Oil Exports, Lower Net Imports, Greater Energy Security

Mark Green
Posted October 4, 2019

The latest figures on U.S. crude oil exports show growing U.S. energy leadership, while the continued decline in net oil imports signals strengthened American energy security – with both stemming from the revolution in U.S. production. Charts from the U.S. Energy Information Administration (EIA) help illustrate.

First, EIA reports that U.S. crude oil exports rose to average 2.9 million barrels per day (b/d) in the first half of this year – an increase of 966,000 b/d over the same period in 2018. U.S. crude oil exports set a record in June of 3.2 million b/d, and the EIA graph below vividly reflects the sea change in the United States’ oil exporting posture:

This second chart from EIA shows how record domestic oil production (red line) has corresponded with lower U.S. net imports (green line):

EIA says the United States will become a net exporter of total energy beginning this quarter – and the decline in net oil imports is a big reason why:

As we’ve explained in the past – see API Chief Economist Dean Foreman’s post – the U.S. will continue to both import and export oil. A chief factor is that the U.S. refining sector is largely set up to process heavier crude oil produced outside this country, while there’s global demand for the lighter crude grades we’re now producing.

The net result is lower oil imports, and that translates into increased U.S. energy security. Even though we still import oil, we’re increasingly more self-sufficient because of domestic production and less reliant on imports. From a position of growing self-sufficiency, the U.S. strengthens its global energy leadership.

This has been seen most clearly when there are global supply disruptions or the threat of disruptions, such as last month’s attack on an important Saudi Arabian oil processing facility. U.S. supply exerted an important stabilizing effect on global markets and, indeed, helped cushion U.S. consumers against potential negative effects from that disruption. In a follow-up post Foreman wrote:

At a time of energy uncertainty in the world, the U.S. natural gas and oil industry is producing at levels that have helped cushion domestic markets and American consumers against global supply disruptions that once would have put severe pressure on our economy here at home.

Amid these and other benefits – such as gasoline pump prices that in 2018 were about a dollar lower per gallon than they were in 2012 – it’s easy for Americans to forget why it’s important to sustain and grow domestic oil and natural gas production.

We’re stronger as a nation, stronger as a global trader and stronger as a global energy leader because of the domestic energy revolution – something to keep in mind as some on the campaign trail talk about banning hydraulic fracturing and severely constricting access to domestic reserves.

Our nation has been there, done that – and weathered the broad, negative effects of increasing U.S. energy dependence and reduced global leadership. Proposals should be rejected that could return the United States to the era of scarcity.