So let's jump right in.
My department chair just brought my attention to a news story on msnbc.com, titled "In role reversal, US on track to be an oil exporter". In it, the author (helpfully identified as "msnbc.com staff") leads with a jaw-dropping premise:
The contentious debate in Congress over the Keystone XL pipeline obscures one significant detail many Americans don't realize: In the first three quarters of 2011, we exported more oil than we imported. This means it's highly likely that this year will be the first time in more than six decades that the United States will be a net exporter of petroleum products, according to a report in USA Today Monday.
Wow! Not only is this development unexpected, but it has immediate implications for public policy! Only, at least as presented by msnbc.com, it's completely untrue.
The most glaring error is right at the beginning: "In the first three quarters of 2011, we exported more oil than we imported." No, we didn't. This statement confuses the generic term, "oil," with the phrase used in the next sentence: "petroleum products." The difference? Well, here it helps to go to msnbc.com's source.
The authors helpfully link to the USA Today piece (which they essentially rewrote without understanding what they were writing about). This more fully sourced article makes a clearer statement of what actually has happened this year. Start with the first paragraph:
Looking at your heating bills or gas prices, you may find it surprising that the United States is enjoying a mini oil boom. It's producing more crude oil and, for the first time in decades, has become a net exporter of petroleum products such as jet fuel, heating oil and gasoline.
This is better than msnbc -- it's not "oil" that the U.S. has recently been exporting more than importing, but a specific list of "petroleum products." USA Today notes that petroleum products include such commodities as jet fuel, heating oil, and gasoline. The list is actually much longer, including diesel fuel and petroleum coke and asphalt and all the various things refined out of the crude petroleum that comes out of the ground. For now, bracket the first part of the USA Today claim -- that the U.S. is "producing more crude oil."
So in terms of imports and exports, how does the volume of "petroleum products" compare to that of crude petroleum? That is, what happens to our picture of American imports and exports if we add in crude, along with products? To get an idea of the scale, it helps to turn to the authoritative source, the U.S. Department of Energy's Energy Information Administration. Below is a graph from the EIA's November 2011 Monthly Energy Review, found here.
The graph above is just for imports, but it makes clear that American demand for "oil"--meaning crude petroleum--has far outpaced an increased demand in petroleum products. Which is to say, learning that the U.S. has exported more petroleum products than it imported doesn't tell us that much about the overall American energy picture. All that crude oil that is still imported just gets refined domestically into the petroleum products (gasoline, etc) that are in such high demand. This graph makes the same point:
American exports of petroleum products have been going up, and imports of both petroleum products and crude oil going down, but still, overall imports of all petroleum and its derivatives still make up about half of all the petroleum consumed in the United States:
So, msnbc.com was misleading in its article. We are not reversing a trend--American dependence on foreign oil--that was a century in the making in the space of a year.
But what about domestic production? It is indeed going up--but compared to last year. In the long term, or "secularly" as we historians say, since the 1970s American domestic oil production has been declining. Occasionally it tics upward, but the overall trend has been downward. Recently, domestic production hit an inflection point and it appears to be going up:
The problem is that top line in the above graph; domestic production may be growing, but domestic consumption is still about twice the amount, thus continuing to require high levels of imports.
Kudos to msnbc.com for noting that the greatest share of American oil imports are not from the Middle East, but Canada, but shame, shame! for suggesting that somehow the United States was some kind of net oil exporter.
Now, back to the original premise of the msnbc.com article, how this all relates to the Keystone XL pipeline is not at all clear to me. Does increased domestic petroleum products exports make the pipeline more or less important? And more or less important for whom? Is the uptick in domestic production a short-term phenomenon, related perhaps to the global economic downturn, or the beginning of a long-term change in America's energy picture? The USA Today article gets into these question a bit more, noting that increased American petroleum product exports are due, in part, to the importation of Canadian tar sands for domestic refining and reexport. So the pipeline would presumably increase the flow of this raw material, thus making more of it available to export. Of course, while the USA Today piece notes the environmental objections to tar sands and the pipeline (they are particularly dirty fuels that produce disproportionate quantities of greenhouse gases), it doesn't note how interest in tar sands are also dependent on global oil prices. Were global prices to drop, tar sands production would look a lot less attractive a proposition.
But the real story here is how we understand the U.S. relationship to the rest of the world. USA Today uncritically lets Citigroup executive and energy economist Edward Morse claim that these trends mean "We're moving toward energy independence." Really? The United States has never been energy independent (and I mean NEVER EVER EVER -- the U.S. imported coal during various fuel shortages since the 18th century), and for anyone in the energy world, the term "energy independence" has very little meaning. We operate in a globally integrated oil market that shows little signs of breaking down into some kind of mercantilist hoarding. Nor would some kind of domestic self-sufficiency even be a good thing; back in the early 20th century, many American policy makers sought to encourage American companies to produce in foreign fields precisely as a way to preserve domestic production for a longer period of time. Moreover, distributed production makes it easier for all countries to adjust to inevitable supply disruptions.
So, if nothing else, always go to the data when you can get it.