Press Interpreter

05/26/05 -- The US is growing increasingly dependent on crude oil despite attempts to increase local production to meet a rise in demand.

Doug McIntyre, an analyst at the US government’s Energy Information Administration, said that long-term demand expectations pointed to an increase on the US dependence on imports.

He added that a decrease in oil reserves is expected to take place over the next two weeks, and keeping imports at 10.5 million barrels per day would be too much.

Government data show that the US currently refines 15.5 million bpd of crude oil and that over one third of this amount is locally produced.

Refineries are expected to increase their oil consumption to about 16 million bpd in the upcoming two weeks to meet the summer demand in gas and to store sufficient amounts of heating fuel before winter.

McIntyre said that the US produced about 5.5 million bpd of crude oil locally, included Alaska production.

In order to avoid a decrease in reserves when refinement levels reach 16 million bpd, the US will have to import 10.5 million bpd.

Dependence on Imports

Expectations of an increase in dependence on imports come amid a bid by Congress members to pass an energy sector bill.

The Bush administration hopes to open areas in Arctic Circle wildlife reserves to drilling and to provide tax incentives for exploration operations.

However, Rick Mueller, the director of Energy Security Analysis Inc, said that the quantities talked about when production begins in 2010 or 2012 would not meet the increase in US demand.

They do not account for an ongoing decrease in the output of other American fields, he added.

The latest government data showed that US crude oil imports rose about 900 thousand bpd to 10.86 million bpd during the week ending on May 13, marking the fourth highest weekly average.

US demand has increased by roughly 2% since 2003, while local production has decreased by about 30%, the lowest in 50 years.

New production in the Gulf of Mexico has helped offset the decrease in land field production this year.

Tim Evens, top analyst at IFR Energy Services, thinks that imports are America's past, present and future.

The US was importing about 9.5 million bpd two years ago, and the Energy Department expressed last year its grave concern over that level.

Although it is no longer possible to import more than 10 million bpd, this has become the norm, even risking to reach 11 million bpd.

[Full article]

Reuters

Translated by Michael McCain

http://www.aljazeera.net/NR/exeres/3E4656BF-6BD6-4CBD-8CC1-8F79710FC911.htm