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Wood Mackenzie: North America energy independent by 2020

  • North America will become "energy independent" by 2020 on the strength of the shale revolution and then become a net energy exporter, consultant Wood Mackenzie says in a new report.
  • North America’s energy independence will introduce a new dynamic to coal, oil and gas prices; coal and gas exports will establish a price cap on their respective markets during periods of high demand, and weak oil demand growth will see U.S. tight oil provide a price floor under crude markets.
  • The report says energy independence does not imply a North America entirely detached from global markets; the region as a whole will be dependent on others to clear excess production, and the U.S. will need to import oil for the foreseeable future.
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Comments (38)
  • keentolearn
    , contributor
    Comments (128) | Send Message
     
    Thats good. It will help easing trade imbalances.
    28 Sep 2013, 08:54 AM Reply Like
  • keentolearn
    , contributor
    Comments (128) | Send Message
     
    In his second term campaign, Obama said good days of America are yet to come. This sudden growth may be a part of it.
    28 Sep 2013, 08:59 AM Reply Like
  • nemonemo
    , contributor
    Comments (313) | Send Message
     
    Dream on delusional liberals.
    28 Sep 2013, 09:52 AM Reply Like
  • OptionManiac
    , contributor
    Comments (3304) | Send Message
     
    So you don't believe the article?
    28 Sep 2013, 10:11 AM Reply Like
  • positivethoughts
    , contributor
    Comments (1821) | Send Message
     
    Paid troll for Obama administration.
    28 Sep 2013, 11:11 AM Reply Like
  • The Geoffster
    , contributor
    Comments (4011) | Send Message
     
    Indeed. Obama will encourage more fracking and pipelines. He loves carbon (sic).
    28 Sep 2013, 12:53 PM Reply Like
  • sarichter
    , contributor
    Comments (277) | Send Message
     
    It's a dream come true actually... perhaps you should take your hatred, cynicism, and unfounded bias elsewhere. If you don't like how this country is running you can always move to another one.
    28 Sep 2013, 09:58 PM Reply Like
  • Cliff Hilton
    , contributor
    Comments (1497) | Send Message
     
    Let's don't give credit to the President for anything except for stepping aside and letting the blue collar oilfield hands do what they do best. And let's thank private industry for putting capital at risk and to work.
    28 Sep 2013, 10:11 AM Reply Like
  • positivethoughts
    , contributor
    Comments (1821) | Send Message
     
    The president couldnt run a lemonade stand, let alone assist the oil industry in any way. The man is useless to the nth degree.
    28 Sep 2013, 11:13 AM Reply Like
  • Bryce_in_TX
    , contributor
    Comments (2582) | Send Message
     
    So, what happens to the price of oil if this happens? More production, more supply. Kiplingers is forecasting a 25% to 30% drop in the price from here over the next 5 years. This is gonna be interesting to see how it all plays out.

     

    http://bit.ly/19cPg2a
    28 Sep 2013, 11:09 AM Reply Like
  • Argyll
    , contributor
    Comments (769) | Send Message
     
    Nothing. This is very expensive oil to get. Also, they have to drill a lot more wells because fracking locations run dry quickly. These are not big pools of oil but smaller amounts of oil filled by expensive injection of water, sand, and chemicals to break up rock. Some wells go dry after a few months, some after 12 months. Rare is the one that lasts years. It's expensive to drill and expensive to have to drill more wells, although there appears to be enough oil in the rock to keep doing that for a while and get good production. But it's not infinite.
    28 Sep 2013, 11:43 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4713) | Send Message
     
    Bryce,

     

    I've recently found the forecasts of lower oil prices have failed miserably at predicting the demand side of the equation. As the global economies continue to improve , so will the demand ...
    28 Sep 2013, 12:30 PM Reply Like
  • bigbenorr
    , contributor
    Comments (755) | Send Message
     
    30% wouldn't be so bad. North Dakota was going strong even when Bakken crude was going for 60's-70's
    28 Sep 2013, 01:46 PM Reply Like
  • OptionManiac
    , contributor
    Comments (3304) | Send Message
     
    Yes, the billions of Chinese and Indians who aspire to join the middle-class, we will always need more oil.
    29 Sep 2013, 06:06 PM Reply Like
  • fishfryer
    , contributor
    Comments (2542) | Send Message
     
