Why the U.S. Can’t Use the Oil It Produces
Summary
TLDRThis video delves into America's oil revolution, detailing the transition from declining production to becoming the world's top oil producer. It explores the historical context of US oil reliance, the impact of the 1973 oil crisis, and the subsequent drive for energy independence. The script explains the technological advancements in fracking that unlocked vast oil reserves, particularly in shale formations. Despite domestic production surges, the US still imports significant oil volumes due to refining infrastructure designed for different oil types. The video also touches on the complexities of achieving energy independence, emphasizing the importance of energy security and the gradual transition to cleaner energy sources.
Takeaways
- 🇺🇸 The US has been striving for energy independence to reduce reliance on foreign oil.
- 🔍 Contrary to common belief, the world, including the US, has substantial oil reserves expected to last for decades.
- 📈 In the past decade, US oil production has more than doubled, making it the world's leading oil producer.
- 🚧 The US exports a significant portion of its oil, only to import different types of oil, indicating a complex global oil logistics system.
- 🛠 The advent of fracking technology has revolutionized US oil production by unlocking resources previously deemed inaccessible.
- 🚨 The 1973 oil crisis marked a turning point for US energy policy, leading to a focus on energy independence and a ban on oil exports, which was later lifted in 2015.
- 🌐 Geographical and logistical challenges, such as the lack of pipelines in California, affect the distribution and use of domestically produced oil.
- ⚙️ Refineries play a crucial role in determining the types of oil that can be used; US refineries are often equipped for specific types of oil, influencing import and export decisions.
- 🌐 International trade in oil is influenced by the type of oil, refinery capabilities, and economic considerations rather than just availability.
- 🌿 The pursuit of energy security and environmental sustainability is a complex balancing act for the US, as it continues to rely on oil while transitioning to cleaner energy sources.
Q & A
Why did the US focus on energy independence after the 1973 oil crisis?
-The 1973 oil crisis led to a significant disruption in oil supplies to the US, causing gasoline stations to run dry and impacting the economy. This crisis prompted the US to focus on energy independence to reduce reliance on foreign oil and ensure a stable energy supply.
What was the role of George Mitchell in the US oil industry?
-George Mitchell played a pivotal role in the US oil industry by pioneering the successful application of hydraulic fracturing, or fracking, in the Barnett Shale. His innovations made it economically viable to extract natural gas and oil from shale formations, leading to a significant increase in US oil and gas production.
How did the fracking technique evolve to become more effective?
-The fracking technique evolved by incorporating a special water-based mixture to crack open the rocks and drilling horizontally instead of just vertically. These improvements allowed for more efficient extraction of oil and gas from shale formations.
Why did the US lift the ban on exporting oil in 2015?
-The US lifted the ban on oil exports in 2015 due to a significant increase in domestic oil production, largely attributed to the success of fracking. This move was aimed at allowing the US to capitalize on its energy resources and participate more fully in the global oil market.
What is the significance of the Chevron's El Segundo refinery in the context of the US oil industry?
-Chevron's El Segundo refinery is significant as it is one of the largest oil refineries on the US West Coast. It processes a variety of crude oils from different countries, illustrating the complexity of the US oil supply chain and the reliance on international sources despite domestic production.
Why does the US still import oil despite being a significant producer?
-The US still imports oil because not all domestic oil production is located near refineries or the areas that consume it. Additionally, the type of oil produced in the US may not match the specifications required by existing refineries, which are often configured to process specific types of crude oil.
What is the role of pipelines in the US oil industry?
-Pipelines play a crucial role in the US oil industry by transporting crude oil from production sites to refineries. However, the lack of pipelines in some regions, like California, forces the importation of oil to meet local demand.
Why are some US refineries unable to process domestically produced oil?
-Some US refineries are unable to process domestically produced oil because they are configured to refine specific types of crude oil, often heavier types that were historically more prevalent in the US. The shift towards lighter, 'strawberry' oils from fracking has created a mismatch between the oil produced and the capabilities of existing refineries.
