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America doesn’t import its oil from where you think it does

America doesn’t import its oil from where you think it does

When you think of American oil imports, you probably think of an empty expanse of desert with a few towering oil derricks sprinkled around. Heat shimmering off the sand. Trucks haul the fuel to tankers, which make their way from the Persian Gulf to some port on the Gulf of Mexico.

That image is wrong. What you should be picturing is a Mountie guarding a well ringed with maple trees.

Here, according to the U.S. Energy Information Administration, is where the U.S. imported oil from in October 2012, the last month for which data is available.

What’s most interesting, though, is how the source of oil differs depending on the region of the country you live in. Last week, Business Insider shared this map created by RBC Capital Market.

Business Insider

Click to embiggen.

While oil moves between regions, it’s fascinating to consider that the Midwest and Mountain West import only oil from Canada. The South’s main source, unsurprisingly, is Mexico, which provides us with almost as much oil as Saudi Arabia. And on the East Coast, more than half of our imported oil comes from Africa.

Assuming the data is accurate, this map gives the lie to the idea that our oil imports leave us at the mercy of states hostile to our interests. It also reveals that Mitt Romney’s proposal for North American energy independence was even easier to achieve than we may have realized.

Philip Bump writes about the news for Gristmill. He also uses Twitter a whole lot.

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America wants to unleash its gas on other countries

America wants to unleash its gas on other countries

Gregory Perry

Guys, thanks to fracking, we have so much natural gas. So much. Like, if you filled up party balloons with the natural gas America produces in a year, you’d have enough to fill your whole house, I assume.* Also: Do not smoke near that.

The glut of natural gas on the market has been a boon, of sorts, if only because it’s driving down carbon dioxide emissions. But those low, low prices, the result of domestic oversupply, are bad news for producers. So they’d like to ship the stuff overseas.

Last week, the government released a report compiled by NERA Economic Consulting on the feasibility of natural gas exports. As the Council on Foreign Relations summarizes:

The study reaffirms that allowing exports would be good for U.S. economic growth. No matter how NERA sets up its model — different assumptions about U.S. gas resources, domestic demand, or international markets — the U.S. economy as a whole benefits from allowing exports. This shouldn’t be a surprise: the fact that economies gain from allowing trade is pretty robust.

The negative headline from the report is that allowing exports would lower average real wage income. This happens despite little or no impact on nominal wages; it is due to higher natural gas prices, which imply slightly lower average real wage income.

(That second point, clarified: More exports means higher natural gas prices in the U.S. due to less domestic supply, which means we pay more for natural gas, which means less real wage income.)

But!

Despite these often-massive export volumes, NERA projects consistently limited natural gas price impacts. In only one scenario — higher than expected U.S. shale resources and massive international demand leading to very large exports — do prices rise by more than a dollar for a thousand cubic feet in the next decade. (They rise by $1.11 in that case.) Most results see an increase closer to fifty cents.

The Washington Post is excited about the prospect of exports, because free trade and so on. (Post Company employee Matt Yglesias is more skeptical.) The head of Shell’s U.S. arm thinks the president will OK an export plan that would ship 21 billion cubic feed of liquefied natural gas overseas every day — though this would require a big expansion of export facilities.

If you use ships. There is, however, an easier way.

* If you’re curious, in September, the country produced 2.4 million million cubic feet of natural gas. A party balloon holds about .5 cubic feet. So that’s 4.8 trillion party balloons. Per month. Probably too big for your house.

Philip Bump writes about the news for Gristmill. He also uses Twitter a whole lot.

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