{"id":1151192,"date":"2023-02-14T18:12:02","date_gmt":"2023-02-14T23:12:02","guid":{"rendered":"https:\/\/bugaluu.com\/news\/the-us-will-be-dependent-on-oil-for-far-more-than-a-decade\/1151192\/"},"modified":"2023-02-14T18:12:02","modified_gmt":"2023-02-14T23:12:02","slug":"the-us-will-be-dependent-on-oil-for-far-more-than-a-decade","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/the-us-will-be-dependent-on-oil-for-far-more-than-a-decade\/1151192\/","title":{"rendered":"The US Will Be Dependent On Oil For Far More Than A Decade"},"content":{"rendered":"<div class=\"ftpimagefix\" style=\"float:left\"><a target=\"_blank\" href=\"https:\/\/www.zerohedge.com\/political\/us-will-be-dependent-oil-far-more-decade\" rel=\"noopener\"><img decoding=\"async\" width=\"100\" data-entity-type=\"file\" data-entity-uuid=\"6a25b58d-3233-46fe-af01-a9b15f4743ac\" class=\"inline-images image-style-inline-images\" src=\"https:\/\/assets.zerohedge.com\/s3fs-public\/styles\/inline_image_mobile\/public\/inline-images\/2023-02-14_09-26-27.jpg?itok=MctqLXYQ\" alt=\"\"><\/a><\/div>\n<p><span class=\"field field--name-title field--type-string field--label-hidden\">The US Will Be Dependent On Oil For Far More Than A Decade<\/span><\/p>\n<div class=\"clearfix text-formatted field field--name-body field--type-text-with-summary field--label-hidden field__item\">\n<p><a target=\"_blank\" href=\"https:\/\/www.rrapier.com\/2023\/02\/the-u-s-will-still-run-predominantly-on-oil-a-decade-from-now\/\" rel=\"noopener\"><em>Authored by Robert Rapier,<\/em><\/a><\/p>\n<ul>\n<li>\n<p>President Biden\u2019s recent admission in the State of the Union that the United States will <strong>need oil for at least another decade was a significant understatement.<\/strong><\/p>\n<\/li>\n<li>\n<p>While there may be a relatively large reduction in demand in a decade due to the growth of alternatives, the U.S. will remain heavily dependent on oil.<\/p>\n<\/li>\n<li>\n<p><strong>By way of example, in 2014 Norway was where the U.S. is today in terms of EVs on the road, seven years later it had only reduced oil demand by 8%.<\/strong><\/p>\n<\/li>\n<\/ul>\n<p>During President Biden\u2019s 2023 State of the Union Address, he relayed an anecdote that I believe explains his stance toward the oil and gas industry.<\/p>\n<p><strong>At first, he stayed on script with his\u00a0<a target=\"_blank\" href=\"https:\/\/www.whitehouse.gov\/briefing-room\/speeches-remarks\/2023\/02\/07\/remarks-of-president-joe-biden-state-of-the-union-address-as-prepared-for-delivery\/\" rel=\"noopener\">prepared remarks<\/a>, claiming<\/strong>:<\/p>\n<blockquote>\n<p><em>\u201cYou may have noticed that Big Oil just reported record profits. Last year, they made $200 billion in the midst of a global energy crisis. It\u2019s outrageous. They invested too little of that profit to increase domestic production and keep gas prices down. Instead, they used those record profits to buy back their own stock, rewarding their CEOs and shareholders.\u201d<\/em><\/p>\n<\/blockquote>\n<p>As\u00a0<a target=\"_blank\" href=\"https:\/\/www.forbes.com\/sites\/rrapier\/2023\/02\/01\/if-chevron-can-sell-shares-why-cant-they-buy-them-back\/\" rel=\"noopener\">I have noted previously<\/a>, oil companies made substantial increases in capital budgets last year as oil prices rose. The number of rigs drilling for oil has risen sharply, and U.S. oil production last year hit the second-highest level on record. But, President Biden \u2014 who strongly believes we need to bring down our carbon emissions \u2014 doesn\u2019t think we are investing enough in producing more oil, even though 2023 may set a new record for U.S. oil production.<\/p>\n<p><strong>But then President Biden went off script.<\/strong><\/p>\n<p>He said that he had pressed oil executives on the issue of increasing investments, and he said they told him:<\/p>\n<blockquote>\n<p><strong><em>\u201cWe\u2019re afraid you\u2019re going to shut down all of the oil wells and all the oil refineries anyway so why should we invest in them?\u201d<\/em><\/strong><\/p>\n<\/blockquote>\n<p>President Biden said he responded:<\/p>\n<blockquote>\n<p><em><strong>\u201cWe\u2019re going to need oil for at least another decade.\u201d <\/strong><\/em><\/p>\n<\/blockquote>\n<p>The chamber burst into laughter, and then Biden quickly added, \u201cand beyond that.\u201d<\/p>\n<p><em><strong>I think this attitude explains the seeming disconnect in the President\u2019s stance toward oil and gas companies. He and some of his advisors really believe we are going to rapidly phase out oil. He views that as absolutely necessary to address climate change. Thus, in his mind, the oil industry\u2019s relevance is going to soon fade, so there\u2019s no harm in using them as his foil by blaming their high profits for high gasoline prices.