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Energy Tomorrow Blog

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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Why the U.S. Must Import and Export Oil

crude oil exports  refineries  gasoline prices  energy policy 

Dean Foreman

Dean Foreman
Posted June 14, 2018

With Wall Street Journal headlines such as “Trans-Atlantic Oil-Price Spread Soars as Supply Glut Disappears,” it might be hard to remember that the United States’ domestic oil production stood at a record 10.5 million barrels per day (mb/d) in April, and the nation’s petroleum trade balance is in its best position in 50 years. This has reinforced U.S. energy security, lowered the trade deficit and boosted economic growth.

That said, given our country’s much improved energy outlook, some may question why we’re still importing crude oil and refined products. And, while we’re still importing oil, why do we export domestic crude – especially when prices have risen at the pump?  Why don’t we just keep American oil at home? ... 

Answers are found in an understanding of basic market realities.

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New Study, Familiar Result: LNG Exports Benefit U.S.

lng exports  natural gas benefits  economic growth  trade 

Mark Green

Mark Green
Posted June 13, 2018

The U.S. Energy Department’s latest study on the economic impacts of exporting liquefied natural gas (LNG) reaches a by-now familiar top-line conclusion: Exporting U.S. LNG is good for the economy, and those benefits will outweigh domestic cost impacts.

We say familiar, because this is the fifth DOE study on LNG exports – and the fifth to describe broad, positive economic impacts for the United States from shipping natural gas to friends and allies overseas – which should end claims that LNG exports could harm American consumers.

Certainly, no one can say the issue hasn’t been thoroughly analyzed – not after five government studies and two commissioned by our industry (see here and here).

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The Growing Momentum of U.S. LNG Exports

natural gas  lng exports  us energy security  emission reductions 

Mark Green

Mark Green
Posted March 27, 2018

The U.S. Energy Information Administration reports that the U.S. has become a net natural gas exporter for the first time since 1957 and that exports of liquefied natural gas (LNG) quadrupled in 2017 over 2016. Here's why these developments are important for the United States.

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U.S. Innovations Shift Global LNG Market

liquefied natural gas  lng exports  innovation  trade 

Dean Foreman

Dean Foreman
Posted March 12, 2018

Low U.S. natural gas prices have spurred liquefied natural gas (LNG) exports and major petrochemical projects that have become a springboard for U.S. jobs, wages, housing, education and services – everything that comes with major new capital projects and their broad-based boost to the economy. An important corollary is that U.S. technological innovation is translating into innovative business practices that are helping to increase the global trade, volumes and liquidity of natural gas markets while also advancing environmental goals by reducing greenhouse gas emissions in the power sector. 

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