A good example of energy independence comes from Canada, which feeds 29 percent of the United States' oil appetite. Though the country is a net exporter, gas prices remain higher than the United States, mostly because of taxes. While 11 percent of the price of a gallon of U.S. gasoline goes to pay taxes, 31 percent of Canadian pump prices pay taxes. That turns into dollars per gallon in Europe, experts say.
But consumer demand is going down, which would lower production, if the U.S. didn't have a ready market elsewhere.
"With lower oil output, there's less supply, which would translate to higher gas prices," said Adam Bedard, an oil and gas analyst in Denver, a partner in PA Consulting. "In the global scheme, the energy use per person is going down in almost every country."
In the United States, especially, more efficient fuel standards are coming into play, reducing oil demand.
What's keeping that demand on pace are the growing oil and gas demands from China, India and other developing countries.
"One of the neat dynamics in the U.S., supply is growing and demand is shrinking, so that's why we're going to be exporting," Bedard said.
Today the United States, as the biggest oil consumer in the world, doesn't produce as much as it consumes, putting foreign imports in high demand. The same is true of Colorado -- even with all those rigs dotting the horizon in eastern Weld, where most of Colorado's crude is produced.
Colorado consumes about 92 million barrels of oil a year, or 252,000 barrels per day, but it produces only about 43 percent of that need. Colorado as a whole produced only 1.7 percent of the country's need in 2010, according to the US Energy Information Association.
Colorado must then import from other states, usually Texas and Oklahoma.
But production is growing every year, with the advent of new technologies involving horizontal drilling, which has transformed Weld County's drilling numbers, now on pace to help Colorado surpass a 40-year-old record.
Here in the Rocky Mountains, oil, and a facility to refine it into gas, Suncor Energy, are in our backyard. Transportation costs are at a minimum. As a result, most of the oil produced in the Rockies goes right back into Colorado fuel pumps, or jets or roads in the form of asphalt.
The fact that Colorado is producing more oil all the time already is helping just by putting more supply into the mix, as well as several other developing areas across the country. By mere geography and available refining capacity, prices tend to be cheaper -- about 50 cents a gallon -- than either of the coastal seaboards because the infrastructure is not fully in place to transport crude from the center of the country, where much of the production is occurring.
Suncor's refining capacity limits of roughly 100,000 barrels of oil per day push much of the oil produced out to other markets to be refined. Colorado's total production last year was at 106,974 barrels per day, but it competed for Suncor's refining space with oil from Montana, Wyoming, North Dakota and a small percentage from Canada. Suncor, for proprietary reasons, will not reveal the exact percentages of its intake, but most of the Colorado crude is refined and sold at home, said Lisha Burnett, spokeswoman for Suncor.
Nationally, oil production is expected to increase substantially in the next few years, as horizontal drilling and fracking technologies bring life to old plays from Texas to Colorado to Ohio. Companies also are now testing northeastern Nevada for its prospects.
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