What is the concept of energy security, and how does it differ from energy independence?
-Energy security refers to the reliable and affordable access to energy resources to meet the demands of the economy and consumers. It differs from energy independence, which implies self-sufficiency in energy production. Energy security focuses on ensuring a stable supply through diversification, including imports, while energy independence emphasizes producing all needed energy domestically.
How does the US's oil production and consumption impact global oil markets?
-The US's oil production and consumption significantly impact global oil markets by influencing supply and demand dynamics. As a major producer and consumer, the US's decisions on oil exports and imports can affect international oil prices and the strategies of other countries.
Outlines
🚧 America's Oil Revolution and Energy Dependence
The paragraph discusses the historical context of the United States' relationship with oil, highlighting the shift from self-sufficiency to reliance on foreign oil. It mentions the US's initial dominance in oil production and consumption, the rise of Middle Eastern oil producers, and the subsequent increase in US oil imports. The 1973 oil crisis is noted as a turning point, leading to discussions of energy independence. The paragraph also touches on the US's strategic response, including a ban on oil exports and plans for nuclear power plants. The narrative then fast forwards to the 2000s, where technological advancements in fracking led to a resurgence in US oil production, challenging the notion of energy independence due to continued oil imports and exports.
💧 Fracking's Impact on US Oil Production
This paragraph delves into the technical aspects of oil extraction, focusing on the process of hydraulic fracturing or 'fracking.' It discusses the evolution of fracking technology, which enabled the US to access previously untappable oil reserves, particularly in shale formations like the Barnett Shale. The success of George Mitchell's fracking methods in the late 1990s is highlighted as a catalyst for the US oil boom. The paragraph also addresses the economic factors that contributed to the expansion of fracking, such as high oil prices and low-interest rates, leading to a significant increase in US oil production between 2008 and 2018. The lifting of the US oil export ban in 2015 is noted as a milestone in the country's energy policy.
🌐 International Oil Logistics and Refining Challenges
The final paragraph explores the logistics behind the US's oil trade and the refining process. It explains why the US exports a significant portion of its oil production despite having a surplus. The discussion centers on the mismatch between the types of oil produced in the US and the capabilities of its refineries. The US has historically produced and refined a different type of oil than what it extracts today, primarily due to fracking. As a result, US refineries are not always equipped to process the newly available oil, leading to imports of oil that better matches their refining needs. The paragraph also touches on the environmental and economic considerations of building new refineries or retrofitting existing ones. It concludes with a broader discussion on energy security versus energy independence, emphasizing the importance of a stable and affordable energy supply for the US economy.
Mindmap
Keywords
💡Energy Independence
💡Fracking
💡Oil Refineries
💡Barnett Shale
💡OPEC
💡Domestic Oil Production
💡Energy Security
💡Horizontal Drilling
💡Oil Pipelines
💡International Oil Swap
💡Environmental Standards
Highlights
The US aims to reduce reliance on foreign oil and move towards energy independence.
US oil production has more than doubled in the last decade, reclaiming its position as the world's largest oil producer.
Despite increased production, the US still sends away nearly a third of its oil for swapping with other countries.
The US has been historically a major oil producer and consumer, with a growing demand outpacing domestic production.
The 1973 oil crisis led to a significant shift in US policy, emphasizing energy independence.
Fracking technology, particularly the use of water-based mixtures and horizontal drilling, revolutionized US oil production.
The US lifted the ban on oil exports in 2015, leading to a significant increase in production and exports.
Refining is a critical step in making oil usable, and the US has refineries that are not always compatible with domestically produced oil.
Geographical distribution of oil fields and refineries plays a significant role in the US oil logistics.
California, despite being a significant oil producer, relies heavily on foreign oil due to a lack of pipelines and refinery compatibility.
The US oil industry's focus on energy security rather than independence is driven by economic and logistical considerations.
