Top 10 Sources for U.S. Oil for 2009

It has been two years since I posted the Top 10 oil exporters to the U.S., so I thought I would update that list. In 2007, the U.S. imported just over 10 million barrels per day (bpd) of oil, with our top three suppliers being Canada (1.90 million bpd), Saudi Arabia (1.44 million bpd), and Mexico (1.41). Total oil imported into the U.S. in 2007 averaged 10.0 million bpd. OPEC countries supplied just over half of that – 5.3 million bpd. (All data sourced from the EIA).

Data for 2009 are available through October, so I tabulated the twelve-month period from November 2008 through October 2009. Total petroleum imports were down 7% from 2007 at 9.3 million bpd. Top U.S. suppliers for this time period were Canada (1.94 million bpd), Mexico (1.13 million bpd), and Saudi Arabia (1.09 million bpd).

Top 10 Sources for U.S. Crude Oil in 2009

1. Canada – 1.94 million bpd
2. Mexico – 1.13
3. Saudi Arabia – 1.09
4. Venezuela – 1.01
5. Nigeria – 0.74
6. Angola – 0.48
7. Iraq – 0.47
8. Brazil – 0.30
9. Algeria – 0.28
10. Colombia – 0.25

Observations

Canada remained the top supplier to the U.S., and their total exports to the U.S. actually increased slightly over 2007. Imports from Brazil and Columbia also increased.

OPEC supply was down to 4.6 million bpd, which is lower both in absolute terms and as a percentage of total imports (53.7% in 2007 versus 49.1% in 2009).

Dropping out of the Top 10 from 2007 were Ecuador and Kuwait. Taking their places were Brazil and Columbia.

Even though Mexico regained the 2nd spot from Saudi Arabia, total imports form Mexico fell by 20% over 2007.

The most unusual observation for me was that we actually imported a small amount of oil from China.

The overall theme seems to be that in general suppliers that are closer to the U.S. are gaining market share at the expense of those who have to ship their oil halfway around the world. However, there are a couple of important exceptions to that observation.

Equatorial Guinea did not make the list (15th place), but saw their exports to the U.S. increase by 67% over 2007. This trend could see them move into the Top 10 within a couple of years. Imports from Russia were up 98% over 2007, and they just missed the Top 10 (11th).

My expectation when I update this list again in 2012 is that either overall imports will be up, oil will be over $150/bbl, or both.

72 thoughts on “Top 10 Sources for U.S. Oil for 2009”

  1. With China contracting for huge amounts of oil reserves all over the world, how long will it be before we find it not at all unusual to be buying oil from them? _ JC Sr.

  2. $150 a barrel?

    Well, last time (2008) we got close–and then the price collapsed.
    We know that at any price north of $100, crude demand goes into reverse. And stays down for a long, long time. As in 10 years.

    Crude oil may be north of $150 in Jan of 2012–but it will be a peek-a-boo. (NYMEX is ripe for manipulation, so any price is possible for a while).

    One more price spike and I think customers will be very ready for alternatives–and we have alternatives in spades.

    OPEC faces a challenge–either keep oil cheap and reliable, or watch customers go elsewhere. Each price spike does permanent damage to demand.

  3. I don't believe demand is down all that much Benny. If it wasn't for the subprime and banking fiasco, i believe demand would be every bit as high as it was in 2008.

    I do agree that we won't have $150 for very long, as I do not believe the economy is in recovery mode. I believe we are just as close to the economic cliff as we were in 2007-08.

    OD

  4. AS I commented in RR's previous story, it would be fascinating to see what would happen if the gasoline retailers had to show these sorts of numbers to reveal what % of their product came from where – who would want to buy the oil from China, and which company would want to admit it?

    The price spikes may create permanent demand destruction, and if that's what it takes to really get moving with developing and adopting alternatives, then I say bring it on, and the sooner the better. Necessity is the mother of innovation..

  5. Robert,

    Where does the U.S. fit on that list? How much U.S. production do we export/import to ourselves, and how much U.S. production do we export elsewhere? (I've heard some percentage of our Alaskan oil goes to Japan.)

  6. OD-
    Global demand for oil was softening even before the meltdown. Higher prices were crimping demand. If oil drifts any higher in price, then 2007 will be the year of all-time Peak Demand, and it wasn't much higher than 2006.
    RR's scenario of $150 is necessarily a peek-a-boo. Demand will fall, and ultimately the price. At any price north of $100, we see actual declines in demand. At $80 to $100, I think we see stagnation.
    After the 1979 price spike, demand oil not recover for 10 years, and then only when oil was cheap again.
    We do not know what will happen in China. What if they mandate PHEVs? What if the USA strongly encourages PHEVs and CNG cars?
    Two simple policy changes, and global demand for oil sinks sharply for decades.
    The Peal Oilers have big megaphones, but there are many risks to betting on expensive oil in the long run.

