Tuesday, February 7, 2012

U.S. to Be Free from Foreign Oil by 2030: BP

U.S. to Be Free from Foreign Oil by 2030: BPPalm Beach, FL 2/7/12 (StreetBeat) -- Oil and gas company BP (NYSE: BP) recently released its annual Energy Outlook and many of its projections should be viewed with concern.

According to the company, carbon emissions will increase 28 percent by 2030, a dire forecast for those trying to reverse the effects of climate change. Moreover, renewable energy sources — such as wind and solar — will contribute less than 10 percent of global energy output in the coming years despite growing at least eight percent a year between now and 2030.
The growth in emerging economies like China and Brazil will lead to a 39 percent increase in global energy demand by 2030, BP forecasts. China will become increasingly reliant on foreign oil, importing as much as 80 percent of its oil needs in the next 20 years. But it would be second to Europe, which is expected to import 94 percent of its oil and 80 percent of the natural gas it consumes. India could very likely take in 91 percent of its crude oil from abroad.

Alternatively, the United States could become almost entirely energy dependent by 2030, says BP. As the country expands its domestic natural gas production, the U.S. will buy less foreign oil, causing imports to fall to levels not seen since 1990. Natural gas production, otherwise known as "fracking," has come under intense scrutiny because of its environmental risks. The Obama administration recently gave a stinging rebuke to the industry by rejecting the proposed Keystone XL Pipeline, which would have brought 700,000 barrels per day of supply from Canada's oil sands projects to refineries on the U.S. Gulf Coast. In last month's State of the Union Address, Obama said he supported natural gas investment but pressed for more regulations to ensure the safety of natural gas drilling.

"We have a supply of natural gas that can last America nearly one hundred years, and my Administration will take every possible action to safely develop this energy," Obama said in his address. "Experts believe this will support more than 600,000 jobs by the end of the decade. And I'm requiring all companies that drill for gas on public lands to disclose the chemicals they use. America will develop this resource without putting the health and safety of our citizens at risk."

The U.S. has been pursuing energy independence since the 1973 Arab oil embargo forced a shortage of oil imports and caused gasoline prices to skyrocket at the pump. Bloomberg reports that the growing U.S. energy industry could fulfill the country's energy demands in 20 years. Natural gas production has increased 11 percent from 2007 to 2010 and domestic crude production has risen to 5.7 million barrels a day - its highest output in eight years, according to the U.S. Energy Department.

BP predicts natural gas will be the fastest growing fossil fuel by 2030, growing 2.1 percent per year. Energy from coal will increase by 1.2 percent each year, contributing more than 25 percent of total energy output by 2030.

Daniel Yergin, the Pulitzer-prize winning author of "The Prize" whose new book "The Quest" explores energy security, renewable sources and the world's shrinking oil supply, says the North American energy production revolution taking place could alter the marketplace forever.

"You've got a Western Hemisphere that by 2030 may not be importing any oil from the Eastern Hemisphere," Yergin tells The Daily Ticker's Aaron Task in the above video.

Yergin says even as the U.S. and other North American countries reduce their imports of oil and become more energy efficient, countries like China and India are consuming more energy as their citizens enter the working class and can afford Western luxuries like a personal car.

"While they [China, India] are increasingly concerned about climate change, they're more concerned about economic growth and poverty in their countries," he asserts. "They both rely heavily on coal and will increase their consumption of coal. This growth in greenhouse gases is riding on the back of global economic growth."

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