2 roadblocks to US energy independence

Political opposition to Canadian tar-sands oil and the still expensive natural-gas engines would stand in the way of IEA predictions of self-sufficiency by 2020.

By Jim Cramer Nov 13, 2012 10:05AM

TheStreet logo

Kevin Phillips Digital Vision age fotostockIn a moment when nothing makes us happy, we got a nice feel-good story Monday, that the IEA, the International Energy agency, says we will be energy self-sufficient in 2020 and overtake the Saudis as the biggest exporter of oil in 2030.


To which I say, oh, please, we will never ever again be nationally self-sufficient, but we could be continental self-sufficient, and that in itself would be a big deal.


But we can only do it in two ways: 1.) Choosing to view the Canadian tar sands oil as regular oil that can be refined cleanly, as Honeywell (HON), which makes the refining chemicals, says it can be, and 2.) we switch to natural gas surface fuel.


I don't have great hopes for either under President Obama, and that means you are going to have to start the sufficiency drive in 2017, which doesn't give you a whole heck of a lot of time.


First, the anti-fossil-fuel nonprofits were important to Obama's election. They have no desire to allow Canadian heavy oil to come into the States. I think they are powerful enough to stop it, and that means we will continue to import oil from Venezuela and the Middle East. OPEC wins.

Second, although I had a very optimistic David Demurs from Westport Innovations (WPRT) on the show tonight, the premier nat-gas engine maker, it is very clear that the demand for nat gas engines isn't up to snuff -- hence the missed quarter -- in part because the infrastructure is just not there to pump. Until it is, nat-gas engines remain ultra-niche.


We have a lot more oil than people think we do here in the U.S. But it is mostly contained in the Bakken and Eagle Ford. I have been saying that both could be as big as Prudhoe Bay.


But what we really have excess of, more than anywhere in the world, is natural gas. Unless you can turn natural gas into gasoline, you cannot be as hopeful as the IEA is. That's because the big users of imported oil are trucks. They use one-quarter of our oil. Unless the government can force them to use compressed natural gas (CNG) or liquefied natural gas (LNG), they are not going to switch. Why bother? Sure, the savings are great, but the engines are expensive, and how many places can you really fill up at?


So, breathe a sigh of relief. Get excited about energy self-sufficiency, but remember it can only happen with Canadian crude and CNG/LNG, and right now none of those has the support of the U.S. government.


Jim Cramer's face 


Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust and has no positions in stocks mentioned.



More from TheStreet.com

Nov 13, 2012 12:52PM

Whatever would Exxon Mobil do if we switched everything to natural gas and no longer needed their vast oil reserves. The price for oil would drop like a rock. Better to put it off as long as possible, huh. It's called logic

Nov 13, 2012 11:06AM

we need a salt and pepper approach to collective energy independence.  small solar on every roof.  small windmills in every yard.  natural gas, high MPG cars thru battery-gas hybrids. 


overlaying roof solar in every home would be like overlaying a few energy plants inside every city.  the grid is already there so no more infrastructure is needed. 


let the average person add energy at affordable costs and the country would add energy productivity at incredible rates. 


there are amaizingly small afordable solar and windmill systems in production in usa that the country just doesn't know about.  yet. 

Nov 13, 2012 10:58AM
MADE IN CHINA ! Will be the EPITAPH on our GRAVESTONES !  Happy Holiday shopping !  DIE MULTI- NATIONAL COMPANIES DIE ! Bring back our manufacturing base to AMERICA
Nov 13, 2012 4:16PM
Tax the American People till we Revolt again ! Protect the (TBTF) Banks who act illegal commit criminal acts and get away with murder ! =SCREW THE PEOPLE
Nov 13, 2012 11:10AM
My apologies Jim, for using your article to make a statement to MSN... LISTEN UP, get rid of those steerage Thomson Reuters articles, NOW. What... you think we can't see who's behind them?
"Is it a time to buy?" NO IT ISN'T. And it's grossly negligent to suggest something like that. Is it time to close and reconcile banks, end the Fed and to get RID of Wall Street? ABSOLUTELY.

And now back to your regularly scheduled response. Impediments to energy independence? GOP stalwarts and Big Oil? YES. Michigan just lost out on a GREAT opportunity to shift from corporation controlled utilities and force Big Bureaucracy to go 25% natural by 2025. The underminers said it would cost too much and used THEIR OWN escalating costs as the index in the ads! How STUPID does it get? The more we rely on oil, the more OIL overtakes all other tangibles as the most precious on Earth. Shift to alternatives Water, Sunlight and Wind and the cost doesn't steadily rise, it SHRINKS with ever-increased capacity. This is ridiculous. We are fully capable of boxing up stubborn greedy grubber LOSERS who anchor us to the 20th Century and putting the pedal to the metal on restoring self-sufficiency. Stuff your i-Phone where the sun doesn't shine and erect those wind and solar facilities RIGHT NOW.

I won't submit to big oil. You shouldn't either. 

Nov 13, 2012 12:36PM
"BO's Black Shirts at the EPA will put an end to fracking and with it the end to "cheap" fuel."

Apparently, black shirts are worn by intelligent commonsense people who put a stop to activities that cause EARTHQUAKES?!!!!!!!!!!!!!!!!!!!!!!!!!

Maybe you should leave now, because with that much STUPID leaking from your head, you'll be easy to find.
Nov 13, 2012 1:37PM

 Meanwhile Israel's enriched uranium line in the sand deadline with Iran keeps coming. April I believe it was. If you were playing chess would you wait until the last possible moment to attack or preempt JUST in case your enriched uranium calculations were wrong and April becomes too late

 I'd go for Dec 21, Everybody will be preoccupied with Doomsday Parties and they will never see it coming!
One simple question:

Name ANY nation that, for ANY reason, is disregarding ANY of its' natural resources!