The international cost of oil is a significant factor in gas prices, with the US having limited influence over it.
The transition to clean energy is necessary but must be managed carefully to ensure economic stability and environmental sustainability.
The US continues to drill for oil, which could be beneficial for the world due to its relatively low greenhouse gas emissions from production.
The concept of energy independence is complex and may not be as beneficial as ensuring energy security and affordability.
The book 'Read Write Own' by Chris Dixon discusses the future of the internet and the potential of blockchain to reclaim control for people.
Transcripts
we're closing the border and we're
drilling drilling Drilling and you keep
us moving towards energy Independence
our country must cut back its Reliance
on foreign oil I said we're going to
need oil for at least another decade
see and beyond that we're going to need
it based on how much politicians talk
about oil and using the oil reserves I
always kind of thought the US was
running out we've got a about 35 years
worth of oil left in the whole world but
I couldn't be more wrong in just the 10
years after 2008 the US went from a
place with slowly dropping oil
production to more than doubling its
output and reclaiming its spot as the
biggest oil producer in the world but
there's something peculiar the US is
sending away nearly a third of its oil
just to get it swapped out with oil from
somewhere else this is the story of
America's wild oil Revolution and why it
still won't give the US Energy
Independence this video is brought to
you by Reed W own but more on that a
little later to understand America's
relationship with oil let's start with a
quick crash course so for most of the
last 150 years the US has been the place
to get oil we drilled almost all of it
and we also used the most oil in the
world but in the late 1930s other
countries namely Saudi Arabia and a few
other Middle Eastern countries realized
they also have tons of oil so they
started drilling like crazy around this
time the US starts importing a little
bit of oil but it still drills most of
it itself but America's ravenous demand
for oil to fuel its Planes Trains and
Automobiles can't be contained America's
demand for oil starts significantly
outpacing us production so bring in the
Imports pretty quickly the US becomes
increasingly reliant on foreign oil but
then in 1973 after the US gave money to
Israel Saudi Arabia's enemy in the yam
kapore War they and other AR Arabian oil
exporters were like actually no more oil
for you an Imports slide theil us
doesn't have enough oil to make up for
this loss so there's just no oil for
consumers gasoline stations ran dry
empty gas pumps no more road trips to be
sure that there is enough oil to go
around for the entire winter all over
the country it will be essential for all
of us to live and work in lower
temperatures the problem was so bad that
President Nixon literally told
businesses to stop working if it would
save energy I am directing that the
daytime temperatures in federal Offices
be reduced immediately to a level of
between 65 and 68° and that means in
this room too and with this the US
really starts talking about this thing
called Energy Independence and the US is
crippling lack of it to respond Nixon
bans oil exports from the US and makes a
plan to build 1,000 nuclear power plants
by the year 2000 according to one
estimate if all of these nuclear power
plants were actually built the US would
be able to meet twice its energy demands
in 2022 with no fossil fuel emissions
from the production but instead there's
54 anyway in the meantime the US needs
more oil because those gas engines
aren't going to run themselves but
that's a little awkward because the US
still can't find that oil in its own
soil we start importing more oil from
Canada our pretty peaceful neighbor but
our oil habit still requires we bring in
a bunch from the Middle East it's in
this context slowly getting more oil
from Canada using a lot from OPEC
countries and not getting much here that
perfectly sets up a revolution so as you
can see the line that I'm on right now
is going down and a similar thing is
happening with natural gas the other big
fuel source we use in America that's
collected largely the same way as oil
you'd think that it's going down because
we're out of oil but that's actually not
true at all the US had and still has
tons of oil the problem was we couldn't
get it this is The Barn at shale it's a
giant natural gas reserve around Fort
Worth Texas and in 1995 the US
government said it had just like a bunch
of natural gas in it but it was
unconventional see there are two ways
that things we want tend to exist
underground conventionally or
unconventionally the conventional oil
wells were just you know think about a
big oil puddle underneath the ground
you're just tapping it like a straw
