Syed Rashid Husain

 The writer is Vice President of Al-Khobar-based Al-Azzaz Est., eminent journalist and energy analyst. He writes a popular weekly column   ‘Energy Outlook’ for Saudi Gazette and also contributes to Pakistan’s Dawn and the BBC.

US Domestic Demand Will Remain Double The Domestic Supply

by shariff mohammed | Apr 15, 2018

From, the quest of energy independence to ‘energy dominance,’ the U.S. has travelled a long distance. Rather than seeking, energy independence, as his predecessors were seeking, President Donald Trump in his first State of the Union address hinted at the possibility of U.S. energy dominance, underlining that the ‘war’ on American energy was over. “We have ended the war on American energy and we have ended the war on beautiful, clean coal.”

With the new found U.S. energy resilience, this was all President Trump had to say about energy in his address. Times have indeed changed. Energy is no more the crowd puller in Washington, as it used to be in the gone by days.

With domestic output crossing the 10 million barrels per day (bpd) mark last November - highest in seven decades - the U.S. is now lining up among the top crude oil producers. The U.S Energy Information Agency recently reported the U.S crude output touched 10.25 million bpd last January. And the momentum continues. By the end of the year, the U.S. expects to touch the 11 million bpd mark. In fact, the US Energy Information Agency (EIA) had underlined only last December, that the U.S. crude oil and petroleum products exports had more than doubled between 2010 and 2016.

The jump in U.S. crude output carries significant geopolitical consequences too, none can deny. The decision of the Trump administration to move the U.S. embassy in Israel from Tel Aviv to Jerusalem is a manifestation of the new-found belligerence, in Washington’s attitude towards the Middle East. Courtesy the shale revolution, Washington now finds itself much more independent to make its decisions.

But the so-called energy independence or ‘dominance; as Mr. Trump prefers calling it, doesn’t provide the U.S. greater immunity against the ups and downs of the energy world. "Sure, the more oil you produce, the more insulated you are against a supply disruption, a physical shortfall in supply," Antoine Halff, the director of the global oil markets program at Columbia University's Center on Global Energy Policy was quoted by Platts as saying. But that is not enough. "No country is an energy island, no matter what the consumption levels are, no matter what the supply levels are," Halff added.

Despite the spectacular growth in U.S. output in recent times, domestic demand in the country will remain roughly double the domestic supply. As per EIA projections, crude oil production in 2018 is to average 10.27 million bpd while total consumption is to average 20.31 million bpd.  And in the process of achieving the so-called ‘energy dominance,’ the U.S. is giving up its leadership role in many areas. Trump's claim of ending "the war on American energy and on beautiful clean coal" is likely a reference to his plans to repeal Obama's implementation of carbon emissions restrictions on coal-fired electricity plants.

The decreasing US dependence on imported oil had other connotations too. Interestingly, the mention of energy in his State of the Union address was almost in passing. As compared to it, his predecessors had used the occasion to emphasize on energy independence.

"The all-of-the-above energy strategy, I announced a few years ago is working, and today, America is closer to energy independence than we've been in decades," President Obama said in his State of the Union address in January 2014, doubling down on an energy agenda that included elevated oil and gas production along with action on climate.

President George W. Bush in his January 2007 State of Union address was seen clamoring for energy independence. “For too long our nation has been dependent on foreign oil. And this dependence leaves us more vulnerable to hostile regimes, and to terrorists who could cause huge disruption of oil shipments,” President Bush said, proposing to double the quantity of oil in the Strategic Petroleum Reserves of the country.

With climate change environment pushed to sidelines now and Kyoto no more on the priority list of the Trump administration, we now seem to be living on a completely different planet. The sole surviving superpower of the world is no more interested in leading the world from the front on issues that plague it today. And the so-called energy independence, or energy dominance’ if one wants to term it so, has contributed to this state of affair!

Send your Comments


      Print                     Subscribe

Follow Us


More ad in this place