Nov 13, 2012 12:45PM
anyone who has driven south of the border, particularly Argentina and Chile, will have seen that the infrastructure is in place for CNG powered bi-fuel vehicles in and around most urban areas - and has been for years.  So 1) who is going to pony up to put the infrastructure in place here (doesn't sound like the private sector wants to do it) and 2) if the technology for clean fuel CNG is available in so-called 3rd world countries, why don't we just buy it from them and produce the engines here??
Nov 13, 2012 12:29PM
Jimmy I know you wont read this but ,perhaps someone may. It is a world ,thing now .Lets suck the world dry ,first, before we start suking more upon the US . We need to be ,the last man  standing ,so to speak . We must be fisable , and we can , If we shut down , if we stop buying, What, really will happen ? . I feel we need to learn from the old English rule . but not march down the center path ,of the battle field , in plain sight , Chinas not , and stealing all they can on the way , They all have black hair and brown eyes , they are easy to spot. America needs to stop being lead around by there noses , we need 2 stop the bleeding and take over the ship before we can't . china , India nip it at the bud before we are unable , and become a peanut like the brits , English business law needs 2 stay in effect , lawlessness will be the end of the civil world , . I am 2 old 2 really care  I have 0 children .
Nov 13, 2012 12:08PM
You mean none of these are supported by Mr. Obama, who doesn't acknowledge natural gas, and blocked the latest oil pipeline to support the Bakken. I guess we can put solar cells, or wind mills on the trucks instead of using natural gas. 
Nov 13, 2012 1:29PM

 How much our deficit is funded by Saudi Arabia and other friendly Middle East oil countries. Was a deal to do so struck with them long ago if the need should ever arise? Maybe for building the place for them and giving protection when needed? And keeping the dollar as the fiat currency for purchasing oil forever
Nov 13, 2012 11:46AM
So CNBC has it's "Rise Above" message exhorting politicians to compromise yet they bash the President at virtually every opportunity.

from the money phoney bartiromo to frodo kaminsky and the mediocre santelli and of course the hindenberg of hot air cramer himself.....

Practice what you preach.........

Journalism in this Country died on Sept 12th 2001.
Nov 13, 2012 11:30AM
There's only one barrier, Barack Obama.
Nov 13, 2012 11:26AM
Amazing, you do identify two of the major impediments to energy independence (AND falling trade deficits AND lots of high paying American technical jobs) and yet we can't do it because your president, Jim, not smart economics will stop it.  Pathetic.
Nov 13, 2012 12:56PM

 If we had nationalized energy like they do in most of the REST of the world including Canada and Mexico, we could convert to natural gas without being obsessed with the need to make a large profit off of it
Nov 13, 2012 12:23PM
Cramer didn't even mention the most salient barrier to fossil fuel self sufficiency: fracking. BO's Black Shirts at the EPA will put an end to fracking and with it the end to "cheap" fuel. His Black Shirts have been stopped to date by 3 separate federal courts. Since he appoints federal judges and Dirty Harry provides the votes for "advise and consent", it's only a matter of time before to finds the "right" judge, the "right" appellate court, and/or the "right" Supreme Court to kill fracking. Hello, Greece, move over, you have company!
Nov 13, 2012 3:39PM

I think the Obama approach is correct if indeed he follows that path. An all inclusive energy mix near evenly distributed between oil, coal, nat gas, nuclear, water, wind, and solar. We need a gradual but staedy  turnover from oil and coal to cleaner fuels such as nuclear, water, and nat gas. In the future, having 25% of our energy produced from renewable wind and solar is a legitimate and reachable goal. With water, that could go up to 40%.


 Oil will have to remain the primary transportation fuel for decades, but the natural evolution towards electric and natural gas will occur. Start with powering the semi tractor trailers away from diesel and into LNG. That is where to start and will dramatically reduce harmful emmisions. CNG can transistion  with public transportation, and electric with government vehicles, rentals, and leases.  The infrastructure will be much simpler to construct if given local and specific parameters. Personal vehicles will have to be the last to transistion, if at all.  The national  infrastucture to build out will not likely be cost effective in our lifetime.


I don't think it is a good idea to have any one specific form of energy as becoming too dominant. Spreading it out near evenly gives us plenty of options as technology evolves while not becoming too dependant on any one source. Also keeps our workforce and education sectors  fully engaged.



Nov 13, 2012 1:58PM

 Here Israel is about to attack Iran and the leaders of our CIA and the military are online writing tens of  thousands of sexually explicit e-mails to call girls. probably a lot of phone sex in between given how horny they were. How much time could have been left over for briefings? 
Paterno, Armstrong, Petraeus.   Next up: Neil Armstrong and Mr Rogers were NOT nice guys! Expose' to follow on Entertainment Tonight
Nov 13, 2012 1:11PM

Let me phrase it another way. What if Exxon was only allowed a generous 50% mark-up over production costs instead of putting their product in a World Market Pool where they can sell it to the highest bidder. What would the price of oil and gas be then?
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
100 character limit
Are you sure you want to delete this comment?


Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.


StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

125 rated 1
267 rated 2
455 rated 3
612 rated 4
682 rated 5
695 rated 6
632 rated 7
472 rated 8
279 rated 9
147 rated 10

Top Picks

TAT&T Inc9



Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.