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US Set to Pass Saudi Arabia as World’s Largest Liquid Petroleum Producer

America’s booming fracking industry will put the US atop the list of petroleum producing nations for the first time since 1991.
Image via Flickr

Sometime this month, the United States will likely overtake Saudi Arabia as the world's leading producer of liquid petroleum — a looming milestone that brings into sharp focus the seemingly contradictory objectives of the Obama Administration to address climate change, on one hand, while promoting an all-of-the-above approach to domestic energy production, on the other.

"Petroleum certainly causes damage," Michael Levi, a senior fellow at the Council of Foreign Relations (CFR) and author of Power Surge, told VICE News. "But the Administration seems to have concluded that the benefits outweigh the costs — that domestic production reduces imports and benefits the US economy."


Environmentalists say the risks far outweigh the benefits.

"The huge oil fields with easily extractable oil — like Ghawar and Burgan in the Arabian peninsula — are beginning to play out and more extreme oil — shale oil, tight oil, deep-water, ultra deep-water and proposed Arctic drilling — are being relied on to fill the void," Mark Floegel, Research Director at Greenpeace, told VICE News.

Floegel added: "When the US fills that void, it means not only are we responsible for the resulting greenhouse gases, but we're assuming the risks to local environments that come with such hazardous methods."

Technological innovations in oil and natural gas drilling have made it possible for fossil fuel companies to tap previously inaccessible deposits, boosting domestic production and transforming states like North Dakota and Pennsylvania into leading fossil fuel producing regions.

'This administration calls for action on climate, but is taking action — decisive action — to accommodate the fossil fuel industries.'

Environmental groups have warned that the new drilling techniques — hydraulic, horizontal fracturing, or fracking — pollute ground water supplies and emit dangerous amounts of methane, a powerful greenhouse gas. Furthermore, they say, cheap and abundant natural gas makes it unlikely that energy producers will switch to clean, renewable sources of power.

In August, the US and Saudi Arabia produced roughly the same amount of crude oil and liquid petroleum products, about 11.5 million barrels per day. Liquid petroleum is a category comprised of crude oil and nature gas liquids, like propane and butane, used as heating fuels, and ethane, an ingredient in plastic bags.


The US Energy Information Administration (EIA) projects US crude oil production to increase from an average of 8.5 million barrels per day in 2014 to 9.5 million barrels in 2015. The agency predicts natural gas liquids production will rise from an average of 2.9 million barrels per day to 3.1 million barrels.

OPEC, the oil cartel, sets Saudi Arabia's production quota. Saudi officials have said it is capable of increasing production by 2.5 million barrels per day.

The Saudi embassy in Washington D.C. did not respond to a VICE News request for comment on whether it would seek to increase its production quota.

Not since 1991 has the US occupied the top spot in liquid petroleum production.

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"We have dual US policy goals colliding," said Joel Darmstadter, Senior Fellow at Resources for the Future (RFF). "You have the objective of obtaining more affordable energy colliding with the quite separate objective of raising the costs of fossil fuel energy production in order for its price to reflect the damage it does to the environment."

The CFR's Levi told VICE News that cutting consumption of fossil fuels was the key to curbing greenhouse gas emissions, rather than focusing too heavily on cutting production.

When asked to comment on the significance of the US becoming the world's top producer, and on the Obama Administration's climate policies, an American Petroleum Institute (API) spokesperson referred VICE News to a September 30 statement on the industry's efforts to curb greenhouse gas emissions.


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In the statement, API Director of Regulatory and Scientific Affairs Howard Feldman said: "We're proud to see our industry's efforts demonstrated in US Environmental Protection Agency data that show emissions are far lower than EPA projected just a few years ago, even as U.S. production has surged."

"Thanks in large part to innovations like hydraulic fracturing and horizontal drilling, America is leading the world in producing natural gas and reducing greenhouse gas emissions," Feldman added.

Environmentalists are deeply skeptical of such claims.

"This administration calls for action on climate, but is taking action — decisive action — to accommodate the fossil fuel industries," Floegel said. "It's a cynical ploy to talk a good game in hopes of keeping voters as useful idiots while the same old carbon kingpins keep calling the shots."

RFF's Darmstadter sees a way for the Obama Administration to reconcile its paradoxical objectives: imposing a carbon tax.

"President Obama gave a long ranging interview recently and embraced a carbon tax," he said. "If the tax faithfully reflects the consequences of burning fossil fuels, you're about as well off as you can be — every barrel is priced, by design, to reflect environmental impact."

But few people believe a carbon tax is a realistic political goal, given widespread Congressional opposition to action on climate change.

"Until a tax is imposed, we will continue to face the disparity of the two paradoxical policy goals of cheap energy and addressing climate change," Darmstadter said.

Follow Robert S. Eshelman on Twitter: @RobertSEshelman

Image via Flickr