The United States could become a net exporter of energy by 2026 as domestic production rebounds and demand at home remains flat, the U.S. Energy Information Administration said Thursday in a new report.
In its Annual Energy Outlook 2017, the EIA sees a surge in natural gas exports and improvement in the trade balance of petroleum products causing the United States to become a net energy exporter by 2026. It would be the first time the nation held that status since 1953.
With 2016 having been one of the most eventful and interesting years for the U.S. domestic oil and natural gas industry in recent memory, 2017 is shaping up to possibly exceed its predecessor on both counts.
The energy world has always been far easier to write about in hindsight than to try to project into the future. In recent years, we’ve seen even some of the industry’s most astute observers end up being spectacularly wrong in their projections: Witness the late Matt Simmons’ long flirtation with “Peak Oil” theory and his assertions the Saudis were about to run out of oil of a decade ago, and the prediction by T. Boone Pickens of $70 oil by the end of 2015 to name just a couple.
The number of countries receiving exported U.S. crude oil has risen since the removal of restrictions on exporting U.S. crude oil in December 2015. U.S. crude oil exports have occurred despite relatively small price spreads between international crude oils and domestic crude oils, as well as other factors that should reduce crude oil exports such as falling U.S. crude oil production and added cargo export costs.
Based on the latest available data, U.S. crude oil exports averaged 501,000 barrels per day (b/d) in the first five months of 2016, 43,000 b/d (9%) more than the full-year 2015 daily average. U.S. exports of crude oil had already increased significantly before the lifting of crude oil export restrictions. These exports were mostly to Canada, which was excluded from the previous restrictions. From 2000 to 2013, U.S. exports rarely surpassed 100,000 b/d. By 2015, the United States was exporting 422,000 b/d to Canada and a total of 26,000 b/d to five other countries.
BP plans to ship 1 million barrels of U.S. crude to Thailand and Australia for the first time, three trade sources said on Wednesday, as the company steps up American oil exports to meet demand in the Asia-Pacific region.
The cargo will add to at least four shipments of U.S. crude by BP to Asia earlier this year after the United States government lifted a decades-old ban on crude exports in late 2015.
“Since the removal of restrictions on exporting U.S. crude oil in December 2015, the number of countries receiving exported U.S. crude has risen sharply. These exports have occurred despite a sustained narrow price premium of international crude oil prices over U.S. domestic crude oil prices, the many costs associated with arranging cargoes for export, and falling U.S. crude production…In the first five months of 2016, U.S. crude oil exports averaged 501,000 barrels per day (b/d), 43,000 b/d (9%) more than the full-year 2015 average.” –Energy Information Administration
The United States remained the world’s top producer of petroleum and natural gas hydrocarbons in 2015, according to U.S. Energy Information Administration estimates. U.S. petroleum and natural gas production first surpassed Russia in 2012, and the United States has been the world’s top producer of natural gas since 2011 and the world’s top producer of petroleum hydrocarbons since 2013.
For the United States and Russia, total petroleum and natural gas hydrocarbon production, in energy content terms, is almost evenly split between petroleum and natural gas. Saudi Arabia’s production, on the other hand, heavily favors petroleum. Total petroleum production is made up of several different types of liquid fuels, including crude oil and lease condensate, tight oil, extra-heavy oil, and bitumen. In addition, various processes produce natural gas plant liquids (NGPL), biofuels, and refinery processing gain, among other possible liquid fuels.
Three months since the US lifted a 40-year ban on oil exports, American crude is flowing to virtually every corner of the market and reshaping the world’s energy map.
Overseas sales, which started on December 31 with a small cargo aboard the Theo T tanker, have been picking up speed. Oil companies including Exxon Mobil Corp and China Petroleum and Chemical Corp have joined independent traders such as Vitol Group BV and Trafigura Ltd Pet. in exporting American crude.
Exxon Mobil Corp. has become the first major U.S. oil company to ship American crude overseas, joining a band of independent traders that are trying to ease a glut at home after a 40-year export ban was lifted.