sucking it out if we still have plenty
of weals like that like Saudi Arabia the
Middle East they basically have that
kind of oil in plentiful right that's
why it's super cheap but this Barnett
Shale is not like that it's made up of
these big rocks called Shale that have
natural gas and some oil trapped inside
of them but the question is how to get
in people have kind of known the answer
for a long time was fracturing the rock
or fracking even John wil's Booth a
month before he killed Abe Lincoln was a
fracker but the problem with early
fracking was it didn't always work super
well like for John W's boot he put some
explosives into a well and made a huge
hole but there wasn't a drop of oil left
so naturally he left Pennsylvania and
killed the president I guess see this is
the type of anger not getting oil can
give to people especially when they
spend tons of money on it so in the late
1990s when this guy named George
Mitchell was looking at his document
that said all of your land and the
Barnett Shale has tons of gas stuck in
it but you can't get it he might have
had murder on his mind he was
hemorrhaging cash trying to get fracking
to work when his team switched things up
a little bit they used a newer technique
of cracking open the rocks by shooting
in a special water-based mixture and
drilled sideways instead of just
straight down with the perfect tweaks
production gushed a revolution this
finally made it fast and cheap enough to
drill all of the Lush resources trapped
in America's Shale for a few years
producers were still skeptical but then
in 2008 oil prices hit alltime highs
interest rates hit alltime lows and from
2008 to 2018 the US doubles its oil
production and in 2015 they lift the ban
on exporting us oil which explains this
graph this increase isn't 100% because
of fracking but it's mostly fracking so
this explains how we got to where we are
where the US has a surprisingly high
amount of oil because of this new
technological innovation but there's
still something weird going on the US
produces pretty close to the amount of
oil that Americans use and yet we send a
huge portion of it out of the country
just to get different oil from other
countries and bring it back to America
there's some strange Logistics that
explain why this International oil swap
is
happening so the one remaining part that
we still haven't really talked about
between oil being in the ground and
actually getting used is refining for
any oil from anywhere to actually be
used it first has to be refined
otherwise it's just this thick black
toxic sludge that really can't be used
for anything so the refinery I'm going
to right now will help explain why
American Oil isn't always the best
answer this is chevron's elsag gundo oil
refinery which is one of the biggest oil
refineries on the west coast and most of
the oil it's cooking isn't American
instead it's coming from one of these
ships which sit a couple miles offshore
and quietly get their oil sucked out
through these big pipes in October of
last year the most recent data we have
this Refinery got crude oil from South
Korea Argentina Guyana Mexico and
Colombia and it's not just this Refinery
another Chevron in California imported
crude oil from Iraq Venezuela to
Mississippi Canada to Michigan and even
Texas the state that drills almost half
of the US's crude oil imported 26
million barrels of crude just last
October quick interlude this honestly
probably won't help you that much but a
barrel of oil is 42 gallons so kind of
similar to a bathtub so this seems like
a lot of work to just move all this oil
around when we have it right here we
just don't use it so why don't we use
our own oil well there's a few reasons
we don't so first of all a lot of
American oil does stay in America like
Texas drills a ton of oil and then
refines it down the street then Texans
can pump it into their pickup truck at a
gas station when it's all really close
like this almost all Transportation
costs are gone which is why Texas has
some of the lowest gas prices in the
union but the first problem is that not
all the oil is next to a Refinery and
the refineries aren't always next to the
people who need it we use Los Angeles as
an example in 2021 California used 65
million barrels of oil the state happens
to be one of the largest producers in
the country so part of that oil comes
from inside the state like a few miles
from this Refinery is an oil field in
the middle of LA and there are some
other famously hidden oil wells that are
scattered through throughout the city
and next to people's houses but all of
the oil drilled in California still only
accounts for a fifth of what it needs so
how about we just bring in some extra
from Texas for most of the country
there's a system of oil pipelines that
take oil from the places where lots of
oil is being produced to the people who
want it but California is an exception