  7. I saw the CEO of Nordic American Tankers on CNBC last year. Funny guy. He was talking about how Chavez will send oil to China,and then it's offloaded to another tanker and shipped to the US. Chavez gets to thumb his nose at the Yankees,and oil tankers get paid to circle the world,instead of traveling a few measly miles. Anyway,that might explain the imports from China.

    This article at Forbes puts 3 of tomorrows' top 5 producing fields in Iraq. #1 is Ghawar,of course. #5 is an Iranian field. No mention of that bad boy off the coast of Brazil.

  8. Robert,I'm pretty sure the Top 10 would look different if we used net import balances. Canada is #1 in both imports and exports of oil to/from the US. Brazil is #8 in the import category this year,but was #5 in US oil exports last year. Maybe they're just short on refineries. Anyway,Brazil is a net oil importer.

  9. I don't think imports will be up in 2012. Frugal is in. Lighting cigars with 100 dollar bills is out. I wouldn't doubt $150 oil though. Or $300 for that matter. If we don't get off oil imports,the dollar will eventually be a viable alternative to toilet paper. It's close enough now.

    We probably ought to consider a price trigger for releasing oil from the SPR. Maybe 250,000 bpd at $100 per barrel. 500,000 at $125 etc. Biofuels will be ramping up,and demand will be ratcheting down. But,it wouldn't hurt to dampen the price shocks a tad. Seems like it would be cheaper than spending our way out of the next recession at any rate.

  10. We probably ought to consider a price trigger for releasing oil from the SPR.

    I absolutely disagree. The SPR should only be used for an emergency, e.g., we get cut off from oil imports overnight. This is just my opinion of course and I know much of congress would disagree with me.

    I'm also not sure I agree with your assessment on the USD. Yes it is toast long term, but currently I do not see another currency that has the capacity to replace it. Most other countries are in the same position or worse. China might be better off now, but if we were to turn to the Yuan they would have to revalue and that would take away their competitive edge.

    OD

  11. The Euro has already replaced the dollar to some extent. And the dollar continues to head south it seems. İ can't understand why but İ suppose that is the reason İ was in engineering and not finance.

    Oil, in Euros, is not all that expensive today. To the customer yes but to the tax man (governments) – no.

    Maybe oil should be released from the SPR if the swallows don't return on time as well.

  12. You don't think an oil spike qualifies as an emergency OD? We know they cause recessions. We know we'll spend trillions on stimulus packages to get out of the next recession. Trillions we might not be able to borrow next time around. Besides,price spikes ARE a result of supply disruptions. Or supply shortages,at least.

  13. "And the dollar continues to head south it seems. İ can't understand why"

    Oil is half the problem Russ. Trinkets from China are the other half. The world is awash in dollars. Oversupply anything and the value goes south.

    With oil,it's a vicious circle. The dollar slips in value and oil costs more as a result. Higher priced oil increases the trade deficit,so the value of the dollar slips again.

  14. No Maury I don't. I consider that a gut-wrenching shock to the economy, but not an emergency.

    Besides, if we use the SPR as a means to bring down prices, the price mechanism that so many seem to think will save the day, will never see the light of day. Well, until the SPR is empty or demand outstrips what we take from the spr.

    OD

  15. Maury wrote: "If we don't get off oil imports,the dollar will eventually be a viable alternative to toilet paper."

    Maury, we have gone over this before — and recently. The US has been spending more importing Chinese consumer goods than importing oil. And let's not even talk about the costs to the US of importing French airplanes, German limousines, and Japanese SUVs.

    If the US elminated ALL oil imports, the US would still be running a big balance of trade deficit.

    That is the problem which has to be resolved. Replacing imports of manufactured goods will create jobs and tax revenues in the US. It will also require much more energy consumption in the US. Large scale energy. 24/7 energy. Nuclear energy.

    As an aside, the dollar price of oil is becoming less relevant — as much a reflection of the declining dollar as of the demand for oil. In 2008, using BP statistics, Europe imported 13.75 Million Barrels of oil per day; the US only 12.87 Million Bbl/day.

  16. "In the project we are announcing today with Growth Energy, we will be substituting a 3.2-liter V6 engine in a one-ton pickup truck usually powered by a 6.0l V8 gasoline or a 6.6l diesel engine. The reason we are doing this is that while the engine test results speak for themselves, there is no substitute for experiencing in a vehicle the benefits of uncompromised performance and extremely high fuel economy that can be achieved using a renewable fuel like ethanol in an optimal manner. Moreover, by using a truly flex-optimized engine such as EBDI, the best possible performance and fuel efficiency can be delivered from whichever gasoline-ethanol mix is selected by the driver when next stopping for fuel."

    The Watermelons are going to hate this. A True Flexfuel from Ricardo

  17. The trade deficit has turned very oily lately

    We all know the U.S. is running a big trade deficit. Has been for years. We also know that the U.S. imports a lot of oil, the price of which has been going up staggeringly fast lately. But how much of a factor is oil in the trade deficit?

