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Is energy independence a fantasy?

Can America's vast shale oil and gas reserves – combined with fracking and drilling technlogies – drive the U.S. to complete energy independence? It looks doubtful, according to OilPrice.com and a report from Credit Suisse.

By Keith SchaeferGuest blogger / October 1, 2012

In this July 2012 file photo, Gulf Power lineman Tommy Williams, of Pensacola, Fla., installs a bolt on a power line pole as his crew repairs downed power lines after a severe storm in Middleburg, Va. A report from Credit Suisse says that massive infrastructure spending is a key to energy independence.

Cliff Owen/AP/File

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The U.S. has become the world's second-biggest oil producer – having passed Russia, and trailing only Saudi Arabia

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But can America's vast shale oil and gas reserves – combined with fracking and drilling technlogies – drive the U.S. to complete energy independence?
According to a report from Credit Suisse, the answer is NO. 

But it does suggest that North America in its entirety could one day become energy self-sufficient.

Credit Suisse (CS) bases their findings on these 4 factors:

1. Flow rates from oil wells about 25% higher than now, based on future technology advances
2. More wells that are on average 39% closer together than they are now (what is referred to as  "downspacing" in the oil industry)
3. $95/barrel Brent pricing
4. Increased use of natural gas in the economy?

CS also determined the following constraints to becoming energy self-sufficient:?

1. Fast declining production in shale wells
2. Oil below $75/barrel
3. Enough money to build pipelines and refineries??

CS says US oil production will peak out at 10 million barrels of oil per day (bopd) by around 2022—a double from 2008’s 5 million. 2011 oil production in the US was 5.7 million bopd. 

EIA stats show petroleum consumption has fallen steadily for seven years, and in 2011 was 18.8 million bopd—the same as 1997 and 2 million bopd below the peak in 2005.?

Once you include 3 million barrels of US liquids production (natural gas liquids like propane, butane, condensate and biofuels), overall production was still less than 9 million boepd—not even half of the country's total demand of 19.2 million barrels of oil equivalent per day (boepd).? (RELATED: Will a Melting Arctic Help Postpone Peak Oil?)

Canada and Mexico are comparatively small consumers, using only 4.4 million bopd, with combined overall oil and liquids production of 6.6 million boepd of oil and NGLs.

All these numbers show that overall, the U.S. is falling short by 10.7 million boepd itself, and North America as a whole comes up around 8.8 million boepd shy of total demand.

That means that in order for American to become energy independent, it would have to be producing and refining 10.7 million boepd more than it does now. That would be extremely difficult to achieve.

CS expects U.S. oil and liquids production to rise from the current 8.7 million boepd to around 15 million boepd by 2022, while demand will slump closer to 18 million boepd. A modest jump in Canadian output paired with continuing low demand will help bridge the shrinking supply gap, moving North America closer to energy independence. And that assumes a steady decline from Mexico.?

The crux of the report's predictions lies in the Americans' ability to tap their massive unconventional oil resources.

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