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Energy Tomorrow Blog

The Collision Between U.S.-China Trade Policy and LNG Exports

liquid natural gas  lng exports  trade  china 

Dean Foreman

Dean Foreman
Posted January 14, 2019

The U.S. set new natural gas and oil production and export records in the fourth quarter of 2018, even as the administration's trade war with China continued to escalate. As 2018 trade figures have become clear, an emerging consequence was decreased U.S. liquefied natural gas (LNG) cargoes to China, which fell by around 20 percent from 2017, as these shipments became subject to a 10 percent Chinese import tariff effective Sept. 24.

Americans should care about the health of these U.S. natural gas exports because growing markets for domestic natural gas can generate economic growth at home by helping stimulate additional natural gas development, more than is needed to supply domestic demand; attract multi-billion-dollar U.S. investments in infrastructure – including pipelines, natural gas processing, LNG liquefaction, export facilities and shipping – and the high-quality jobs and wages that accompany these; and more.


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U.S. LNG Exports: Room to Grow

lng exports  liquefied natural gas  trade  economic growth  production 

Mark Green

Mark Green
Posted January 3, 2019

A new chapter in U.S. natural gas exports is unfolding before our very eyes – and with it, strengthened American energy influence abroad, increased trade and support for domestic natural gas production and jobs.

The U.S. Energy Information Administration (EIA) projects that 2019 will see U.S. liquefied natural gas (LNG) export capacity will reach nearly 9 billion cubic feet per day (Bcf/d) by year’s end, up from EIA’s 2018 estimate of 4.9 Bcf/d. The U.S. would rank third in the world behind Australia and Qatar. 

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U.S. Energy, Jobs Continue to Be Impacted By Trade War

trade  exports  oil and natural gas  jobs 

Kyle Isakower

Kyle Isakower
Posted January 2, 2019

Trade talks at the recent G-20 might have produced a ceasefire for one front in the trade war, but collateral damage continues to mount.

Before the holidays, retailers warned that the Trump administration’s tariff policies could raise prices on everything “from cribs to Christmas lights.” They were right. The Tariffs Hurt the Heartland coalition recently announced that Americans would pay more to light the tree this year. The vast majority of our holiday lights come from China, which means they were subject to a new 10 percent tariff this year – another casualty in the ongoing, multi-front trade war. …

Likewise, tariff and quota policies are hitting America’s natural gas and oil industry from multiple directions. We can’t operate without steel to drill wells that produce energy; operate refineries that turn it into gasoline and a variety of other essentials; and build pipelines, liquefied natural gas (LNG) export terminals and petrochemicals plants.


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America's New Energy Reality Shines in 2018

oil and natural gas production  us energy security  exports  shale energy 

Mark Green

Mark Green
Posted December 28, 2018

Thinking about the year in energy in 2018, a couple of recent news items focus attention on the sea change for our country launched by the U.S. natural gas and oil revolution.

These energy riches and the technical ability to harness them mean that increasingly, the U.S. is in control of its future. Energy security means a nation that isn’t constrained by energy concerns the way it was less than two decades ago.

As Americans looking ahead to 2019, let’s pause to consider the impacts of America’s new energy reality. We should be impressed and thankful for the opportunities that go with being the globe’s leading energy producer.

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Trade Policy Impacts on U.S. Energy Becoming Visible

crude oil exports  production  trade  monthly-stats-report 

Dean Foreman

Dean Foreman
Posted September 20, 2018

In API’s latest Industry Outlook and Monthly Statistical Report, we have shifted from recognizing risks on the horizon to having a line of sight on some of them.  The effects of trade disputes in particular have become tangible.

Most notably, at the same time as the U.S. celebrated another new record for crude oil production of 10.8 million barrels per day (mb/d), U.S. petroleum exports decreased by 1.3 mb/d over the past two months.  

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Record Oil Output, Yet Dip in Petroleum Exports Suggests Tariffs’ Effect

crude oil exports  oil production  trade 

Mark Green

Mark Green
Posted August 16, 2018

Lots of positive energy data points in API’s newest Monthly Statistical Report – and one that’s potentially concerning.

The good is that the U.S. tied its record for crude oil production in July at 10.7 million barrels per day (b/d) and set a new one for natural gas liquids, 4.4 million b/d. With total liquids production up by more than 2 million b/d compared to July 2017, the U.S. has accounted for almost all of the growth in world oil production so far in 2018 – more than compensating for production losses elsewhere around the world.

Now the potential point of concern. The U.S. petroleum trade balance retreated in July, perhaps the result – at least in part – of trade tensions prompted by new U.S. tariffs. Crude export were down 240,000 b/d last month, and refined products exports decreased 220,000 b/d.


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Don’t Let U.S. LNG Exports Become Casualty of Tariff Policy

trade  lng exports  liquefied natural gas  china 

Mark Green

Mark Green
Posted August 8, 2018

A couple of observations on China’s announcement late last week that it may impose a 25 percent tariff on U.S. shipments of liquefied natural gas (LNG) to that country – which would be in retaliation for announced U.S. tariffs on certain Chinese goods coming into this country.

First, China was the third-largest importer of U.S. LNG in 2017, accounting for nearly 15 percent of our LNG exports, according to the U.S. Energy Information Administration (EIA).  As those numbers indicate, this exchange of tariffs could leave a mark as far as U.S. energy exports are concerned. ...

If U.S. energy exports are restricted – at the same time trade policies have been adopted that increase the cost of the steel our industry uses – there’s a risk of significantly affecting a sector that has been a driving force for economic growth. It’s a big price to pay. 

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Tariffs and Signals From the Economy

trade  energy exports  economic growth 

Dean Foreman

Dean Foreman
Posted August 7, 2018

Recently, we discussed how natural gas and oil production and energy exports were major contributors to robust second-quarter growth by the U.S. economy – by themselves generating nearly half of the increase in U.S. real exports in Q2.

Yet, there’s concern that escalating U.S. trade restrictions and looming disputes could threaten global trade and economic growth. We’ve talked about tariffs and quotas directly impacting the natural gas and oil industry – China last week announced a 25 percent tariff on U.S. liquefied natural gas – but the potential effect is broader than just our industry, as indicated in last week’s post on possible food price impacts

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Energy Renaissance Continues to Help Grow Our Economy

economic growth  exports  trade 

Dean Foreman

Dean Foreman
Posted July 27, 2018

The U.S. gross domestic product (GDP) increased 4.1 percent in the second quarter at a seasonally-adjusted annualized rate, its best pace since 2014, driven by strong consumer and business spending as well as a surge in exports ahead of retaliatory tariffs from China. As the energy renaissance has continued to raise U.S. natural gas and oil production and exports to record levels, these abundant and affordable fuels and feedstocks contribute to the economy and — by themselves — generated nearly half of the growth in U.S. real exports in Q2.

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More Energy Impacts in U.S.-China Trade Standoff

trade  crude oil exports  china 

Mark Green

Mark Green
Posted June 20, 2018

Two charts pretty well capture the what’s at stake for U.S. energy – specifically exports of domestic crude oil – in an intensifying trade standoff between the United States and China.

According to U.S. Energy Information Administration figures, this is a very big deal. Big as in U.S. crude oil exports to China accounted for about one-fifth of all U.S. oil exports in 2017 – growing from basically nothing in 2013 to 81.6 million barrels last year.

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