the state and its almost 40 million
residents have no crude oil pipelines
coming in and they probably never will
that's because even if the oil from
Texas came to California most refineries
in the state wouldn't be able to use it
this is the biggest reason the US can't
use its own oil it's just not the right
type let me explain for Simplicity sake
I got this from the explain like I'm
five subreddit let's imagine there are
two types of oil in the world one is
strawberry and the other is chocolate
for a long time the US produced a bunch
of chocolate oil so to use it we also
created a bunch of refineries that turn
chocolate into gold not actually gold
but you know what I mean
[Music]
but then over time especially with the
use of fracking the US oil supply became
a lot more strawberry and those
chocolate refineries can't use that if
they do they'll have some really big
problems oil refiners could create more
refineries if they wanted but according
to one commentator the US government's
environmental standards and push to
abandon fossil fuels makes it a risky
investment this might be why the last
significant oil refinery build in the US
was made almost 50 years ago so instead
of going through the super expensive
process of updating America's refineries
to use strawberry oil refiners decided
it would be a better idea to just import
chocolate oil from other countries who
still make it and use that in our
chocolate refineries then just send all
that strawberry oil overseas where they
have refineries for it so this is why in
2022 59% of oil going to California
refineries came from foreign countries
and 80% of Elsa gundo oil originates
abroad and despite exporting more the US
still Imports pretty hefty sums of oil
the real picture is more complicated
than this like there's a whole range of
differences in oil types and refiners
don't just use one super specific type
but the end result is the same the
companies who buy and sell oil decided
that keeping the same refineries in
America and just importing the right
type of oil just makes them more money
than using oil from the states and that
leads us to the final concern a lot of
people have about American oil energy
and depend energy Independence the
concept of energy Independence is this
really nice idea it gives these Vibes of
ultimate control over one's Destiny no
other country can decide whether we have
power and it seems like it's just like
The Logical answer if we make it
ourselves it can be closer and cheaper
maybe but the reality is that in a lot
of cases it's just not it would be very
very disruptive to the economy for the
US to say all of a sudden we're not
importing or we're not exporting we're
just going to do you know we're just
going to work with what we have the
Chicago refineries would find they have
no oil to refine it would take decades
to sort that out it would be a mess
biggest factor in gas prices is nothing
more than the international cost of oil
which the us only has a small part in
determining and then beyond price just
because oil is close doesn't mean we can
use it you'll hear you know Joe Biden
screwed up and that's why we don't have
energy Independence but we never have
had energy Independence and every
country should worry about energy
security
you know that they have enough energy to
meet the needs and demands of the
economy of the people of the consumers
the US has energy security focusing on
energy security instead of Independence
is why I've been slowly riding up this
Canadian line for so long historically
speaking it's a lot less likely that the
US gets in a fight with Canada than it
will a country in the Middle East so
it's a pretty safe bet their oil will be
there for us and as for our oil
addiction as much as some people would
like to stop using oil altogether the US
is still highly dependent on it we have
to do our best to March along this
transition in a very determined way to
make sure that not only we are
mitigating climate change greenhouse gas
emissions limiting local environmental
harms but also keeping energy affordable
we have to make sure that our most
vulnerable communities are taken care of
if the US keeps drilling oil here versus
abroad the world might benefit somewhat
from the country's relatively low
greenhouse gas emissions from production
but at the end of the day to curb
emissions the oil needs to stay in the
ground so I don't want to be sounding
like a Brash you know just
environmentalist who like we just need
to do Clean Energy Technologies and just
stop all fossil fuels that cannot happen
overnight but it can happen faster than
what we can think and what possibly the
fossil fuel industry thinks it can
happen and while America and the rest of
the world are still figuring out how
they'll find energy security let's
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[Music]
more Jesus Christ oh my God
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