Why the U.S. Can’t Use the Oil It Produces

The United States is the biggest oil producer in the world, but trades nearly one third of the oil it produces for foreign oil. Why can’t we use it ourselves and become energy independent? The answer is more complicated than you might expect.

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More from Nathan: @sparkpass

[unrealistic]

Texas chemical engineer here.
not sure if you touched on this but a big reason we import oil to texas is due to texas’ unique oil refineries built to refine heavy hydrocarbons and generally “nasty oil”. many countries have no means of refining their oil and will sell their crude for cheap to the few countries that can refine it.

[j.s.c.]

Your explanation of refineries leaves out an important detail: you can’t make all the products from any one kind of oil. To continue with your analogy, strawberry oil can only make butane, propane and gasoline, while chocolate oil can also make gasoline, but is the only thing that can make airplane fuel and bunker oil. Heavy oil makes heavy products, light oil makes light products. You can’t get everything we use from either kind.

[mrdonetx]

The United States has light sweet crude oil. Which refines almost one for one into gasoline. A little less into kerosene. We import heavy crude because you can get gasoline, diesel, kerosene, carbon chains used in plastics and even fine sand used in pool filters we get from heavy crude.

[hillcountrylivin]

While I'm not a chemical engineer, I have been associated with marine logistics since the late 80's and for the last 29 years I've been employed by one of North America's largest independent petroleum refining and marketing company, currently managing international logistics for both US and European imports/exports. All that said to point out that this video is very educational to the lay person who is inexperienced in petroleum refining, marketing, and logistics. I'm actually going to begin using this "strawberry and chocolate" analogy in training new hires and interns in our organization.

[avaxasirvina]

We will need oil even if it is no longer fuel. Still need it for medial supplies, lubricant's, computer parts, car parts, etc.

[lanceulrich]

Chemical Engineer here, all 35 years of my experience has been in petroleum refining. Your video is surprisingly accurate but somewhat misleading. Economics and environmental permits/regulations are driving 95% of the decisions. It's just cheaper for a refinery to buy foreign oil than to spend $5 - 10 Billion (that's with a B) to convert just one refinery to American oil. In addition, it can easily take 5 - 10 years to get the permits that would allow you to make the conversion. And before the haters go off on "Yeah but refineries make $10 Billion a day" - they don't. Seasonally and during maintenance they can easily lose $10 MM plus per month. In addition, a refiner doesn't control the price of either its feedstocks or products, they float on their respective commodity markets so it's an incredibly high risk business with massive capital requirements and almost infinite liability. For comparison, imagine if Apple couldn't control the sales price of an iPhone.

[caynehampton]

Around here (Delaware River), once home to the largest oil refining complex on the East Coast, eight refineries at its peak, only four remain due to deindustrialization and foreign competition. They import tons of crude from Saudi Arabia, Nigeria, Angola, Venezuela, Mexico, Norway, Scotland, Iraq, Newfoundland, Canada, Colombia, Gabon, Congo, Chad, and the former Soviet Union. Those refineries here were built to handle those types of crudes along with crude from Texas.

[eartraffic]

I'm not too sure Canada is going to be very friendly with their oil come February

[lukethompson]

How can you not mention the Jones Act? This plays a HUGE part in why the US exports and imports rather than moving it around our own country

[melshk]

Geologist here. Conventional oil isn't a "puddle, " it exists in the pore spaces of porous reservoir rocks like sandstone and limestone. Shale has a much lower permeability, making fracking necessary to economically extract those hydrocarbons.

[dalerudd]

I have worked in the oil and gas industry for years. When you talk about strawberry and chocolate oil you are somewhat mistaken. The difference is what they call heavy oil (Bitumen) and thin light crude oil. The technology to modify heavy oil into thin light crude oil exists and we use it in Canada a lot. We process it in an upgrader and then it can be refined in a regular refinery.

[prpr]

the no fight with canada didnt age very well . . .

[roberthealey]

Since US oil is freely traded, it goes to the highest bidder which isn’t necessarily a US refinery. It can be cheaper for US refiners to purchase foreign crude rather than domestic.

[sonnybigirwa]

The strawberry and chocolate analogy is good, but you could have also used the real technical terms in tandem for real informative and educational value

[kennethfathauer]

There is a new refinery in Odessa, Tx. (Midland) that refines sweet oil.

[MickeyMacks]

Don't count on that Canadian oil being the same price anymore. With U.S. oil companies having to pay Trump's tariffs on Canadian oil, raising the wholesale price by 25%, expect to pay more at the pump or for products that use it.

[smacfe]

Sometimes oversimplifying things ends up straying from the meaning. California policy has made it so difficult to pump oil out of the ground that there is no economic way it can compete with foreign oil. The Biden administration's ban on expanded pipelines means that any additional domestically sourced oil absolutely cannot be used in America as the transfer apparatus is already at capacity. The Biden promise to shut down the fossil fuel industry in 10 years means that there is no reasonable source of funds to modernize existing refineries. The Jones Act also prevents domestic oil from being moved by ship to excess refining capacity and there is only so much trains and trucking can do while still making any economic sense. Trying to explain this topic with any degree of accuracy without a comprehensive analysis of the broken US political system is impossible.

[NN-sjfg]

One thing never mentioned is that all of US transportation n(cars, trucks, trains, planes) amount to only about 30% of the oil usage in the country. Aside from transportation, there are over 8, 000 products that are derived from oil - going from bug spray to medical filters.

[jackprier]

The massive amount of oil produced from the Baaken Field in N Dakota isn't oily at all. Industry parlance calls it "condensate" {the stuff that condenses in natgas pipes} or "natural gasoline"-stuff that is even thinner than diesel.

[rodneydowd]

Except now your President is threatening 25% Tariffs on Canadian oil and lumber. Make America Grovel Again. 🤣