1 00:00:00,012 --> 00:00:02,441 Welcome back to Energy 101. I'm Dr. 2 00:00:02,441 --> 00:00:06,212 Sam Shelton. we're continuing to talk about energy 3 00:00:06,212 --> 00:00:09,857 independence. Energy independence is a topic that we 4 00:00:09,857 --> 00:00:14,397 read a lot about in the media. We see conflicting, what appears to be 5 00:00:14,397 --> 00:00:18,997 conflicting opinions and conflicting, conflicting information about, well, how 6 00:00:18,997 --> 00:00:23,972 close to energy independence we are and whether we're making progress or we're 7 00:00:23,972 --> 00:00:28,342 not making progress towards becoming more energy independent. 8 00:00:28,342 --> 00:00:33,294 And we've already seen in the last module, you can view and define energy 9 00:00:33,294 --> 00:00:39,079 independence in many, many different ways and that's what people do unfortunately 10 00:00:39,079 --> 00:00:43,432 to their own, to make their own point, they do that sometimes. 11 00:00:43,432 --> 00:00:48,899 So what I'm trying to do here is to show all the data and show some of the various 12 00:00:48,899 --> 00:00:53,873 ways you can slice and dice the data and come out with what appears to be 13 00:00:53,873 --> 00:00:58,608 different results regarding whether we're energy independent or not energy 14 00:00:58,608 --> 00:01:01,881 independent. And what the we can do to, to make 15 00:01:01,881 --> 00:01:07,052 ourselves more independent and whether we're making headway in that direction. 16 00:01:07,052 --> 00:01:13,563 So energy independence, this is part two, the last module was also on energy 17 00:01:13,563 --> 00:01:18,106 independence. So, this is the big picture and it shows 18 00:01:18,106 --> 00:01:24,983 the all of our energy resources. It shows crude oil natural gas, natural 19 00:01:24,983 --> 00:01:31,350 gas liquids, coal, and renewables. And the blue is the US, what we produce 20 00:01:31,350 --> 00:01:40,190 within the US right here, and the red, this is as we noted here, US produced and 21 00:01:40,190 --> 00:01:45,507 the red is the, bar is the amount that we import. 22 00:01:45,507 --> 00:01:53,068 So, as we saw last time, as you recall, we import about 60% of our oil and into 23 00:01:53,068 --> 00:01:58,195 the US from outside this country and we produce about 40%. 24 00:01:58,195 --> 00:02:05,163 Natural gas, we're we import only a little bit and that being about 15, 13% 25 00:02:05,163 --> 00:02:09,873 from Canada. we've got natural gas liquids, which 26 00:02:09,873 --> 00:02:16,282 we've defined what are earlier the natural gas liquid section, they're the 27 00:02:16,282 --> 00:02:21,732 liquids that come out with natural gas, such as propanes and butanes, and 28 00:02:21,732 --> 00:02:26,017 ethanes, and coal here, where, where, we actually 29 00:02:26,017 --> 00:02:29,692 export coal, so it's shown as a negative number. 30 00:02:29,692 --> 00:02:33,092 This is an export, when it's below the zero, 31 00:02:33,092 --> 00:02:40,334 then that means that we're exporting. And then renewables, of course, by almost 32 00:02:40,334 --> 00:02:48,046 definition, the renewables we get are all domestically improved domestically 33 00:02:48,046 --> 00:02:52,837 produced. So this is really all of the data in and 34 00:02:52,837 --> 00:02:59,871 of itself and how energy independent, you, we are, looking to this graph is 35 00:02:59,871 --> 00:03:03,586 depends on how you slice and dice the data. 36 00:03:03,586 --> 00:03:09,502 But if we look at the oil imports, there are two ways to look at it. 37 00:03:09,502 --> 00:03:15,231 One way is that we just looked at it earlier, the 60-40 split, we looked at 38 00:03:15,231 --> 00:03:19,706 only the US imports. Well, you could argue the fact that North 39 00:03:19,706 --> 00:03:25,310 American imports is really what we need to worry about and not the US imports, 40 00:03:25,310 --> 00:03:31,163 because we import significant oil from Canada and a little bit from Mexico and 41 00:03:31,163 --> 00:03:37,012 we're saying those are stable and we really shouldn't worry about the imports 42 00:03:37,012 --> 00:03:39,962 from those countries within North America. 43 00:03:39,962 --> 00:03:45,537 They are generally brought in by pipeline and it's fairly easy and straightforward 44 00:03:45,537 --> 00:03:50,937 to import them and we feel like theirs are secure sources but let me point out 45 00:03:50,937 --> 00:03:53,845 when we, we look at that in just a minute. 