US to become leading fuel producer
November 19, 2012, 01:34 pm
The International Energy Agency expects that the United States will overtake Saudi Arabia as the world's leading oil producer, the Wall Street Journal reported.
"By around 2020, the United States is projected to become the largest global oil producer [and to overtake Saudi Arabia for a time]," read the report by the IEA. "The result is a continued fall in U.S. oil imports [currently at 20 percent of its needs] to the extent that North America becomes a net oil exporter around 2030."
The U.S. passed Russia in 2009 to become the world's largest producer of dry natural gas after utilizing hydraulic fracturing and directional drilling. As a result of the oil shift, the IEA predicts that U.S. oil imports will be cut in half over the next decade to 4 million barrels a day. The agency cited that while much of the dependency on foreign oil will stop when the U.S. becomes the No. 1 producer in the world, but U.S. efforts to improve fuel efficiency in the transport sector is another factor. The U.S. government is requiring that by 2025, the corporate average fuel economy standards will average 54.5 miles per gallon in the automotive industry.
The U.S. becoming a leader in fuel production would seem like positive news for the aviation community, but it's not that simple. The fuel used in planes, known as avgas, is extracted from Saudi Arabia and is high-grade. The fuel production in the United States will come from shale fields that are lower-grade when compared to the sweet crude of Saudi Arabia. Jet-A fuel on the other hand is easily produced from shale oil and will therefore lower the price for the aviation community.
In a separate report pertaining to fuel in the aviation sector, BP recently announced that it is abandoning plans to build a commercial-scale cellulosic-ethanol plant in Highlands County, Florida. The plant would have produced 36 million gallons of cellulosic ethanol each year, a renewable fuel made from non-food crops including switchgrass and wood cuttings, but was sidelined by BP, which said it will continue to focus on research and development by investing in renewable fuel projects in England and Brazil and for renewable fuel research and development in San Diego.
Despite the uncertainty surrounding fuel prices for general aviation in the coming years, pilots can ensure their own financial future by obtaining pilot life insurance.
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