<\/strong><\/em><\/p>\n<\/p>\n<p><strong>The reality is that we are going to need oil for a lot longer than another decade. <\/strong>Never mind that there is nothing in the pipeline that is going to displace jet fuel used in air traffic a decade from now. There may be some minor dent in petroleum used in marine traffic by then, but most ships will still run on oil in a decade.<\/p>\n<p>But the widespread perception seems to be that electric vehicles (EVs) are going to substantially displace combustion vehicles a decade from now. That view is also not supported by facts.<\/p>\n<p>U.S. EV share reached\u00a0<a target=\"_blank\" href=\"https:\/\/electrek.co\/2022\/10\/18\/us-electric-vehicle-sales-by-maker-and-ev-model-through-q3-2022\/\" rel=\"noopener\">6% of all new vehicle sales<\/a>\u00a0last year. The goal is to reach 50% by 2030 \u2014 just seven years from now. But that\u2019s new car sales. The number of EVs on the road in 2022 was\u00a0<a target=\"_blank\" href=\"https:\/\/www.caranddriver.com\/news\/a39998609\/electric-car-sales-usa\/\" rel=\"noopener\">only about 1%<\/a>.<\/p>\n<p><strong>Let\u2019s look at Norway as an instructive example.<\/strong> Norway is one of the most aggressive EV markets in the world. In 2014, the country\u2019s EV share on the roads reached 1%. By 2020, new EV sales represented 54% of new car sales in the country. This would be approximately consistent with the goals for the U.S. timeline. In 2021, over 20% of the cars on Norway\u2019s roads were EVs, and in 2022 that number reached 25%.<\/p>\n<p>How did this impact the country\u2019s overall oil demand? According to the 2022 BP Statistical Review, in 2014 \u2014 the year Norway reached a 1% share of EVs on the roads \u2014 the country\u2019s oil demand was 216,000 barrels per day (BPD). In 2021, with a 20% EV share, that number had fallen to 199,000 BPD. (Final full year 2022 numbers are not yet available, but\u00a0<a target=\"_blank\" href=\"https:\/\/www.ssb.no\/en\/statbank\/table\/13585\" rel=\"noopener\">preliminary numbers<\/a>\u00a0show a 0.4% decline from 2021).<\/p>\n<p><strong>That\u2019s a decline of less than 8% in seven years.<\/strong> There\u2019s no question that this is good, and is likely primarily due to the country\u2019s adoption of EVs. But it also doesn\u2019t translate to a major reduction in oil demand. When the President says \u201cWe are going to need oil for at least another decade\u201d, I think he envisions much larger declines than this over the next decade.<\/p>\n<p>Today the U.S. consumes around\u00a0<a target=\"_blank\" href=\"https:\/\/www.eia.gov\/dnav\/pet\/pet_cons_wpsup_k_w.htm\" rel=\"noopener\">20 million BPD<\/a>\u00a0of petroleum products. A 10% decline in this number would reduce consumption back to what we were consuming in about 2012. A large reduction, to be sure, but our transportation infrastructure would still run primarily on oil.<\/p>\n<p><strong>So, make no mistake. We aren\u2019t going to just need oil a decade from now. We are still going to be overwhelmingly dependent on oil a decade from now. Our energy policies should reflect this reality.<\/strong><\/p>\n<p>Go ahead and aggressively try to speed up this transition, but also recognize that oil will still be our most important commodity in a decade; probably even two decades from now.<\/p>\n<p>The Biden Administration should <strong>recognize this and cease the hostility<\/strong> toward this critically important U.S. industry.<\/p>\n<\/div>\n<p>      <span class=\"field field--name-uid field--type-entity-reference field--label-hidden\"><a target=\"_blank\" title=\"View user profile.\" href=\"https:\/\/cms.zerohedge.com\/users\/tyler-durden\" lang=\"\" class=\"username\" xml:lang=\"\" rel=\"noopener\">Tyler Durden<\/a><\/span><br \/>\n<span class=\"field field--name-created field--type-created field--label-hidden\">Tue, 02\/14\/2023 &#8211; 22:05<\/span><\/p>\n<p>From:<a href=\"https:\/\/www.zerohedge.com\/political\/us-will-be-dependent-oil-far-more-decade\" target=\"_blank\" title=\"The US Will Be Dependent On Oil For Far More Than A Decade\" rel=\"noopener\">Zerohedge<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The US Will Be Dependent On Oil For Far More Than A Decade Authored by Robert Rapier, President Biden\u2019s recent admission in the State of&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1151192","post","type-post","status-publish","format-standard","hentry","category-news","wpcat-1-id"],"_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1151192","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/comments?post=1151192"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1151192\/revisions"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1151192"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1151192"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1151192"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}