    A really big factor, it turns out. Oil imports now account for most of the U.S. trade deficit, which was running at an annualized pace of $717 billion, or 5.05% of GDP, in the first quarter of 2008. Imports of "petroleum and products" accounted for $449 billion of that. Meanwhile, as the chart below shows, the rest of the U.S. trade picture has improved sharply.

    What does this mean? Well, first, that the U.S. economy remains globally competitive and may even be headed for a trade surplus ex-oil within the next few years, barring another investment bubble like houses or tech stocks. And second, that our addiction to oil is costing us big-time. Whether that cost is something we really ought to worry about depends on whether the current high oil price is the artifact of an investment bubble or a sign of things to come. Which is an entirely different topic.

    http://tinyurl.com/yfa8kbx

  18. A lot of those Japanese and German cars are made in the US today,largely because American workers make less.

    60% of the trade deficit is due to oil imports,and 83% of the non-oil deficit is with China. We can either get off the imported oil or drop our wages enough to be competitive with China. Any of you guys willing to work for a dollar a day?

    http://tinyurl.com/la64zc

  19. Europe imported 13.75 Million Barrels of oil per day; the US only 12.87 Million Bbl/day.

    Very interesting. Wonder what the total fossil fuel imports of the US vs EU look like.

    OD

  20. Good News – Ford is hiring

    Not so Good News – $14.00/hr (about half of what the retiring workers hired in at.)

    Ford New Hires

    2.5 Billion Chinese and Indians would be happy to show up at the assembly line for $2.50/hr. You want to make your $25.00 you're going to have to expand your skills. Ten Times

  21. If all of our ethanol was being burned in that Ricardo Engine, ethanol would be right above Nigeria on that list. Or, almost equal to the bottom three.

  22. @Maury – About why the Euro is gaining on the dollar – the European governments financial houses are a mess as well. What İ was pointing out is that apparently the dollar is in a worse position. For most of the past 10 year is has steadily declined.

    İf the Ricardo engine pans out – then maybe so. At present it is a test of two vehicles? İmpressive!

    The time of one sitting on their backside and waiting for the union to improve their lost is done! Like Rufus pointed out to workers, 'your going to have to expand your skills'

  23. Our trade deficit is about twice that of the EU Russ. Oil imports are killing the EU too. Luckily for them,oil isn't priced in Euros though.

  24. Oil imports are one issue where I see win-win-win for the USA, with the least bit of smarts.

    Should we migrate to PHEVs or CNGs, our oil dollars stay home, recirculating in the USA, boosting domestic job growth.
    Meanwhile we would pollute less, cleaning the air, especially in our cities.

    It is a tribute to the feckless nature of our policymakers and voters that we prefer easy street for another year, to the short-term sacrifices that heavy gasoline taxes would bring.

    I favor increasing gasoline taxes at 25 cents per quarter, for four years. This would give time for consumers and manufacturers to adjust.
    The hundreds of billions of extra stimulus dollars would boost our economy without raising taxes–indeed, we could probably eliminate federal income taxes on filers making less than $100k a year.

    This is just so obvious.

  25. Here's a better article on the Ricardo Engine. This one has Numbers

    This Ricardo is a real outfit, guys. They're not just a couple of loons in a garage with a perpetual motion machine.

    This, I believe, is the direction that Ford, GM, and Chrysler are "quietly" moving in.

  26. Rufus~

    The Ricardo engine may or may not do as promised, but what they claim is potentially correct. I can tell you this, they don't know how to write and their press release is full of bazonga. They've used about every hackneyed PR buzzword and phrase that exists: "fully optimized" "sophisticated application" They must have some junior college graduate writing for them.

    _____________________
    The Ricardo EBDI engine addresses this problem by being able to adapt its operation to offer fully optimized flex-fuel performance on any blend of fuel from standard pump gasoline to E85 fuel. It achieves this through the sophisticated application of the latest in boosting technologies, fueling strategy and combustion control, matching the effective compression ratio and in-cylinder conditions to precisely those required for optimal performance and fuel efficiency.

  27. Rufus-

    Why not pure ethanol engines, running on higher compressions?

    Marry those to PHEVs, and now you are talking.

  28. Rufus, that is an interesting article. Ricardo clearly has some experience here but there's a few things about that engine that don't add up, especially for powering a HD pickup.

    Essentially what they are creating is a highly turbocharged engine, and there's nothing wrong with that, race cars use them all the time. But there'sa problem – you get nothing much out of the turbos at low engine RPM's, and for an HD pickup, pulling a 10,000lb trailer from a standing start, you need low end torque, like diesel. They do promise diesel like torque, but at the middle/upper end of the rpm range.

    Also, using a gasoline engine block for diesel like cylinder pressures will cause problems. Diesel engines are heavy as they are built heavy to take high pressures. BUild it too lightweight and you will have durability problems.

