Why Leading the World in Oil, Natural Gas Output Matters

Mark Green
Posted May 23, 2016

New figures from the U.S. Energy Information Administration show the United States remained the world’s No. 1 producer of oil and natural gas in 2015, a position the U.S. has held since 2012:

Several important points here, supporting the idea that U.S. world energy leadership is a big thing.

First, U.S. production of oil and natural gas grew last year despite continued low prices for crude. U.S. output of petroleum and other liquid fuels grew from 14.08 million barrels per day in 2014 to 15.04 million barrels per day in 2015. According to EIA, natural gas production rose from 74.89 billion cubic feet per day (bcf/d) in 2014 to 78.94 bcf/d in 2015, or about 13.99 million barrels of oil equivalent per day.

The second point is the vast majority of U.S. energy production is the result of safe and responsible hydraulic fracturing and modern horizontal drilling – fracking. EIA says:

Increases in U.S. petroleum and natural gas production over the past several years are directly attributed to production from tight oil and shale gas formations.

Without fracking there’s no U.S. energy revolution.

All of this matters because of the broad benefits to the United States from the ongoing energy revolution:

Consumers – U.S. production is an important factor in lower global crude markets, which translates into lower energy costs for individual Americans and families. AAA says lower prices at the pump allowed each licensed U.S. driver to save an average of more than $550 in 2015. In addition, EIA estimates that since 2008 the average American household has saved almost $750 in annual energy costs:

Security – The United States is importing less crude oil because of increased domestic production. According to EIA, net imports in 2015 were 4.6 million barrels of oil per day, lower than in any year since 1985 (4.2 million barrels per day). EIA projects net crude imports will drop to about 1.5 million barrels of oil per day in 2040.

The result is an America that’s growing more energy self-sufficient and more secure overall in the world because it’s less dependent on others for supply.

At the same time, the United States started exporting domestic crude earlier this year, benefiting friends overseas and strengthening America’s trade posture by bringing wealth into this country. The U.S. also is exporting liquefied natural gas, and EIA projects the U.S. will become a net gas exporter by 2018, reaching 7.5 trillion cubic feet in 2040:

Climate – Growth in U.S. energy output has been accompanied by lower energy-related carbon emissions, thanks primarily to increased use of clean-burning natural gas in power generation. We’ve seen a decoupling of the historic link between economic growth, rising energy production and increased carbon emissions – the U.S. economy is growing, as is energy output, but carbon emissions have fallen. EIA says emissions in 2015 were 12 percent below 2005 levels, despite the fact the economy was 15 percent larger last year than it was in 2005:

Natural gas is the heart of America’s climate progress. Indeed, the U.S. leads the planet in carbon emissions reductions.

The overriding point is that the United States, through innovation, investment and entrepreneurship has become an energy superpower, gaining more control of its own future and gaining opportunities to exert positive energy impacts around the world. We need energy policies that reflect America’s energy superpower status including increased access to offshore reserves. API Executive Vice President Louis Finkel, speaking to reporters last week:

“We must continue to think ahead, explore and develop new areas to protect U.S. energy security for generations to come. If the U.S. is to remain an energy leader and stay competitive at a global level, we must have the foresight to plan ahead. We have an enhanced system of safety with increased capabilities to prevent, contain and respond to any potential incident, and we should not sit idly by while other countries advance technologies and develop resources in areas such as the Arctic and the Atlantic. We urge lawmakers to seize this opportunity to create jobs and support America’s growth as a global energy superpower by lifting outdated roadblocks to safe and responsible energy development.”