The decline last year was mainly due to record exports of crude oil and petroleum products, made possible since
If you recall, during the second presidential debate in October 2016, Hillary Clinton falsely claimed that the U.S. is “now, for the first time ever, energy independent.” Many were quick to point out the inaccuracies. For one, the U.S. has been a net energy exporter before, most recently in the 1950s. And two, America isn’t currently energy independent.
But that could change very soon. As I told you in February, the Energy Information Administration (EIA) estimates the U.S. will become a net exporter of energy by as early as 2022, and the agency recently shared fresh data that supports the narrative that America is on the cusp of taking the throne as the world’s leading energy powerhouse.
The Quest for American Energy Dominance
According to the EIA, U.S. net energy imports in 2017 fell to their lowest levels since 1982. From its high in 2007 of 34.7 quadrillion British thermal units (Btu), the difference between exports and imports has fallen steadily to 7.32 Btu, slightly above the 7.25 Btu in 1982.
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The decline last year was mainly due to record exports of crude oil and petroleum products, made possible since Congress lifted the U.S. oil export ban in December 2015.
And for the first time since 1957, the U.S. exported more liquefied natural gas (LNG) than it imported. Between 2016 and 2017, natural gas exports quadrupled from 0.5 billion cubic feet per day (Bcf/d) to 1.94 Bcf/d. The EIA attributes this acceleration to the expansion of export facilities in Louisiana and Maryland, with six additional ones currently under construction, according to Energy Secretary Rick Perry. As a result, the International Energy Agency (IEA) projects the U.S. will become the world’s leading LNG exporter by the mid-2020s.
All of this follows news that the U.S. is now the world’s number two crude oil producer. Late last year, U.S. output exceeded 10 million barrels a day for the first time since 1970, thanks largely to the surge in fracking and horizontal drilling activity. This helped push the country ahead of OPEC leader Saudi Arabia, and, by 2019, it could surpass Russia to become the largest producer in the world.
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Oil Majors Reward Shareholders
Some resource investors might worry that all this extra supply could depress prices and hurt profits. That’s a valid concern, but it’s worth pointing out that since its recent low of $26 a barrel in February 2016, the oil price has surged nearly 150 percent—all while the number of active wells in North America has risen.
It doesn’t hurt, of course, that demand for petroleum products is just as strong as it’s ever been right now. According to the latest …read more
Source:: Frank Talk
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