    I'm not saying they shouldn't proceed with this, and this is closer to my view of the ultimate flex fuel vehicle (variable compression to optimise ethanol/NG fuels)but that's a lot of hype when they haven't even built 2 prototypes yet.

    They have a good team and if anyone can do it, it's probably them. They just seem to following the same path of grandiose announcements about what they are going to do, rather than what they have done. I look forward to when the prototypes are up and running.

  29. Benny, I'l see your 25c/gal gas tax and raise you to $50/ton carbon tax. I like Jeff Rubin's concept of a carbon tax, on all fuel usage AND on the carbon used in the manufacture of any imported goods.

    US steel makers already use half the carbon per ton of chinese ones, and many other domestic manufacturers are similarly more carbon efficient. Having the carbon tax, across the board, give the advantage to local mfrs as they are more energy efficient, and don't have to ship stuff across the world.

    The carbon tax gives predictable pricing, can't be manipulated by Wall St traders etc, and everyone can see the carbon tax amount in everything they buy. Renewable fuels, such as ethanol, would still have a carbon tax, if they used an carbon fuels in their inputs, though it would be less than gasoline.

    The carbon tax gives the edge to energy efficiency (something in which US manufacturing is a world leader) over low wages, something the US is the world's worst. Doesn't mean the auto workers can stay on at $50/hr, but it does mean that at normal wages, the manufacturers can be competitive again.

    And we will see substantial reductions in energy (and goods) imports along the way.

  30. They're engineers, Wendell. Enuff said, right?

    Benny, there's just not enough E85/blender pumps in the U.S., yet. The crash in oil prices, plus UL's games, put the build-out way behind schedule. Look for the pure E85 engines in five, or six years.

    In the meantime, they'll marry the ecoboost/Ricardo technology with "displacement on demand" to accomplish the same thing, plus the ability to run gasoline.

    The ecoboosts, and the new ecotecs will start exhibiting "Ricardo-type" technologies in a year, or two. And, they will be married up with PHEVs at about the same time. For instance, Ford is doing a "flexfuel" Escape Hybrid, which will be followed by a flexfuel Escape PHEV, which will be followed by a "Ricardo-type" flexfuel Escape PHEV probably around the 2013 Model Year.

    It's all coming.

  31. Why not pure ethanol engines, running on higher compressions?

    Benny~

    Of course that's the way to go for optimum efficiency and performance from ethanol, but an engine designed for optimum performance on ethanol couldn't burn anything else — except perhaps for methanol.

    Without a dense network of fuel stations where one could buy pure ethanol, a car with an all-ethanol engine would be limited to only a small area where that fuel was available.

    It's true current flex-fuel engines don't make good use of ethanol, but right now they're a necessity because gasoline and low ethanol blends are by far the the primary fuel available.

  32. "Why not pure ethanol engines, running on higher compressions?"

    They don't want to go this route, as then the car can't run on gasoline, at all. In doing so you are making the driver totally dependent on a fuel that is not widely available (yet) in pure form. This is the main reason why propane and CNG vehicles have had limited uptake.

    Problem is, by maintaing this "backwards compatibility", to steal a computer phrase, you are limiting the ability of your new system. Microsoft can force everyone to update the systems, but the ethanol industry can't force all the gasoline retailers to add E100 pumps, at least, not very quickly.

    But a pure ethanol, or ethanol/CNG engine, could have diesel like compression, and diesel like efficiency. You could even use existing diesel engine blocks, you just need different fuel systems. That is the direction I would go if I was the mfr, at least to start with.

    Take that diesel HD truck, and modify it's engine for ethanol/CNG. Demonstrate it driving on four of the eight cylinders to prove the point, and go from there.

  33. Paul, their Two parallel, sequential turbochargers are addressing the rpms pretty good, I think (I'm not a combustion engineer – or even a "gearhead," though.)

    Using E85, for maximum torque, the driver would have a peak torque of 660 lb-ft (895 N·m) and more than 500 lb-ft (678 N·m) of torque over a 3,600 rpm band (approx 1,400-5,100 rpm). Using E0, the torque would be 14% lower.

    They DO have 700 Hours of testing on the Engine. I guess that's Not a Whole Lot, but it's not just some lines, and numbers on a piece of paper, either. I think that if I were a "bettin man," which I am, btw, I would rather bet on'em than agin'em.

    We'll see, eh?

  34. Wendell, that high compression engine could also burn natural gas, or propane, in any combination with ethanol/methanol.

    And if you are using ethanol or methanol without the gasoline blend, it does not have to be anhydrous ethanol, which makes it cheaper to produce. Theoretically, you could have up to 50% water content without compromising btu/mile.

