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 6:39PM
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Oh, ye of little faith. Would you ever have predicted four years ago that the U.S. would be producing record amounts of energy under Obama?
Nov 13, 2012 4:55PM
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Congress choice to investigate Petraeus !  Like the Fox guarding the Hen House ! It is not Congress choice it is We the American People's choice TO KNOW WHAT HAPPENED ? SCREW CONGRESS investigate the General !

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One simple question:

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

THAT IS REASON ENOUGH WHY WE SHOULD NOT BE HUMORING ANY IDIOTIC NOTION OF DOING ANY SUCH THING!

Nov 13, 2012 4:16PM
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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 3:39PM
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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 2:34PM
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Thank God we have the right guy in the WH who will be open to all types of energy.People

with education realize that.

Nov 13, 2012 1:58PM
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 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 1:37PM
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 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!
Nov 13, 2012 1:29PM
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 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 1:11PM
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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?
Nov 13, 2012 1:00PM
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 What would be the price of oil and gas if there was a law that said all oil found on US soil MUST be consumed on US soil
Nov 13, 2012 12:59PM
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don't leave out the brilliant bachman and palin
Nov 13, 2012 12:56PM
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 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 12:54PM
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Obama stands in the way of energy independence.  Four more years of misery.
Nov 13, 2012 12:53PM
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the uneducated conservatives say they want to take our country back, but they don't say

how far back.......perhaps back to flat earth christianity

Nov 13, 2012 12:52PM
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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 12:49PM
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cramer has been pushing dividend stocks .....hmmm no wonder they're getting crushed

 

cmon fools .....dividends can be cut at any time and provide negligible protection

Nov 13, 2012 12:48PM
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under the "barrier" of obama the dow went from 6000 to 13000
Nov 13, 2012 12:46PM
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The latest Gallup poll shows Romney beating Obama 51- 46!! Oh wait. I'm in denial every morning when I wake up
 Don't you miss the hope, dudes. Let's start the campaign for 2016  NOW so we can go on like it never even happened. Start with a GOP debate next week between Christie, Ryan  Perry, Corker, Paul, Cain and Sanitarium.Excuse me while I barf at the thought
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