Is oil securing America?Is drilling for North Dakota oil in the Bakken strengthening America’s national security position?
By: Bryan Horwath, The Dickinson Press
Is drilling for North Dakota oil in the Bakken strengthening America’s national security position?
The consensus seems to be that it does, but for how long is an entirely different question with a set of answers that don’t seem to be as clear.
So says a report released this week by a group called Securing America’s Future Energy, a nonpartisan, nonprofit think tank dedicated to reducing America’s dependence on oil, according to its website.
With the Bakken oil play exploding in the Williston Basin in recent years, there’s been a lot of talk among pro-drilling interests in North Dakota about domestic oil aiding the U.S. in ways other than powering our transportation and heating our homes.
One of the reasons why many think it’s a great idea to produce more and more crude oil domestically is because it would help wean the U.S. off foreign oil supplies, often purchased from perceived rouge nations like Iran, Venezuela or Saudi Arabia.
“You hear a lot about ‘energy independence,’ which our group would say is a little bit of a misnomer” said SAFE spokesman Brad Goehner. “Because oil is sold in a global marketplace, the price of a barrel of oil is the same everywhere. Countries like Canada or Norway meet traditional definition of being energy independent because they produce more oil than they consume, but they’re still paying the same price as everyone else.”
What may be a great solution today, could turn out to be much ado about nothing tomorrow, said Goehner.
“Our group is all for producing more oil in the U.S.,” Goehner said. “We think there are tremendous benefits to do that for many reasons, including economic and national security reasons. But we also believe that there’s still this big problem about prices fluctuating based on things like supply and demand in China, a terrorist attack someplace or instability in the Middle East. Even though we’re producing more oil, the price of oil could go up at any time and that directly affects our economy, hurts our GDP and adds to the fiscal deficit.”
Goehner said that with added focus on protecting different oil-producing regions around the globe coupled with the fact that the U.S. military uses so much fuel, a spike in oil prices can cost the U.S. billions in any given year for military fuel alone.
In a report released by SAFE on March 13 titled “Lull in global oil demand is opportunity to impose stronger measures on Iran,” the group argues that “global dependence on oil has undermined efforts to address the Iranian nuclear threat,” but that “the U.S. oil boom and other non-OPEC oil production is changing that dynamic.”
Thanks mostly to the Bakken and the Eagle Ford play, America is producing a lot more oil. For the month of December, the U.S. produced about 7.03 million barrels of crude oil per day and imported 7.58 million barrels per day, according to Energy Information Association statistics. In addition, from January 2009 through July, North Dakota more than tripled its production of oil to nearly 675,000 barrels per day, according to numbers from the state’s Department of Mineral Resources.
“It’s a great sign that we’re having a discussion like this because only a few years ago, we were talking about 60 or 70 percent reliance on foreign oil,” said North Dakota Petroleum Council President Ron Ness. “Now that number has completely reversed itself. Certainly the Bakken is having a significant impact on just the ability to have a discussion about energy security. Bakken oil is now going East in the U.S. and it’s going to the West Coast and that’s backing out foreign barrels. That’s great for our national security.”
Despite the ramped-up domestic production numbers — and the numbers are going up — the U.S. still imports a lot of oil. In 2011, the U.S. imported 45 percent of the petroleum it consumed from other countries, according to the EIA. About 40 percent of gross imports to the U.S. came from OPEC countries.
Essentially, it’s clear that most think that a reduction in oil brought in from places like Iran is a positive for the U.S. on several levels. Some, however, wonder whether simply drilling for more oil — wherever it may come from — is a dated solution to energy and national security issues.
“It may be true that (domestic drilling) is providing national security in the short term, it’s not a long term solution,” said Wayde Schafer of the Sierra Club’s North Dakota chapter. “To become truly energy independent, we need to be using renewables and continue to improve our energy efficiency. No matter how much we’re now getting domestically, we have to remember that oil is still a finite resource.”
For now, there are no signs that the two major oil plays in the U.S. — the Bakken, mostly in North Dakota, and the Eagle Ford in Texas — are at all slowing down. North Dakota oil production dipped slightly according to DMR numbers released this week, but the drop was likely only due to factors stemming from the colder winter months. Experts believe production will likely continue to increase as temperatures warm.
In SAFE’s report, what is described as a “loose” global oil market in 2013 could provide an opportunity for the U.S. to enact tougher measures on Iran in the face of the country’s ongoing nuclear weapons program threats.
“Surging non-OPEC oil production and weak oil demand growth in the U.S. and Europe could help the global oil market temporarily absorb the loss of the majority of Iran’s remaining 1-to-1.5 million barrels per day of crude exports,” the report states.
A less-powerful, less-funded Iran could be a clear indication that domestic oil production is strengthening America’s national security. The question seems to be whether getting more oil out of North America is a long- or short-term solution to what most U.S. policymakers agree is a problem — a dependence on foreign oil.