The People of America's Oil and Natural Gas Indusry

Crude Exports to Help Grow the U.S. Energy Revolution

Mark Green

Mark Green
Posted April 7, 2015

Following on yesterday’s post on increased domestic energy production that is backing out imports, we see that the U.S. remained No. 1 in the world in the production of petroleum and natural gas hydrocarbons last year, according to the U.S. Energy Information Administration (EIA).

The government agency responsible for quantifying all things energy says that U.S. oil and natural gas production has been trending higher than the output of Russia and Saudi Arabia, the second- and third-largest producers:

Since 2008, U.S. petroleum production has increased by more than 11 quadrillion British thermal units (Btu), with dramatic growth in Texas and North Dakota. Despite the 50% decline in crude oil prices that occurred in the second half of last year, U.S. petroleum production still increased by 3 quadrillion Btu (1.6 million barrels per day) in 2014. Natural gas production—largely from the eastern United States—increased by 5 quadrillion Btu (13.9 billion cubic feet per day) over the past five years. Combined hydrocarbon output in Russia increased by 3 quadrillion Btu and in Saudi Arabia by 4 quadrillion Btu over the past five years.

EIA’s chart:


EIA says the growth of U.S. oil and natural gas production is “directly attributed to its success at exploiting tight oil formations and shale gas …” In its latest short-term energy outlook, EIA reports U.S. crude production at 9.3 million barrels per day (bpd) in March and projects total crude output will average 9.2 million bpd for this year and 9.3 million bpd in 2016. Again, this domestic production is reducing imports. EIA:

The growth in domestic crude oil and other liquids production has contributed to a significant decline in imports. The share of total U.S. liquid fuels consumption met by net imports fell from 60% in 2005 to an estimated 26% in 2014. EIA expects the net import share to decline to 21% in 2016, which would be the lowest level since 1969.

Few would disagree that this EIA information reflects a positive U.S. energy picture, one of greater self-sufficiency and security in the world. Yesterday’s post argued that access to domestic oil and natural gas reserves is vital to keeping these trend lines moving up.

But here’s another key factor for domestic energy growth: exports. Specifically, U.S. oil producers need access to global markets – something that’s virtually closed to them because of a 1970s-era ban on domestic crude exports.

In addition to the significant economic benefits, lower costs for consumers and new foreign policy opportunities stemming from U.S. oil exports, a number of recent studies detail how exports would stimulate more U.S. production.

Right now the crude export ban is presenting a “binding constraint” on the domestic market, as a new Rice University study put it. The result is a growing share of light U.S. crude that can only be sold at a discount compared to global prices because so many potential buyers are outside the U.S. – a situation that’s heightened in the current low-price environment.

The ban is a disincentive to domestic energy investment and production. Removing it would have the opposite effect. From a NERA Economic Consulting study done for Brookings:

Lifting the export ban would remove an artificial barrier to crude oil production, thus allowing the U.S. to take full advantage of its competitive cost advantage in the production of crude oil versus producers in other parts of the world. … The immediate effect of lifting the ban on exports would be to increase investment in oil exploration and development, and thereby increase domestic crude oil production.

The U.S. energy revolution is an historic opportunity, given the importance of secure energy sources to economic strength, national security and America’s place in the world. With pro-energy development policies – access to reserves, a common-sense regulatory approach and participation in global energy markets – the U.S. can safely grow the revolution and maximize its benefits.


Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Mark also was a reporter, copy editor and sports editor. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela live in Occoquan, Va., where they enjoy their four grandchildren.