PiSigma
"the engineer"
US oil independence is a lie. Believe me I would know since my former CEO may become the next secretary of state (Rex Tillerson). The US produces around 8.5 to 9 millions barrels/day, at its peak in 2014 it barely approached 10 million, but it wasn't able to sustain it. The consumption is about double that at close to 19 million per day. Canada, is the largest exporter of oil to US, which can not be easily replaced. Since most of the Canadian crude exported to the US is heavy, which is then mixed with the light crude produced in Bakken, Permian, Eagleford and Gulf coast in Midwest and texas refineries for refined products. If US want to produce 19 mbpd, then oil needs about $110 per barrel for the economics to work in favour of shale oil. But once again, heavier crudes are needed to mix with the light. Also, most of the the economical shale formations are already drilled, so the add another 10 mbpd of production crappy wells with poor payback and fast well depreciation will need to be put into production. Exxon stayed out of the shale game for a long time because we realized this fact and knows it is not a long term solution.
Now back to China's oil production. China actually produce more than Canada, but of course just uses all of it. Their production has been going down in the last two years due to lack of investment (like everywhere else) but they do have large reserves. Also, China has the largest shale oil/gas reserves in the world, larger than US. The only issue is shale production is water intensive, which is a challenge in China.
It is practically impossible to embargo oil since it is a global product. If there is ever an embargo of oil again China, then China will simply stop buying it in dollars and inyuan. Which would produce a larger problem for the US. After all the dollar is a petrol currency for a reason, and it is one of the pillars keeping the dollar high. Once other countries sees oil sales not in dollars, US dollar would crash.
Now back to China's oil production. China actually produce more than Canada, but of course just uses all of it. Their production has been going down in the last two years due to lack of investment (like everywhere else) but they do have large reserves. Also, China has the largest shale oil/gas reserves in the world, larger than US. The only issue is shale production is water intensive, which is a challenge in China.
It is practically impossible to embargo oil since it is a global product. If there is ever an embargo of oil again China, then China will simply stop buying it in dollars and inyuan. Which would produce a larger problem for the US. After all the dollar is a petrol currency for a reason, and it is one of the pillars keeping the dollar high. Once other countries sees oil sales not in dollars, US dollar would crash.