    If it does happen, how do we justify foreign wars in the Middle East? Without the petrodollar system, we lose reserve status and find a whole bunch more problems. I'm skeptical that the military industrial complex will allow this.
    28 Sep 2013, 11:18 AM Reply Like
  • Val Halla
    , contributor
    Comments (307) | Send Message
     
    it's already happened. we're already a net oil producer (it just doesn't show up in the trade figures because exporting oil and natural gas is illegal.) consumption has collapsed. people really are buying fuel efficient cars. in fact they're now buying cars that use no oil outside of for lubrication. with the price of electricity capped for the forseeable future the competitive value of oil and perhaps even natural gas is being called into question via the grid and Tesla.
    28 Sep 2013, 11:42 AM Reply Like
  • fishfryer
    , contributor
    Comments (2542) | Send Message
     
    Ummmmmm... Ok, sure.
    28 Sep 2013, 02:14 PM Reply Like
  • Val Halla
    , contributor
    Comments (307) | Send Message
     
    no..."fer sure." http://bloom.bg/YwBOTt you have two engineering degrees but still don't know what the EIA is? buddy...get a clue. we've already zoomed past this article. with this Administration going on in on wind power you could see a dramatic fall in energy prices in the USA. remember...natural gas bottomed out at 2 bucks only one year ago. we've got a lot more going for "energy savings" this go around than we did then...not the least being higher interest rates.
    28 Sep 2013, 10:56 PM Reply Like
  • aedius
    , contributor
    Comments (333) | Send Message
     
    We'll be energy independent but "...the U.S. will need to import oil for the foreseeable future."

     

    Perhaps I have a different opinion on what energy independence? As long as we're forced to import oil, we're certainly not energy 'independent.'
    28 Sep 2013, 11:39 AM Reply Like
  • Tack
    , contributor
    Comments (12967) | Send Message
     
    Examining this Administration's policies on coal (usage), oil (drilling and refining), natural gas ("fracking"), energy transportation (Keystone), "climate change," and "carbon footprints," one must wonder how any theoretical "independence" could possibly be achieved, as a practical matter. It's unmistakably clear that as long as liberals control Government, policies will remain are decidedly anti-energy development, despite any "happy talk" to the contrary.
    28 Sep 2013, 11:54 AM Reply Like
  • positivethoughts
    , contributor
    Comments (1821) | Send Message
     
    Exactly. If America could go energy independent, where would all the 'give and take' be exchanged in regards to the middle east and its 'stability'? American governments use the middle east conflict and its oil resources as an excuse to manage and spend in that region. $700 Billion per year on military, $400 Billion on nation buidling and 'assistance'. They wont give that up. The NWO wants conflict, shortages etc. so they can have strife and then, like a drug dealer, provide the 'medicine' the addicts demand.
    28 Sep 2013, 12:37 PM Reply Like
  • PEhrlich
    , contributor
    Comments (1702) | Send Message
     
    That all sounds very positive.

     

    Sure you don't want to exchange the "hello Kitty" avatar for Symbionese Liberation Army logo?
    28 Sep 2013, 02:20 PM Reply Like
  • PalmDesertRat
    , contributor
    Comments (2650) | Send Message
     
    So far I haven't seen anyone who says how long this "independence" will continue.

     

    Given the huge amounts of cheap oil in Saudi, Iraq,Iran etc, vs the expensive short-lived US fracked oil, it's hard to imagine that the US would be independent for more than a few years.
    28 Sep 2013, 02:57 PM Reply Like
  • starboard
    , contributor
    Comments (85) | Send Message
     
    Saudi, Iran, need $80 per barrel in order to meet revenues required to prop up their domestic economies and keep the rioting under control.
    28 Sep 2013, 06:26 PM Reply Like
  • PalmDesertRat
    , contributor
    Comments (2650) | Send Message
     
    Maybe so, but if crude went to $85, Saudi would be ok while the US frackers would be shut down.
    28 Sep 2013, 07:35 PM Reply Like
  • fishfryer
    , contributor
    Comments (2542) | Send Message
     
    Palm, great point. I bet the Saudis can produce crude at $10/bbl. if china builds a few more refineries on the peninsula it will be a strange world.
    28 Sep 2013, 09:40 PM Reply Like
  • bigbenorr
    , contributor
    Comments (755) | Send Message
     
    Ummm, I was working in Williston when WTI was under $85 (with Bakken crude even lower) and we were going strong as ever.

