The New York Times Exaggerates The Significance of Shale Oil

By Kjell Aleklett

26 March, 2012

Aleklett's Energy Mix

In a number of articles The New York Times has shown that it is not concerned about Peak Oil. On 23 March it headed page 1 with the article, “U.S. Inches Toward Goal of Energy Independence” (http://www.nytimes.com/2012/03/23/business/energy-environment/inching-to...). The article reminds us that since Nixon’s time every president has had the same goal of giving the USA “independence from foreign energy sources”. One can interpret the article as saying that the USA is now on the way to reaching this goal but let us compare some of the statements in the article to what the USA’s Energy Information Agency (EIA) says.

“Using new technology and spurred by rising oil prices since the mid-2000s, the industry is extracting millions of barrels more a week, from the deepest waters of the Gulf of Mexico to the prairies of North Dakota.”

In 2010 the USA consumed approximately 15 million barrels of crude oil per day. During one week this amounts to more than 100 million barrels. If the oil industry increases weekly production by 1 million barrels then this is equivalent to 1% of demand. Of course, this is important but when the USA is importing 65 million barrels per week according to the EIA then there is a long way to go before the USA becomes self sufficient in oil production. Up to 2020 the EIA estimates that domestic production will grow to 6.8 Mb/d and consumption will fall to 14.6 Mb/d but this means that the USA will still be importing 60% of its crude oil requirements.

The NYT names some figures in its article:

“In 2011, the country imported just 45 percent of the liquid fuels it used, down from a record high of 60 percent in 2005.”

That volume of liquid fuels includes ethanol and the additional ethanol production is regarded as equivalent to oil without considering that it takes oil to produce the ethanol. This means that the description of fuel consumption in the USA is misleading. Without ethanol production, the USA’s total consumption of fuel would be less.

Furthermore, the NYT discusses that the USA is not completely self-determining in its foreign policy because of its need to import oil but that the new oil production will make it more independent. An example of this lack of freedom of action on the part of the USA is illustrated by the fact that they allowed Saudi Arabia to enter Bahrain to suppress the democratic movement there since the USA has a naval base in Bahrain. With continued large imports of crude oil the new domestic production will have little significance in terms of the self-determination that USA’s presidents have sought.

The NYT discusses the political game behind the increased production and, not unexpectedly, President George W. Bush is mentioned. The article also mentions some of the negative consequences of drilling and mentions primarily air quality. But the NYT dreams that, in the future, the USA will produce as much oil as Saudi Arabia. The authorities recognize that there are environmental problems and that they must address these.

Oil will be an important part of the presidential election and President Obama is under pressure. He has now given permission for exploration in new areas and apparently he also supports the Keystone XL pipeline from Canada. The New York Times’ views on oil will be significant and I will try to follow what they say in the lead up to the election.

Kjell Aleklett is President of ASPO International