    If you really wanted to get fancy, you could use an on board reformer to extract the hydrogen from the gasoline, and then burn that in the same engine. The oil industry looked into this for a way to run hydrogen fuel cells, but gave it up when they realised H fuel cells for cars likely won't happen at all. I wouldn't go this way though – it would be complicated.

    GM promotes their cars as "from gas friendly to gas free", and this sort of "any fuel but gasoline" flex fuel vehicle would be a great example of that, just getting people to buy it might get off to a slow start – but I would buy one, as would a lot of fleet buyers

  35. Rufus,

    Well if that's what the data says, then that's what it says. Real world testing, stop/start, light/heavy load will tell the story, but agreed, the fact that they have got something running is a big step. I would like to see it succeed.

  36. BTW, Delphi is going to offer "heated injectors" in 2011. That will make a lot of difference in what ethanol mixes can be used, and where.

    Right now, you need 30% gasoline in the North in Winter for good "cold-start" operation. The Heated Injectors will have an effect on that.

  37. …that high compression engine could also burn natural gas, or propane, in any combination with ethanol/methanol.

    Paul~

    Correct, I forgot to mention those. Although a better route to using natural gas (methane), propane, or methanol might be to use them in fuel cells. It's technically possible, it's just that fuel cells are so darn expensive.

  38. That Mexico number isn't a "Net" number is it?

    No the numbers aren't net. They are simply our petroleum imports. I will try to break the numbers down in more detail in the near future.

    Lots of other comments to answer here (that Ricardo story is probably post-worthy), but I am short on time for a few days. Heading to the mainland and on to Europe in a couple of days.

    My first Forbes essay went up today:

    http://bit.ly/9HVcni

    RR

  39. Wendell,

    Currently, fuel cells are an order of magnitude more expensive, and their durability in automotive use is unproven.

    The thing I really like about the "anything but gasoline" engine, is that it uses all the fuels America has lots of, or can produce locally, and none of the fuel that is imported. It would be an ideal engine for farmers too.

    If there was a carbon tax in place, this engine would pay less tax per mile than anything else…

  40. OD asked: "Wonder what the total fossil fuel imports of the US vs EU look like."

    OD – the EUtopians are by far the largest fossil fuel importers in the world. By far!

    The EU imports about as much oil as the US. The EU imports a lot of gas (from friendly Russia and stable Algeria), while the US has historically imported only a little (mainly from Canada). And the EU imports vast quantities of coal, from as far away as Australia.

    EU is the hands down winner in total fossil imports. And they do that despite having high taxes and an overwhelming attitude of moral superiority. There is a message there, if people are smart enough to learn it.

  41. EU is the hands down winner in total fossil imports.
    There are also more people in the EU. So correcting for population would be the first step.

    Also: is oil imports really the relevant metric? What does that make oil exporters? Model global citizens?

    Sounds about right. Convert to Islam! You too could have several wifes and emulate your favorite sheik…

  42. You don't think an oil spike qualifies as an emergency OD? We know they cause recessions.
    No, we don't. As recent experience shows, theories and models can be dangerous to your economic health… And the better the theory, the more dangerous it is.

    We do know that when ill-advised prostitutians interfere with the free-market, as clever Mr. Nixon did during the 70s oil price spikes, we get utter chaos.

    Opening the SPR at a given price would result in similar chaos.

  43. Maury quoted Time/CNN: "The trade deficit has turned very oily lately"

    Let's say that again. Maury quoted Time/CNN. Time/CNN! That, Maury, is equivalent to climbing onboard the Titanic.

    Let's set aside Time/CNN's brain-dead leftist ramblings, and look at actual data for 2008 from http://www.census.gov and http://www.eia.dow.gov.

    (Maury, Time/CNN's selective use of a very short recent period when consumer goods inventories were being depleted because of economic catastrophe is reminiscent of some of RR's discussions with Rufus. Let's use full year 2008 – when oil prices were high and before the economy tanked).

    In 2008, the US had a deficit in goods & services of $696 Billion – a staggering sum, representing millions of lost jobs and billions of lost US tax revenue. Let's hope Obama is paying attention.

    The $696 Billion deficit represented the difference between exports of $1,827 Billion and imports of $2,523 Billion. Imports from China alone amounted to $338 Billion.

    Imports of crude oil from all countries cost $354 Billion – about as much as imports from China alone.

    Gross imports of crude oil and petroleum products amounted to $450 Billion — less than the overall trade deficit of $696 Billion. Totally eliminating oil imports in 2008 would have still left the US with a staggering trade deficit of $246 Billion.

    Any way you cut it, the US trade deficit has a lot more to do with the past exportation of industry & jobs than it has to do with the importation of oil.

    And why did jobs & industries get exported? Part of it is wages & economic advantage, of course. But a lot of it is the burden of excessive regulation imposed by the Political Class — the Enemies of the American People.

    And people want to feed the Political Class through higher taxes on energy? Talk about a recipe for disaster!

