SALT LAKE CITY — Energy watchers made headlines when they announced oil production in the U.S. may outpace Saudi Arabia by 2020. But what does this mean for Utahns?
Back in November, a report from the World Energy Outlook stated that the U.S. may produce more oil than Saudi Arabia. While there is some debate on the technicalities of what that meant, local analysts say either way it's good news.
Utah Petroleum Association President Lee Peacock said, "It's an exciting prospect; the idea of energy independence. It really bodes well for the years to come for both the country and Utah."
Peacock said refineries in the state will have more materials to process, so they should benefit quite a lot.
"It's nice from an energy security standpoint and, more than anything, from an economic development standpoint," he said.
Peacock believes there may be so much oil produced that changes may have to be made as to how oil comes to local refineries. Oil that is brought into Utah is either trucked in or shipped over pipelines.
So, if the supply of oil is expected to go up, prices should go down, right? Not necessarily. Not with oil. Peacock said oil prices are set internationally, not locally.
If the supply of oil is expected to go up, prices should go down, right? Not necessarily.
"These for-profit businesses will sell their product into the marketplace at whatever the market will bear," he explained.
Plus, a lot of factors go into gas prices.
"The political questions. The environmental questions. All those things play into what that marketplace will look like in the future," he said.