46 00:03:53,845 --> 00:03:59,071 But let me point out, there's still an economic impact of importing that oil 47 00:03:59,071 --> 00:04:03,631 from even Canada and Mexico, and can, it's a significant economic 48 00:04:03,631 --> 00:04:10,112 impact on the US and its dollars flowing out that could stay here and improve our 49 00:04:10,112 --> 00:04:14,152 economy. But that's the question and as I've just 50 00:04:14,152 --> 00:04:20,467 said we showed last time that from the US alone, viewpoint, not North America but 51 00:04:20,467 --> 00:04:24,674 just the US, we import about 61% of our oil, this is 52 00:04:24,674 --> 00:04:28,654 crude oil. when I say oil it's not enough with crude 53 00:04:28,654 --> 00:04:34,716 oil, it's the black stuff we get out of the ground before we start refining it 54 00:04:34,716 --> 00:04:40,217 and we produce about 39% oil. Everything I'm talking about really in 55 00:04:40,217 --> 00:04:43,867 this whole course is based on energy, on uh,. 56 00:04:43,867 --> 00:04:48,067 2011 data. I don't like to look at monthly data. 57 00:04:48,067 --> 00:04:53,392 You get more erratic, it's hard to make conclusions from it, 58 00:04:53,392 --> 00:05:00,279 and so I wait until the close of 2012 before I update things, and look at 59 00:05:00,279 --> 00:05:03,536 another year. So all of this for 2011. 60 00:05:03,536 --> 00:05:10,990 By the way, it looks like that we will produce more in 2012 than we did in 2000 61 00:05:10,990 --> 00:05:16,037 and 11 and we imported a smaller percentage, so that's this uh,. 62 00:05:16,037 --> 00:05:19,670 61% will go down in 2012, we expect it to, 63 00:05:19,670 --> 00:05:26,786 and the US percentage that is produced here in the country will go up from 39% 64 00:05:26,786 --> 00:05:32,700 when we get the 2012 data in. If you look at the preliminary so far, 65 00:05:32,700 --> 00:05:39,103 that's the way it's looking. but what about North America? If you take 66 00:05:39,103 --> 00:05:46,479 out Canada and Mexico from the imported number, then we are importing about 43% 67 00:05:46,479 --> 00:05:57,838 from outside North America and we are producing about 57% inside North America. 68 00:05:57,838 --> 00:06:05,672 And this, this should not, say here, this is a whoop, go back, 69 00:06:05,672 --> 00:06:20,422 this is a mistake that I have here on U, outside US, that's outside North America. 70 00:06:20,422 --> 00:06:24,192 Okay? Outside North America and this is what's 71 00:06:24,192 --> 00:06:29,533 produced inside North America. So the blue represents the oil we are 72 00:06:29,533 --> 00:06:34,742 producing in Canada US, including Alaska, and in Mexico. 73 00:06:34,742 --> 00:06:40,197 So we're getting about 40%, approximately, of our oil outside of 74 00:06:40,197 --> 00:06:44,582 North America and 57, 60% within North America, 75 00:06:44,582 --> 00:06:48,492 so it's, that's, that's one number that you see. 76 00:06:48,492 --> 00:06:53,047 And the to, to be stated properly, that is North American oil, energy 77 00:06:53,047 --> 00:06:55,730 independence, not U.S. independence. 78 00:06:55,730 --> 00:07:00,538 But that's the way a lot of people have treated it and some numbers you see or 79 00:07:00,538 --> 00:07:05,776 have that used that, and it's certainly a legitimate way to look at it, it just 80 00:07:05,776 --> 00:07:09,066 needs to be made clear what we're talking about. 81 00:07:09,066 --> 00:07:13,176 with we, we are increasing the amount of 82 00:07:13,176 --> 00:07:19,306 liquid petroleum, and so, another way you can look at things is we can look at 83 00:07:19,306 --> 00:07:25,087 liquid petroleum independence, not oil independence, but a liquid and liquid 84 00:07:25,087 --> 00:07:28,929 petroleum and we call what what we mean by liquid petroleum. 85 00:07:28,929 --> 00:07:35,007 Liquid petroleum includes oil, it includes ethenol that's produced and 86 00:07:35,007 --> 00:07:40,074 it includes natural gas liquids. So they, those are what we call 87 00:07:40,074 --> 00:07:42,513 petroleum, liquid petroleum, 88 00:07:42,513 --> 00:07:47,682 and, when people say petroleum, that's generally what they mean. 89 00:07:47,682 --> 00:07:54,652 sometimes they use petroleum in oil in interchangeably and that's really very 90 00:07:54,652 --> 00:07:59,567 confusing when that's done. So, let's look at how we're doing 91 00:07:59,567 --> 00:08:06,177 regarding liquid petroleum independence. And, so, here's, what we got here is what 92 00:08:06,177 --> 00:08:20,561 our production record is through 2011 for ethanol, natural gas, and oil, which all 93 00:08:20,561 --> 00:08:30,984 add up to our natural gas petroleum. So here, here is the ethanol, here is the 94 00:08:30,984 --> 00:08:38,762 natural gas liquids, and here is the oil. And you notice, as we're seeing before, 95 00:08:38,762 --> 00:08:46,257 our oil production has increased. Our natural gas liquids has increased and 96 00:08:46,257 --> 00:08:51,912 our ethanol production has increased. Now, we talked a little bit before about 97 00:08:51,912 --> 00:08:57,012 whether this, these three liquid petroleums should be added together. 