  44. Optimist made excuses: "There are also more people in the EU."

    Optimist — it is so last Century to worship the EUnuchs! They have feet of clay, as any objective observer can tell.

    The fact of the matter is that the EU is by far the world's largest fossil fuel importer. That was what the question was about. And the absolute magnitude of imports does matter.

    Yes, the EU uses less energy per capita than Canada, The EU also uses a hell of a lot more energy per capita than Bangladesh.

    So what does that mean? That EUnuchs should stop being so supercilious and should cut their energy use severely to match Bangaldesh's?

    Or does it really mean that the human race faces a supply side challenge on power supplies? Does it mean we should quit listening to granola's riding their titanium-framed bicycles on synthetic rubber tires over roads paved by giant diesel-fueled equipment, and instead focus on how to expand global power supplies?

  45. "Gross imports of crude oil and petroleum products amounted to $450 Billion — less than the overall trade deficit of $696 Billion."

    That's 2/3's of the trade deficit Kinuach. It's not chump change. It's more than the GDP of a lot of third world countries,and even some developed nations. A lot of cold,hard cash flowing out of the US year after year.

  46. Kinu bitched: it is so last Century to worship the EUnuchs! They have feet of clay, as any objective observer can tell.

    Actually it is so last century to complain about the EUnuchs and their superiority complexes. Americans have been doing that since before the foundation of their state.

    The fact that the Septic Tanks are RIGHT about a subset of snobbish EUnuchs is neither here nor there. Both sides of the pond have turned their ill-informed noses up at each other since time immemorial.

    (Makes me wonder if noses evolved around the time the Atlantic was opening up).

  47. RR wrote: "The overall theme seems to be that in general suppliers that are closer to the U.S. are gaining market share at the expense of those who have to ship their oil halfway around the world."

    I wonder if that trend can continue. Isn't Mexico struggling to keep output up for geological reasons (e.g. Cantarell) and Venezuela might struggle for political reasons (read: mismanagement)?

  48. Good number finding Kinu, in keeping with RR's dictum of "let's start with the data". I find the most interesting part is that imports from China are only 13% of all US imports – from the attention china gets, I thought it would be much higher.

    I think that to say the oil imports are the majority of the deficit is a bit misleading. Assuming the remainder of imports are "goods", if the amount of imported goods dropped by $696Bn tomorrow, there would be no deficit, yet oil imports would be the same. So if it's possible to have zero deficit with today's level of oil imports, it is unreasonable to say that today's level of oil imports are responsible for most of the deficit.

    A more interesting comparison would be what % of imports did oil represent 10 or 20 years ago. It is possible that growth in other goods has outstripped oil, in which case oil is definitely not the culprit.

    While the US uses more oil per $gdp than Europe, they both have about the same IMPORTED oil per $gdp. Also, the US imports 75% of its oil, and Europe more than 90%, so the EU is clearly more dependent upon world oil trade.

    Finally, to single out the US in comparison to Europe is a little unfair. Since Europe is a collective of closely integrated economies, we should include Canada and Mexico with the US, as both are as integrated to the US economy as the Europeans are to each other.

    If we do that, using the EIA's 2008 data, N. America consumed 23.8 mbd and imported 8.7mbd. So while it is styill dependent on oil, it is clearly much less dependent on intercontinental oil trade than Europe.

    This suggests, as Kinu would agree, that Europe has much more to lose from future world oil shortages and/or price increases than N. America.

    And, I can see why the US would prefer to buy from closer sources. Just wait until the Somali pirates blow up a tanker in the Gulf of Aden. If the middle east is cut off/isolated, Europe will grind to a halt, while N.America will merely slow down. What would happen to China is a much more interesting question…

  49. "If the middle east is cut off/isolated, Europe will grind to a halt, while N.America will merely slow down."

    While I am not a fan of the Europeans (at least, not those with their noses in the air), that is probably not what would happen in the event of the closure of the Straits of Hormuz.

    First, oil truly is a global market. A tanker from Venezuela can head for Europe as easily as for the US — and for China with only a little more trouble. Consequently, shortages anywhere would soon influence prices everywhere.

    Second, there are international agreements on oil sharing and on opening strategic oil reserves. What would actually happen in an extreme event remains to be seen, but in principle we would all share the pain.

    Europe's great exposure is in natural gas delivered by pipeline from Russia and Algeria. That is why Germans have a policy of shutting down their nuclear plants and expanding their use of natural gas. Seriously! And yet there are still those deluded souls who think that the EU has anything to teach the rest of the world about energy.

  50. "there are international agreements on oil sharing and on opening strategic oil reserves."

    I did not know that.

    The point I was making, is that N. America could survive a crisis just relying on its own production, no transocean shipping required.

    I find it hard to believe that the agreements would require N. America to export oil in the event of a crisis. I'm sure the US would go to its usual strategy of exporting the military instead.

