Why does the U.S. Import AND Export Oil? Profits.

As gasoline prices rise, should the U.S. oil industry stop exporting? With oil at over $100 a barrel, the big oil companies and the Republicans have been begging, "Drill, baby, drill - - and sell it to China!"

U.S. gas prices are soaring and domestic demand is falling. At the same time that the price of gasoline is rising, the U.S. oil industry is increasing its exports of gasoline, diesel, and jet fuel. The oil industry claims it needs to export to "stay in business and avoid layoffs" (The Republican's argument for oil subsidies is just as outrageous). Plain common sense tells most of us that exporting oil and gasoline keeps supplies low and our prices high.

Geologists have long known that shale basins across the country, like the Bakken field in North Dakota, Eagle Ford and Barnett in Texas, and the Marcellus in the Northeast, held tremendous oil and gas reserves. But energy companies had no economic way to collect them until new technology recently changed that.

Last year production at Eagle Ford alone reached 30.5 million barrels and it is still growing. Natural gas production there went from ZERO cubic feet to 243 billion cubic feet. Where is it? Where did it go?

The North American energy revival is primarily the result of unconventional sources of energy — like shale oil and shale gas across the United States, oil sands in Canada and deepwater production in the Gulf of Mexico. In the last five years, the United States and Canada combined have become the fastest-growing sources of new oil supplies around the world, overtaking producers like Russia and Saudi Arabia.

Rex W. Tillerson, the chairman and chief executive of Exxon Mobil, said “The transformation unfolding in North America represents a potentially decisive shift in the history of energy.”

In a study released last year by oil lobbyists on K Street - the National Petroleum Council -- they forecast that North American oil production could exceed 20 million barrels a day by 2035. Some experts are more bullish. Mr. Morse of Citigroup forecast that North American oil production could reach an astounding 27 million barrels a day by 2020, almost twice the rate of production of 15 million barrels a day at the end of 2011. (Production from the United States could grow to 15.6 million barrels a day by 2020, up from nine million barrels a day in 2011).

If that trend continues, the growth in oil and natural gas supplies in the next decades could turn the United States into a top energy exporter, rivaling some members of the Organization of the Petroleum Exporting Countries (OPEC).

The new supplies ensure that the United States will remain well entrenched in oil...as well as flush with a glut of natural gas supplies. It's estimated that at current consumption rates, American gas reserves would last at least 75 years [if not exported], an estimate some experts say is conservative.

But there is no guarantee that new supplies will inevitably lead to lower gasoline prices. Oil is a "global commodity" with a price set on the global market to maximize profits. With rising demand around the world, particularly in emerging economies such as India and China, and instability in many oil-producing countries in the Middle East like Iran, many analysts predict global oil prices will remain volatile — and high — for many years to come.

America's natural resources like natural gas would be sold to Mexico and Canada (because exploiting oil sands is so energy-intensive, Canada might have to import natural gas to produce its oil). Refined petroleum products like gasoline, and even crude oil, could find customers in Europe and Latin America.

And our abundance of coal would also be exported to China, rather than holding the excess supplies of oil, gas, and coal in reserve for future domestic use, to keep prices down. Instead, these energy sources would be sold to other countries for the highest profit by privately owned energy companies, providing larger paychecks to their CEOs (who, besides the banks, are also big shareholders)

The growth in domestic oil and natural gas supplies in the next decades could turn the United States into a top energy exporter, rivaling some members of OPEC.

With less domestic gasoline demand in the U.S., the nation’s surplus refining capacity means the United States is already exporting petroleum products — like gasoline and diesel. The United States is now the top exporter of refined products, just ahead of Russia.

The United States has been a net oil importer since the middle of the last century. America’s dependence on imports grew as the country’s consumption rose and domestic production dropped, and reached a peak in 2005. That year, domestic consumption of oil was about 21 million barrels of oil a day — a quarter of global oil demand. More than two-thirds of that was imported.

Americans are buying fewer cars, and they are driving shorter distances, and getting better gas mileage...but the price of gasoline keeps going higher because of the demand in countries like China, who are adding millions of cars to their roads every year. Our oil goes to China to help subsidize their gasoline prices at $2.50 a gallon. (Gasoline is only much higher in Europe because of their fuel taxes).

Opponents to the Keystone XL Pipeline say oil imported from Canada would also be exported to countries like China for the cost of oil (or refined gasoline) on the work market. How could the U.S. benefit from this, or from a glut of natural gas, if it's just sold elsewhere to the highest bid by America's privately own energy companies?