98 00:08:57,012 --> 00:09:02,267 They really, in my mind, should only be added together if they're totally 99 00:09:02,267 --> 00:09:06,669 interchangeable. Well, on a near term basis, they are not 100 00:09:06,669 --> 00:09:10,667 interchangeable in many ways, on a one-to-one basis. 101 00:09:10,667 --> 00:09:16,976 I've already talked about natural gas liquids are used for several things, like 102 00:09:16,976 --> 00:09:23,396 ethanes are used to make ethylene and polyethylene plastic bags for instance, 103 00:09:23,396 --> 00:09:29,993 your plastic bags are made from ethane that comes from natural gas liquids not 104 00:09:29,993 --> 00:09:33,184 from oil. ethanol, what about ethanol? 105 00:09:33,184 --> 00:09:39,011 Well, ethanol is a direct displacement of oil that when, that is used for gasoline 106 00:09:39,011 --> 00:09:43,930 in our transportation system. However, we've noted before ethanol, 107 00:09:43,930 --> 00:09:49,396 a barrel of ethanol does not contain the same amount of energy as a barrel of oil, 108 00:09:49,396 --> 00:09:53,977 so you shouldn't really be adding those together on a one-to-one basis. 109 00:09:53,977 --> 00:09:58,512 It takes about 1.7 barrels of ethanol to displace one barrel of oil. 110 00:09:58,512 --> 00:10:04,935 So we really ought to be cutting the ethanol production by about 50% almost, 111 00:10:04,935 --> 00:10:11,170 about 40% to be exact in order to, before we add it to the oil production. 112 00:10:11,170 --> 00:10:17,496 So there's a lot of nuances here and we have to be careful when you're adding 113 00:10:17,496 --> 00:10:23,961 different energy types energy sources, particularly, such as this, because they 114 00:10:23,961 --> 00:10:30,203 all do not have the same value and that can mean several things that, number one, 115 00:10:30,203 --> 00:10:36,668 they can't be interchanged and they can't deplace each other on a one-to-one basis. 116 00:10:36,668 --> 00:10:40,924 But anyway, that's, that's a lot of time, a lot of data that 117 00:10:40,924 --> 00:10:47,140 you're seeing is showing that. And on that basis, from the viewpoint of 118 00:10:47,140 --> 00:10:53,253 natural gas, of liquid petroleum, our imports come down to 50%. 119 00:10:53,253 --> 00:11:01,855 50% is what our imports come down to there and from 60% and here's the oil 120 00:11:01,855 --> 00:11:10,604 produced and, and, and that means liquid petroleum, and here excuse me, that's 121 00:11:10,604 --> 00:11:13,056 oil, and this is ethane, and ethanol and here 122 00:11:13,056 --> 00:11:18,950 is natural gas liquids. So, what we've done here, we've made the 123 00:11:18,950 --> 00:11:23,457 pie bigger by adding these two for energy production. 124 00:11:23,457 --> 00:11:29,277 They add to our oil and that means that this percentage goes down. 125 00:11:29,277 --> 00:11:35,517 So it went down from 60% to about 50% by adding this to the oil to talk about 126 00:11:35,517 --> 00:11:38,817 petroleum. So it's certainly a reasonable way to 127 00:11:38,817 --> 00:11:42,242 look at it. But when you're quoting these numbers, 128 00:11:42,242 --> 00:11:46,842 you need to be careful and define exactly what you're talking about. 129 00:11:46,842 --> 00:11:51,992 You talk about liquid petroleum or what some people refer to as [INAUDIBLE] 130 00:11:51,992 --> 00:11:58,647 petroleum rather than oil. So, in a nutshell about 60% of our US oil 131 00:11:58,647 --> 00:12:07,726 used is produced in North America and 40% is imported from outside North America. 132 00:12:07,726 --> 00:12:15,124 regarding North America, and back to just looking at the North 133 00:12:15,124 --> 00:12:21,199 American versus US. So, that's just shows us some of the 134 00:12:21,199 --> 00:12:27,705 various ways that we can look at energy and oil independence. 135 00:12:27,705 --> 00:12:28,655 Thank you.