Should the U.S. join OPEC? After all, the U.S., home of the never-ending calls for “energy independence,” is an oil exporter. A big one.
Through the first six months of 2009, America’s daily exports were averaging 1.9 million barrels per day.[i] At that level, U.S. oil exports are on a par with countries like Angola and Venezuela.[ii] Of course, the vast majority of those exports are refined products, not crude. And those exports are also largely a function of America’s position as the world’s largest oil importer, which means that OPEC membership is rather unlikely.
Nevertheless, the fact remains that the U.S. is an integral player in the oil market. And there has never been a bigger, more global, more integrated, more transparent market than the modern crude oil and oil products market. And America’s role as an oil exporter should put paid to the continuing calls from both the Right and the Left for the U.S. to secede from the world oil sector. Energy Information Administration data show that rather than seceding from the global oil market, the U.S. is playing a bigger role than ever before and that the U.S. refining sector is bolstering its role as a global player in manufactured goods.
In 1998, the U.S. was exporting about 945,000 barrels of oil and refined oil products per day. By 2008, the U.S. was exporting nearly twice that amount, some 1.8 million barrels per day.[iii] What about imports over that time period? Well, while imports rose, exports rose even faster. In 1998, U.S. crude oil and petroleum product imports averaged 10.7 million barrels per day. By 2008, that number had increased to 12.9 million barrels per day.[iv] Thus, while total U.S. imports increased by 2.2 million barrels per day, or about 20%, over that time period, the amount of U.S. exports of refined products doubled, to about 1.8 million barrels per day.
Annual U.S. Crude Oil and Refined Products Exports, 1973 to 2008 (Click on graph for a more sharply focused image.)
The bulk of those exports are coming from refineries along the Gulf Coast. According to the EIA, about 1.17 million barrels per day of exports in 2008 were coming from PADD 3, the Gulf Coast region. That’s more than double the 515,000 barrels per day that was being exported from the Gulf Coast back in 1998. The other big increase in exports came from PADD 1, the East Coast, where exports soared, going from about 40,000 barrels per day in 1998 to 196,000 barrels per day in 2008.[v]
These numbers completely undermine the claims being put forward by the most persistent advocates for “energy independence.” Perhaps the highest-profile advocate for that claim is former CIA director James Woolsey. Woolsey and his neoconservative allies have written several articles, and have even recently published a book, claiming that the U.S. should take the lead by, as they put it, “turning oil into salt.” Their claim: oil’s importance as a strategic global commodity would end if only the U.S. would get more aggressive in its use of plug-in hybrid-electric vehicles, as well as the use of more “methanol, butanol, and other alternative fuels produced from grasses and even waste.”[vi]
While Woolsey and his allies are focusing on turning petroleum into various condiments, a look back at the federal efforts to create alternatives to petroleum shows an unbroken record of failure, i.e., the Synthetic Fuels Corporation and the corn ethanol scam.
Most of the energy talking-heads on TV and elsewhere (T. Boone Pickens, Thomas Friedman, etc.) talk only about U.S. oil imports. Few analysts bother to look at the amount of oil leaving U.S. ports. Fewer still bother to look at just how many trading partners the U.S. has when it comes to oil and oil products. And the U.S. has a lot of trading partners. In 2007, when you count crude oil and all other oil products, the U.S. imported oil from 90 different countries.[vii] That same year, the U.S. exported oil and oil products to customers in 73 countries.[viii]
The fundamental point here is obvious: the U.S. cannot secede from the global oil market. It has been a major player in the global oil market for nearly 100 years, and it will continue being a major player for decades to come. So much for “energy independence.”
[vii] E.I.A. data. Available: http://Countries from which U.S. imports oil and oil products.
[viii] E.I.A. data. Available: http://Countries to which U.S. exports oil and oil products.