For First Time Since 1949, US Exported More Oil Than It Imported
Energy production here may exceed domestic demand by 30% in 2030
For the first time since data began to be collected in 1949, the United States officially exported more petroleum than it imported in September.
The U.S. was already a net exporter of natural gas and coal. In September, the nation also became a net exporter of petroleum, shipping out more than it brought in.
“Some call this milestone U.S. energy independence. The Trump administration refers to it as energy dominance,” said Dean Foreman, chief economist for The Petroleum Institute, a trade organization. "Another way to phrase it is ‘energy interdependence,’ since achieving the milestone has been marked by export-led growth of oil and natural gas."
In late November, researchers at consulting firm Rystad Energy projected that the surplus will persist and grow larger.
The U.S. “will be energy independent on a monthly basis, and by 2030 total primary energy production will outpace primary energy demand by about 30%,” according to Rystad Energy Vice President Sindre Knutsson.
The U.S. produced 373.9 million barrels of oil in September 2019, the most recent data available from the Energy Information Administration. The record was set a month earlier, when the U.S. produced 384.3 million barrels in August. By comparison, the U.S. produced 126.4 million barrels of oil in August 2005.
Improvements in fracking technology are largely responsible for the increased production. For example, in 1993, North Dakota produced 76,000 barrels of oil a day. By 2018, production had increased to 1.3 million barrels per day, a 16-fold increase.
“These changes in the U.S. energy balance could turn its petroleum deficit of $62 billion in 2018 to a surplus of $340 billion by 2030,” Knutsson said. “That adds up to a $400 billion shift, in the space of only a dozen years, thanks primarily to the gargantuan rise of output from the U.S. shale sector.”
As a result, the U.S. will be far less vulnerable to “foreign energy-related politics,” Knutsson added.
But with some Democratic presidential contenders calling for drilling restrictions and rumors of a potential decline in production growth in Texas, the nation’s status as a self-sufficient energy producer and exporter could become fragile.
“As 2020 approaches, let’s keep the energy interdependence milestone in mind but not take it for granted,” Foreman said. “Our country must pursue policies that enable the infrastructure and trade needed to underpin continued U.S. energy prosperity.”
Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.