     

    Under $50 might be a concern
    28 Sep 2013, 09:46 PM Reply Like
  • Val Halla
    , contributor
    Comments (307) | Send Message
     
    exactly. these commentators have no idea what they're talking about. interestingly no one talks about BP either which shut in an ENORMOUS amount of production...but still failed to drive the price materially higher last year. "not for lack of trying" of course. if we get the reverse of that this October (suddenly the spigots get opened to start dealing with the competition coming from all electric drive systems) i could very easily see oil dropping to 40 bucks. if the price of those RIN's "normalizes" (as in collapses) won't those investors have to give away product (ethanol) just to meet redemptions? this whole thing in my opinion hinges on windpower. if the rumors are true that if done in the right locations you can produce it to scale and profitably for a penny a kilowatt hour...good luck competing against that. interestingly Wyoming actually taxes its wind energy! that says to me "dead giveaway that windpower is the real deal."
    28 Sep 2013, 11:05 PM Reply Like
  • ComputerBlue
    , contributor
    Comments (706) | Send Message
     
    Morgan Stanley analysts noted recently that the average marginal cost of production from the big unconventional plays is about $64 per barrel (excluding land acquisition costs). Some better than others I'm sure. Are these costs lower?
    29 Sep 2013, 12:12 PM Reply Like
  • bigbenorr
    , contributor
    Comments (755) | Send Message
     
    I haven't compiled huge amounts of data on it, but I figure if it costs about $10M to drill and frack a well in ND (and I think most wells come in lower than that.) and assuming it produces 500k bbls you are looking at $20/bbl. Of course there are other costs to consider, like land cost, royalties, taxes etc. but I have a hard time seeing those items tripling the cost of the well. I don't know, maybe I am wrong but WTI was hanging out in the 70's for quite a while when I was there and things didn't seem to slow down at all.
    29 Sep 2013, 12:31 PM Reply Like
  • ComputerBlue
    , contributor
    Comments (706) | Send Message
     
    Agreed...the market will adjust if this happened..OPEC oil is far cheaper to produce..a sustained and substantial drop in price would kill North A producers.
    28 Sep 2013, 03:43 PM Reply Like
  • Val Halla
    , contributor
    Comments (307) | Send Message
     
    you have no way of knowing this.
    28 Sep 2013, 11:06 PM Reply Like
  • ComputerBlue
    , contributor
    Comments (706) | Send Message
     
    You dont think NA producers would reduce cap ex if oil suffered a substantial drop?
    29 Sep 2013, 12:14 PM Reply Like
  • samuraitrader
    , contributor
    Comments (872) | Send Message
     
    Interesting unintended consequence is that if this becomes reality the US will not be shipping billions and billions of federal reserve notes out of the country. It will stay in the country. Right now we export our inflation by having massive trade imbalances. This would bring the inflation home.

     

    Be careful what you wish for.
    28 Sep 2013, 04:08 PM Reply Like
  • Val Halla
    , contributor
    Comments (307) | Send Message
     
    really? a "sudden change to suprlus" will cause a massive price increase in the USA? i do agree there is little no incentive to want a trade surplus if you're the world's reserve currency. that doesn't mean you don't get the trade surplus anyways however. Venezuela is currently hyper-inflating btw. they do hold the world's largest oil reserves. if they decide to "pay the piper" (as in the Americans) we're talking 8-10 bucks a barrel right now. there is no way the Middle East can compete with that. of course "do you see global production heading to Venezuela as a consequence?" nope. the USA could simply demand flex fuel from Detroit starting next model year (or Detroit could simply volunteer that actually.) if hybrid...Chevy Suburbans lets say...start getting 200 miles per gallon...well, the fuel delivery guy will now have some competition called "you and your car." should be interesting to watch that's fer sure.
    28 Sep 2013, 11:15 PM Reply Like
  • RayZfox
    , contributor
    Comments (31) | Send Message
     
    A free market buys energy from where ever can produce it cheapest. It results in the highest standard of living for the most amount of people. Forced energy independence is not free market and will result in people paying more to subsidize local energy. The result is a lower standard of living for the people living in the United States. January 20th 2017 is Obama's last day in office and it couldn't come soon enough.
    29 Sep 2013, 11:25 AM Reply Like
  • PalmDesertRat
    , contributor
    Comments (2650) | Send Message
     
    Be careful what you wish for. Hilary and/or Biden might be worse. It's unlikely a Republican will be elected any time in the foreseeable future.
    29 Sep 2013, 12:05 PM Reply Like
  • sarichter
    , contributor
    Comments (277) | Send Message
     
    What country doesn't subsidize energy in some form or fashion?
    29 Sep 2013, 12:30 PM Reply Like
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