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

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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.

 

 

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55Comments
Nov 13, 2012 12:45PM
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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 12:36PM
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"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 12:34PM
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What does the Associated Press mean when it says: Stocks are shrugging off Europe Woes? They are NOT. Banks sold more worthless credit to the DEAD FED and are self-bailing themselves. It happens weekly. Banks and Terrorist Fund Groups (no exposure or investment on Main Street and no use to America) keep propping up stone cold dead complex financial vessels, they don't actually know how to conduct or grow businesses we can use. What is the 4-year growth rate tally on family sustaining jobs that aren't paper or button pushing or administrative? ZERO. That has to do with the President, it has everything to do with GOP control in Congress and a failure in the financial and business sectors to be significant to all of America. We're $16 Trillion in debt from businesses and commercially-orchestrated wars. Just WHO runs us? If you are making money today, you are pulling it from what's left of our economy or creating more debt. Both acts are anti-American. Time to pull the plug on financial thugs and grubbers. What cost is Freedom? Too much for you so stop treading on me and restore us or LEAVE BROKEN AND BROKE.  
Nov 13, 2012 12:29PM
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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 12:23PM
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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 12:08PM
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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 11:46AM
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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.
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CLNE is doing alright with setting up their nat-gas trucking stations.  We need more for automobiles, but this President is all about Green Energy so the American people will have to settle for $10.00 per gallon gas for our President's King Saud & Co., subpar energy production with Wind and Solar, along with making all people into vegetarians (anti-cow farts).   Did we really wake up on Wednesday morning with this same President or did we finally pass through into the Twilight Zone? 
Nov 13, 2012 11:30AM
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There's only one barrier, Barack Obama.
Nov 13, 2012 11:30AM
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There's only one barrier, Barack Obama.
Nov 13, 2012 11:26AM
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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 11:10AM
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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 11:06AM
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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. 

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hmmm we drained Prudhoe Bay in about 40 years much of that drain coming from lower oil use than we have now.

 

The truth is we do not have enough oil in the ground to push us above the Saudia oil production even if we trash the east and west coasts where most of the oil is or develope the shale oil in the western desert states and burn 1 barrel of oil for every two we get.

 

Pretty much this gas boom we are going thru will last about another ten years and the new natural gas is gone. In the meantime we would have totally destroyed the underground water supply our farmers rely on now to farm with.

 

Considering we import about 40 percent of our food now and if we destroy half the farm land by ruining the underground water with fracking or what ever it is called then we will be importing 70 percent of our food at a time the US dollar is losing it's world currency status.

 

Yep all this is very very wasteful and with the coming fiscal disaster coming and not the fiscal cliff that will almost correct the problem. I am talking about the 20 trillion debt we have and the oming 10 percent interest we are going to have to pay on that debt once the world realizes the US dollar is not worth the paper or electrons (as most money is now in electronic form not printed form) it is printed on.

 

Things are going to get very very tough next year and the stock market and housing market are going to collapse. The housing market is being fulled by investors being loaned billions of dollars to buy house which no one can afford. After the investors take their 30 percent profit by jacking up the housing prices who will be able to afford them???

 

The only winners there will be the first line of investors who buy now and sell to the next wave of investors who will take the money hit when housing collapses to where a family living on $40K a year can afford a house. That is just reality folks.

 

Nov 13, 2012 10:58AM
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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
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