Talk about energy independence! Gulf Coast states have virtually eliminated imports of light crude oils from foreign countries due to booming U.S. oil production from hydraulically fractured wells over the country’s shale plays.
Gulf Coast states like Texas and Louisiana used to import as much as 1.3 million barrels per day of light, sweet crude oil — more than any other region of the country, according to government data. But now the booming U.S. light crude oil production has rendered imports virtually obsolete.
In 2013, Gulf Coast states, which boast the largest concentration of oil refineries in the U.S., imported a whopping 1.7 million barrels of light, sweet crude oil per day from foreign countries in 2009 to importing just 260,000 barrels per day in 2014. In September 2014, Gulf states only imported 7,000 barrels of light crude per day.
Imports from Africa have seen the biggest declines, according to the Energy Information Administration. The U.S. used to be a major importer of African oil from countries like Nigeria, Algeria and Angola, but regional instability and booming domestic production have meant African oil isn’t as attractive as it used to be.
“African crude oil exports to the United States averaged 170,000 barrels per day (bbl/d) for the first four months of 2014 as rapidly rising U.S. crude production has reduced U.S. refiner demand for imported light sweet crude oil,” according to EIA. “Historically, U.S. refiners have been major consumers of African crude oil, primarily light sweet crude from Nigeria, Algeria, and Angola, with the United States taking 2 million bbl/d, or about one-quarter, of African crude exports as recently as 2010.”
So why the shift away from imported oil? Because light, sweet crude oil that’s made in the U.S.A. is in abundant supply and has made imports of the resource almost pointless. The Permian and Eagle Ford shale basins in Texas have seen booming production and now supply Gulf Coast refineries with all the light, sweet crude oil they could ever want.
U.S. oil production has grown dramatically in recent years thanks to hydraulic fracturing, or fracking — a well-stimulation process where water, sand and chemicals are injected into deep underground rock formations to release oil and natural gas. The practice has been criticized by environmentalists who say it will harm air and water quality.
Despite its critics, fracking has unleashed the country’s energy potential and revived rural economies. But recent declines in oil prices have some worried the fracking boom could soon end.
“The low oil price is bringing to a halt the world’s great engine of supply growth over the last five years,” James Burkhard, head of global oil market research with IHS Energy, told the UK Guardian. “The US upstream is very responsive to changes in price and drilling is likely to slow down further until prices recover.”
“The great revival of US production has been from intensive onshore drilling. These aren’t massive $7bn projects that can’t be stopped: these are mostly onshore fracking that be started and stopped much more easily,” Burkhard said.
Energy experts predict there is an oil price rebound on the horizon, but the question is just when it will happen.
“You do have evidence that future production will be curtailed,” Keith Hembre, chief economist at Nuveen Asset Management LLC, told The Wall Street Journal.
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