    Agreed that prices would go through the roof, but the $ spent by US would stay in N.America, while Europe would be losing huge sums on overpriced imports. I also expect we'd see an Alaskan highway style effort to increase oilsands production in that scenario.

    Europe certainly does not have anything to teach about energy independence.

  51. Rufus said Using E85, for maximum torque, the driver would have a peak torque of 660 lb-ft (895 N·m) and more than 500 lb-ft (678 N·m) of torque over a 3,600 rpm band (approx 1,400-5,100 rpm).

    That would put the engine in the field of the next engine up; 6.6L turbocharged Duramax. TBH this maybe what they should be testing against as the standard 6 L is not 'charged' but there is not enough info to say really.

    I would also have to wonder on the ability of the two turbochargers to keep those levels. As was said there will be low level torque performance issues if you are relying on this system. I would also expect torque response to be somewhat… slow.

    But as a start the numbers are at least up there with existing technologies.

  52. "I find the most interesting part is that imports from China are only 13% of all US imports "

    And almost no exports. We've got to export another $700 billion annually to balance the trade gap. Do you think China can eat that much corn? Will Europe buy that much more coal? If China played fair on trade and the US didn't have this oil addiction,there would be no trade deficit.

    Instead,we're doing this slow,inexorable slide into a third world basket case. And we ain't seen nothing yet. When peak oil sends oil prices into the stratosphere,the US dollar won't be able to buy a piece of bubble gum. But hey,let's not change anything. Better to just sit back and enjoy the ride.

  53. I tend to agree with Benny. Once the price of oil goes much above $100, demand starts going down pretty quickly.

    Secondly, I live in the Houston, TX area and work with most of the major oil companies, mainly on the refining end. Even THEY are expecting lower demand levels and are taking steps to diversify their long term holdings.

  54. "If China played fair on trade and the US didn't have this oil addiction,there would be no trade deficit"

    China and oil between them make up $696 of the $2530bn, or 27%. That means there is a hell of a lot of other stuff being imported from elsewhere, so I would be looking at other places to reduce imports.

    Something else to keep in mid, with imports from China, you probably get more stuff for your dollar than anywhere else.

    As for playing fair on trade, every country does things to subsidise/protect/enhance their industries. The US just gave $50bn to car companies and $700 billion to banks and AIG. How are foreign banks operating in America supposed to be able to compete with that?

    Nobody forced anyone to buy anything from China, that was all companies making their decisions as they see fit, which is how the US(and most other country's) economy works.

    China has out competed the US in business, thye not only have cheap labour, they have cheap land and low overheads – they don't pay their teachers, firemen and plumbers $100k/year. Neither do they spend ridiculous $ on lawyers and doctors, or support a massive entertainment and professional sports industry. As long as America insists on carrying these costs, it will always be an expensive place to operate.

    High energy costs will actually help, as it makes everyone else expensive too. And other than oil, America does have lots of energy.

    For all it's problems, America still has lots of intellectual capital, and I still regard it as being the second most innovative country in the world. If the people are prepared to give up some luxuries, and accept lower wages, at all levels, (as was done in WWII) then America will come through. It will take some collective effort, and collective sacrifice. China is good at doing that, but America today can't do "collective" anything, people want to make the effort but are relegated to the role of "consumers" not "producers" and no one, from the top down, seems to be prepared to give up anything.

    If America wants to blame anyone for its trade deficit, it should look in the mirror.

  55. If the US didn't have this oil addiction…

    Maury,

    We don't have an oil addiction, we have an energy addiction, it's just that for about the last 110 years, oil has been the best,* least expensive, most energy dense source of energy offering the best EROEI.

    Unless we all want to start living like the Amish, there won't be an end to our energy addiction. As a rule of thumb, there is a direct correlation between energy consumption and standard of living. And as Jevon's Paradox states so well, even as we learn to use energy more efficiently, we will also increase our energy consumption.

    ________________
    * "Best" if you discount the environmental effects of burning hydrocarbons and that it is theoretically a finite source of energy.

  56. "China and oil between them make up $696 of the $2530bn, or 27%. "

    China and oil account for the entire trade deficit. How can you say China out-competed the US Pete? They keep their currency ridiculously low to make their goods cheaper,and ours more expensive. They directly subsidize exports. Put large tariffs on imports. They don't play fair on trade. And Congress doesn't seem to care.

    "We don't have an oil addiction, we have an energy addiction"

    I'm just suggesting we put the patient on methadone Wendell. Don't really care if it's coal,nuclear,ethanol,or whatever. That oil is gonna kill 'em someday.

  57. Paul wrote: "China has out competed the US in business, they not only have cheap labour, they have cheap land and low overheads …"

    Let's not forget the main advantage that China has — they don't have the excessive regulation that the US has built up since the 1970s. Excessive regulation which makes the US too risky a place in which to invest. Excessive regulation which has killed jobs and cut government tax revenues.