They are also concerned about the effects on underground aquifers of hydraulic fracturing.

Cheaper energy costs, particularly for natural gas (if not exported to the highest bid), could have benefited a variety of domestic industries. The rise in natural gas production has already led many utility companies to shift their electrical production away from coal; it also calls into question talk of a nuclear revival in the United States.

Economists say that ample gas supplies could have also provided the basis for a resurgence of American manufacturing, which has been battered by high energy costs for much of the last decade. The current glut has driven prices back down again, to near $2 for a thousand cubic feet. But how long will that last?

But then, the New York Times also says, "With America becoming one of the top natural gas producers, some domestic companies might rethink moving parts of their business to countries with cheaper energy costs." What does THAT mean?

According to Citigroup, “In a world of high energy prices, the potential economic activity generated by this wave of new hydrocarbon production is extraordinary and should strongly boost national output, increase incomes, create wealth, stimulate consumption and create jobs.” (But who can believe anything Citigroup tells us? And like most big banks, they also own HUGE blocks of shares in oil companies).

Lower natural gas costs could also have cascading benefits to other commercial sectors, like retailing. Shipping costs may be lower, particularly if transportation companies shift their fleets to natural gas-powered or electric vehicles. FedEx, for instance, has already been adding clean energy trucks to its fleet, including hybrid and all-electric delivery trucks in cities like Chicago.

The rise in fuel efficiency in conventional vehicles, along with the growing popularity of hybrids, might also mean all-electric cars might struggle to gain market share, this according to a report released last year by the Boston Consulting Group, where Mitt Romney worked before Bain Capital. (Electric cars in the European Union and China are likely to benefit from government support, but the oil companies here are against anything that would reduce our reliance on their products.)

For 20 years, Democrats opposed opening public lands to oil production and Republicans opposed increases in fuel economy standards. The United States was once viewed as an energy-depleted nation, to a growing view of an energy-rich superpower. Well then again, why are gasoline prices so high? The oil companies, not satisfied with their current record-high profits, want to drill on federal lands with cheaper leases, as opposed to paying higher royalties for mineral rights on private lands.

The financial firm Raymond James predicted that by 2020, the United States would not need to import foreign oil anymore. “The resulting savings from the standpoint of the trade deficit are highly meaningful,” the analysts said, “especially when the benefits of cheaper energy for domestic manufacturing are taken into account. Maybe the real question is, When will Washington apply to join OPEC?”

Nationalism over natural resources in countries like Venezuela, Russia and much of the Middle East has increasingly forced Western oil companies to look for oil and gas closer to home. And exports are already shrinking for many OPEC producers as their own domestic demand soars — a result of energy subsidies that keep THEIR prices low.

James Brick, an energy analyst with Wood Mackenzie, a research firm, said in a recent report that by 2030 the United States could end up exporting 500 million tons of coal a year, 3.2 billion cubic feet a day of natural gas and 2.5 million barrels a day of oil products. (Well then again, why are our heating and gasoline prices so high?)

“The United States will be playing a very different role on the energy markets, a much more international role and a much more complicated and sophisticated one,” said Mr. Brick. “No matter how you cut it, the United States has the resources in the ground.”

Yes, but America's natural resources don't belong to the American people; they're exploited for profits by privately owned energy companies.

The website Just Another Cover-Up recently featured an enlightening article by Mitch Gurney that highlights the world of speculators and deregulation called Analysis of 60 Minutes: Did Speculation Fuel Oil Price Swings?

Mitch Gurney writes that "the deregulation of the commodity markets enabled major investment firms to control the price of oil over traditional economic theories of supply versus demand...this allows them to have an unfair advantage in determining the commodities market, and is nothing other than insider trading."

This is why I proposed an idea about the Keystone Pipeline, funding a massive non-profit public works program to build an oil company that's operated and owned by our government (the people). The more oil that Exxon and others find and drill, the more they will export for private profits -- just to stuff cash into the pockets of their CEOs. Like anything else, just follow the $$$.

I would go as far as nationalizing the oil and gas companies, producing our domestic energy AT COST to consumers, businesses and our military -- and cut out the middlemen that manipulate and profit from our natural resources - - then watch how fast our economy will grow then!!!

(* Editor's Note: This post was excerpted and edited from a version of this article that appeared in print on April 11, 2012, on page F1 of the New York edition with the headline: Fuel to Burn: Now What?)