 1.8 million barrels a day. Canada, Brazil and Colombia have increased exports to the United States by 700,000 barrels daily in that time and now provide nearly 3.4 million barrels a day.

Six Persian Gulf suppliers provide just 22 percent of all U.S. imports, the nonpartisan U.S. Energy Information Administration said this month. The United States' neighbors in the Western Hemisphere, meanwhile, provide more than half -- a figure that has held steady for years because, as production has fallen in the oil powers of Venezuela and Mexico, it has gone up elsewhere.

Production has risen strikingly fast in places such as the tar sands of Alberta, Canada, and the "tight" rock formations of North Dakota and Texas -- basins with resources so hard to refine or reach that they were not considered economically viable until recently. Oil is gushing in once-dangerous regions of Colombia and far off the coast of Brazil, under thick salt beds thousands of feet below the surface.

A host of new discoveries or rosy prospects for large deposits also has energy companies drilling in the Chukchi Sea inside the Arctic Circle, deep in the Amazon, along a potentially huge field off South America's northeast shoulder, and in the roiling waters around the Falkland Islands.

"A range of big possibilities for oil are opening up," said Juan Carlos Montiel, as he directed a team from the state-controlled company YPF to drill while a whipping wind brought an autumn chill to the potentially lucrative fields here outside AƱelo. "With the exploration that is being carried out, I think we will really increase the production of gas and oil."

Because oil is a widely traded commodity, analysts say the upsurge in production in the Americas does not mean the United States will be immune to price shocks. If Iran were to close off the Strait of Hormuz, stopping tanker traffic from Middle East suppliers, a price shock wave would be felt worldwide.

But the new dynamics for the United States -- an increasingly intertwined energy relationship with Canada and more reliance on Brazil -- mean U.S. energy supplies are more assured than before, even if oil from an important Persian Gulf supplier is temporarily halted.
Enhanced by Zemanta

Posted by at May 31, 2012 5:47 AM
  

blog comments powered by Disqus
« AND ISLAM IS NEXT: | Main | IT IS BETTER TO GET RICH: »