Posted April 15, 2015
Wall Street Journal (subscription publication): The U.S. could soon export more energy than it imports, significantly changing the country’s appetite for foreign fuels starting as early as 2020, according to a new report from the Energy Information Administration.
Despite energy prices that are sharply lower today than they were a year ago, the federal government’s new outlook forecasts that U.S. oil and natural gas production will continue to rise over the next five years.
As American drillers keep pumping, the U.S. will meet more of its own energy needs. The trend will also boost the amount of natural gas, refined fuels such as diesel and ultralight oil the U.S. has available to ship overseas, reversing the country’s energy importing trend that has been in place since the 1950s.
Posted April 14, 2015
The U.S. Energy Information Administration’s (EIA) new Annual Energy Outlook for 2015 contains a number of stats, charts and projections, but you could boil them down to a couple of important points.
First, oil and natural gas are and will continue to be the foundation of an all-of-the-above energy approach that’s key to continued U.S. economic growth, energy security and overall security. EIA says oil (36 percent) and natural gas (27 percent) supply 63 percent of America’s energy now, and EIA projects they will supply 62 percent in 2040 (oil 33 percent and natural gas 29 percent). This is because oil and natural gas are high in energy content, portable and reliable. They’re the workhorse fuels of the broader economy, making modern living possible as fuels and as the building blocks for a number of products Americans depend on every day. America is and will be dependent on a variety of energies, but oil and natural gas are and will play leading roles.
The great news is the U.S. is in the midst of a revolution in domestic oil and natural gas production, leading to a second big takeaway from EIA’s report – that domestic output is and will continue to reduce U.S. dependence on imported energy.
Posted April 3, 2015
A couple of data points and some observations on energy security.
First data point: The U.S. Energy Information Administration (EIA) reports that last year the United States enjoyed the largest volume increase in crude oil production since record keeping began in 1900. That’s right, the largest increase in 115 years!
Production of crude (including lease condensate) increased during 2014 by 1.2 million barrels per day to 8.7 million barrels/day. EIA says that on a percentage basis 2014’s output increased 16.2 percent, the highest growth rate since 1940.
You can thank shale and fracking.
Posted February 18, 2015
Posted January 22, 2015
During his State of the Union speech President Obama talked about expanding trade and building up the middle class. Both good objectives. And, while a president’s annual message to Congress usually is full of goals that are mostly aspirational, both of these are attainable – through energy.
First, the president could work to end the ban on the export of domestic crude oil, a relic of the 1970s and an era of U.S. energy scarcity. A supply of light sweet crude, mismatched for a refinery sector largely configured to handle heavier crudes, would be able to reach overseas markets. This would help support domestic production and jobs – many of them well-paying middle-class jobs – while benefitting our trade balance.
Likewise, the administration could stop slow-walking approvals for planned U.S. liquefied natural gas (LNG) facilities to export LNG to non-free trade agreement nations – again, spurring domestic production and jobs and improving America’s trade bottom line.
Both would increase the U.S. presence in global energy markets – expanding world supply, helping allies and strengthening American foreign policy – all consistent with our country’s status as an energy superpower.
Second and more specifically, the president could approve the Keystone XL pipeline. It’s needed energy infrastructure that would bring more than 800,000 barrels of oil a day from Canada and the U.S. Midwest, support tens of thousands of U.S. jobs – good middle-class jobs – and help strengthen the U.S. energy/trading relationship with Canada, our No. 1 source of imported oil.
Posted January 7, 2015
Posted December 29, 2014
The Week: One of the biggest stories of 2014 has been the astonishing drop in global oil prices. The price of the benchmark Brent crude went from over $100 per barrel at the beginning of the year to the $60 range as of this writing.
It's worth noting how massive and completely unexpected this price drop has been.
And it's worth noting how good it is for the U.S. economy. The price of oil is one of the biggest drags on consumer demand, the largest driver of the economy.
And to what do we owe this miraculous event?
In a word: fracking.
Posted December 24, 2014
The gift that is American energy is seen in some key numbers: domestic crude oil production reaching more than 9 million barrels per day last month, the highest level in more than two decades, according to the U.S. Energy Information Administration (EIA); total U.S. net imports of energy as a share of energy consumption falling to their lowest level in nearly 30 years during the first six months of this year; gasoline prices dropping to an average of $2.47 per gallon last week, their lowest point since May 2009, according to the Lundberg Survey Inc.
The first two numbers might not fully register with a lot of Americans. We’ll come back to them. The last one, gasoline prices, does so loudly.
Retail gasoline prices fell after crude oil prices dropped for the fourth straight week – a product of weaker-than-expected global demand and increasing production, which EIA says will save American households $550 next year, Bloomberg News reports. Trilby Lundberg, president of Lundberg Survey to Bloomberg:
“It is a dramatic boon to fuel consumers. (Gasoline) is a modest portion of our giant gross domestic product and yet it does have a pervasive and festive benefit to motorists.”
During this season of gift-giving and receiving, Americans should give thanks for the gifts of plentiful domestic oil and natural gas, modern technologies to harness them and an industry robust and innovative enough to bring the two together, resulting in surging, home-grown production. Indeed, the dramatic increase in U.S. oil production is the key addition to global supply that’s putting downward pressure on the cost of crude, the No. 1 factor in pump prices.
Posted December 23, 2014
Posted June 12, 2014
Bloomberg News: U.S. fuel imports fell to a 15-year seasonal low as refineries processed increasing domestic crude output, moving the nation closer to energy independence.
Deliveries slid 653,000 barrels a day to 1.68 million in the week ended June 6, the fewest for the period since 1999, the Energy Information Administration data showed today. The 28 percent drop was the biggest decline since the week ended June 18, 2013. Fuel imports peaked at 4.97 million barrels a day in October 2005.
“There’s a change in the dynamic,” said Phil Flynn, a senior market analyst at Price Futures Group in Chicago. “We’re not going to stop importing products but the overall number should move lower. We’re turning into a hub where products are both imported and exported based on price.”
Shipments to the U.S. from abroad have dropped as the shale boom provided refiners with an ample supply of cheaper domestic crude to make fuel. West Texas Intermediate, the U.S. benchmark crude, has traded at an average discount of $12 to Brent oil from the North Sea over the past four years. WTI traded at an average premium of more than $1 to the European grade from 1988 to 2008.