Some good things are happening on the energy front in the U.S. – perhaps the most critical being that our nation’s importation of oil has reached its lowest level in almost 20 years. That’s a significant and largely unheralded achievement, particularly as our country is being hailed as the next Saudi Arabia when it comes to energy production.
What does that mean for trucking? Well for starters it means diesel fuel is going to remain far and away the most critical ingredient in commercial vehicle propulsion.
Take for example the view of Dr. Wolfgang Bernhard (seen at right), the new head of Daimler Trucks North America.
“My alternative fuel is diesel because I don’t see any replacement for diesel in the long run,” he said during a recent speech at the 2014 Mid America Trucking Show. “We still have 200 times more diesel stations than stations, and engines must be up for the task of hauling long distances.”
So let’s take a look at the U.S. energy picture. For starters, according to data tracked by the Energy Information Administration, total U.S. net imports of energy – measured in terms of energy content – declined in 2013 to their lowest level in more than two decades.
Growth in the production of oil and natural gas displaced imports and supported increased petroleum product exports, driving most of the decline, with a large drop in energy imports together with a smaller increase in energy exports led to a 19% decrease in net energy imports from 2012 to 2013, the agency said.
Total energy imports declined faster—down 9% from 2012 to 2013—than in the previous year, EIA added, while export growth slowed. Crude oil production grew 15%, about the same pace as in 2012, which led imports of crude oil to decrease by 12%, accounting for much of the overall decline in imports.
Preliminary 2013 data for U.S. total energy consumption, production, and trade reflect the cumulative effect of changes in energy markets over the year, the agency noted. On top of that, total U.S. primary energy consumption increased 2.4% after declining in 2011 and 2012, with renewable energy providing the largest percentage increase – though it’s interesting to note that EIA’s data indicates that residential sector consumption increased the most, while transportation sector consumption increased the least.
Here’s another look at the nation’s energy picture gleaned from the CIT Group Inc.’s 2014 U.S. Energy Outlook that’s based on a survey of 141 senior, U.S.-based executives of “middle market” energy companies generating between $25 million to $1 billion in annual sales.
Most encouraging is that nearly half (49%) say energy independence is likely for the U.S. in the foreseeable future, with 40% saying within six to 10 years. Key factors include expanded natural gas production (cited by 74% of respondents), significant new domestic energy discoveries (60%) and approvals of infrastructure projects (e.g., the Keystone XL Pipeline, at 57%).
Over 81% of those executives polled described 2013 as a profitable year, with nearly identical (82%) expectations for 2014. The three-to-five-year energy sector outlook is even more positive, with 91% of executives anticipating they will be profitable (53%) or very profitable (38%), and 23% describing their outlook as “aggressive,” meaning focused on above average investment and growth.
Of course, increased demand and the resulting investment aimed at mire profitability means energy executives are expecting price increase for oil and natural gas as well:
Perhaps unsurprisingly, U.S. energy policy – or the lack of it – is a growing concern among the energy executives CIT polled.
That’s a lot for trucking to chew on, no doubt, especially with projections of oil price increases no doubt leading to further increases in diesel costs. Yet if America can achieve energy independence and in turn start selling surplus energy on the world market that might eventually help lower diesel costs here at home. We’ll have to wait and see.