    Good side of that is, when push comes to shove, excessive regulation can (and will) be killed. But the situation has to get worse first.

    A couple of other advantages that the Chinese have had is (1) the willingness of US politicians, from Bill Clinton downwards, to be bought; and (2) the baleful effects of Political Correctness on the US educational system since the 1970s. Again, both are correctible – and will be sorted out once the situation is dire enough.

    We can learn from the Chinese. I like the Chinese system for getting good performance from state bureaucrats. Shoot a few of them when they screw up. Now there's a policy we could all get behind!

  58. "How can you say China out-competed the US Pete?"

    I think you meant "Paul", Maury, but I'll answer anyway. China's in the WTO so has to play by the rules, by and large. It implemented WTO rules over a period of years, and is still in violation of some of them, but that'll get ironed out presumably. So I think your point about not playing fair on trade doesn't hold up particularly well.

    How does China keep its currency low, relative to the dollar? Well, primarily by holding lots of dollars. And how does it acquire them? Because YOU AMERICANS have such a vast trade deficit with them. In return for its trade surplus and currency advantage, China suffers quite high inflation. This lowers Chinese wages in real terms.

    At the end of the day, it boils down to pretty much one thing: Chinese workers work for less than American ones. You have four choices: a) have Americans work for less, or b) impose your own barriers to trade ( – probably illegal under your own WTO agreements), or c) convince Americans to voluntarily buy less goods or pay more for American-produced ones ( – unlikely to work), or d) continue as you are ( – bad in the long run). It's probably as simple as that.

  59. How does China keep its currency low, relative to the dollar? Well, primarily by holding lots of dollars. And how does it acquire them? Because YOU AMERICANS have such a vast trade deficit with them.

    Really? They didn't have vast holdings in the early 1980s when they decided to peg the yuan to the dollar at an incredibly low rate. The US China trade deficit was also non-existent. It's only been the past decade that Chinese US debt holdings and trade deficit have really taken off. But yet they have kept their currency pegged incredibly low to the dollar for almost 30 years.

    This is something straight out of the beggar-thy-neighbor playbook and China is winning.

    OD

  60. "This is something straight out of the beggar-thy-neighbor playbook and China is winning."

    Whether China is winning remains to be seen. China has shipped large amounts of real stuff – TVs, computers, you name it – to the US (and to the EU too, but they can fix their own problems). In return, China has accepted a very large amount of IOUs – which Barack Obama may, or may not, honor.

    China could try to sell those IOUs, but who would buy them? And if China sold a lot of them, the value would go down, leaving the rest of China's dollar holdings worthless.

    Doomers tend to worry about future wars over oil. It is more credible that there will be future wars over debt. Five minutes after the outbreak of hostilities between China & the US, those US bonds for which China traded real goods will be revoked. There's something real to worry about, now that the IPCC's scare is discredited!

    The game is far from over, and no-one has it in the bag. About the only confident predictions are that times are going to get tougher, and we should all expect the unexpected.

  61. Anonymous said: "Really?"

    Yes, really. In order to maintain the dollar-yuan peg, China has to keep buying dollars. Without wanting to state the obvious, that's why their dollar holdings are getting bigger.

    Kinuachdrach said: "In return, China has accepted a very large amount of IOUs – which Barack Obama may, or may not, honor."

    It has accepted US government bonds, with the "full faith and credit" of the US government. The virtual guarantee of honouring that debt is what makes it freely tradable without expensive costs like insurance.

    "China could try to sell those IOUs, but who would buy them?"

    They are as exchangable as actual cash. You may not have noticed, but China spent a lot of them buying up real tangible assets all over the world last year.

    "And if China sold a lot of them, the value would go down, leaving the rest of China's dollar holdings worthless."

    That is true.

    "Five minutes after the outbreak of hostilities between China & the US, those US bonds for which China traded real goods will be revoked."

    Five minutes after that, American dollars would be toast for Americans as well as the Chinese, and institutional investors all over the planet. Defaulting on sovereign debt is a fairly nuclear option (short of an ACTUAL nuclear option, of course).

  62. PeteS — we probably see eye to eye on this.

    The probability of the US revoking the IOUs to China is small — except in a war situation, when it would be a 100% certainty.

    On the other hand, the probability of the Obama Administration rendering those IOUs virtually worthless through runaway inflation is unfortunately quite high. Obama's budget calls for the US to spend $2 for each $1 it takes in — which can't end well.

    The full faith & credit of the US government used to be the gold standard. But there is no guarantee things will always be that way. The times they are a'changing.

  63. Here's an interesting thought: My Sweetie, and I, being fairly typical Americans, probably produce about 2 Tons of Waste/Yr.

    That could translate into about 80 miles/week in my Flexfuel. That would just about do us. Jes Sayin.

    Fiberight

  64. That could translate into about 80 miles/week in my Flexfuel. That would just about do us.

    If it's that simple, why haven't you already done it?

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