Energy Tomorrow Blog
Posted March 31, 2014
A new study by ICF International makes the case for lifting trade restrictions that prevent the export of U.S. crude oil – consumer savings, job creation, domestic production growth and more:
- $5.8 billion in consumer savings a year, on average, between 2015 and 2035 due to falling costs of gasoline, heating oil and diesel fuel.
- Up to 300,000 additional jobs created in 2020, both due to higher oil production and U.S. consumers having more money to spend on goods and services.
- As much as a 500,000 barrels-per-day rise in domestic oil production in 2020.
- A $22 billion decrease in the U.S. trade deficit in 2020.
- Economic growth totaling as much as $38 billion in 2020, with an average GDP increase of up to $27 billion a year through 2035.
- An additional $15 billion to $17 billion invested in domestic exploration, development and production between 2015 and 2020.
- An increase of as much as $13.5 billion in federal, state and local government revenues in 2020.
Posted March 25, 2014
Because Lithuania has a front-row seat to the current Ukraine-Russia crisis, the appearance of the country’s energy minister at a Senate hearing on U.S. liquefied natural gas (LNG) exports was especially timely. Jaroslav Neverovič had a pretty simple message to the United States: We need U.S. natural gas.
Neverovič probably was the most anticipated of the witnesses at the Energy and Natural Resources Committee’s hearing, the first led by Sen. Mary Landrieu, the panel’s new chairman. Neverovič:
“At present, we are completely – 100 percent – dependent upon single supplier of natural gas and, as a result, are forced to pay a political price for this vital energy resource. Lithuanian families and businesses pay 30 percent more for natural gas than citizens in other European countries. This is not just unfair. This is abuse of monopolist position.”
The minister said while Lithuania is taking steps to achieve energy independence, it needs help.
Posted March 25, 2014
U.S. to Become Top LNG Exporter, Experts Say
Fuel Fix.com: HOUSTON — The U.S. is poised to become the top exporter of liquefied petroleum gas — more commonly known as propane or butane — within just a few years, officials with research analyst IHS said Monday.
By the 2020s, the U.S. likely will displace top LPG exporters including Qatar and the United Arab Emirates, said IHS Senior Director Walt Hart, during the IHS International LPG Seminar in Houston. The domestic supply of propane and butane is on the rise, produced along with the booming output of U.S. shale gas. But the domestic market for propane and butane is relatively flat, several experts said.
That’s not the case abroad. While most U.S. LPG exports go to Latin America today, a growing portion likely will go to Asia as demand there rises, in part due to its use as a fuel source for heating and cooking but also because of its role as a feedstock for the manufacture of petrochemicals.
Posted March 24, 2014
U.S. Energy Boom May Signal New Export Era
Los Angeles Times: In a Louisiana swamp several miles upriver from the Gulf of Mexico, about 3,000 construction workers are building a massive industrial facility to liquefy natural gas, preparing for a new era when the U.S. will begin exporting energy around the globe.
The $12-billion project is one of the largest single industrial investments in the nation, part of a massive transformation of the energy sector that has led to a boom in drilling, transportation and refining from coast to coast.
Five years ago, the idea of exporting U.S. gas and oil was not only unheard of, but, in the case of most U.S. crude oil, illegal. At that time, the United States was facing a future of dwindling domestic supplies and vulnerability to foreign producers. It was anxiously building facilities to import natural gas, worried about ever-higher prices and building much of its foreign policy on the need to secure energy supplies.
But U.S. energy production has boomed with the technological revolution of hydraulic fracturing, known as fracking, and the ability to tap newly accessible massive reserves. The nation surpassed Russia in 2009 as the largest producer of natural gas and is expected to zip past Saudi Arabia next year to become the largest oil producer in the world.
Now, the U.S. energy industry is pushing for a new era of exports.
Posted March 12, 2014
In a post last week we discussed the way the Ukrainian crisis is focusing a number of U.S. leaders on the potential foreign policy impacts of surging U.S. energy production. With its vast natural gas reserves, the U.S. could be a leader in the global market for liquefied natural gas (LNG), if we took the steps to make that happen – starting with government approval of permits to build LNG export terminals.
Unfortunately, that process is slow. Although the Energy Department has approved six applications since 2011, more than 20 still are pending. And the U.S. isn’t the only country eyeing the global LNG market. More than 60 non-U.S. LNG export projects are planned or under construction. In a number of ways, it’s a race to the rewards stemming from natural gas abundance.
Posted February 26, 2014
Surge in Fuel Exports Boosting U.S. Trade Balance
Fuel Fix Blog: HOUSTON — Growing production of U.S. oil and gas is helping to improve the nation’s trade balance, according to a federal report Monday.
Dramatic growth in the export of refined petroleum products, such as jet fuel and gasoline, has led the way. The value of net refined exports increased 55 percent in 2013 over the prior year, reaching $33 billion, according to the U.S. Energy Information Administration.
U.S. refiners are finding cheaper domestic alternatives to overseas oil, causing a rally in the ratio of refined fuel exports to imports. Overall energy export values increased 8 percent in 2013 over the prior year. Total energy imports to the U.S. fell by 11 percent for the same time period.
Posted February 24, 2014
Energy Trade is a Key Part of Overall U.S. Trade Flows
EIA Energy Today: Energy trade has long been a key component of overall U.S. trade flows. Recent developments in U.S. energy production, notably the rapid growth of tight oil and shale gas output, are leading to significant changes in the nation's energy trade flows. Another important factor is consumption trends, which reflect both increased efficiency of vehicles and other energy-using equipment, and structural changes in the economy. This article, which focuses on current energy trade in the context of overall trade flows, will be followed by several others in the coming days that consider the evolution of trade flows in major energy fuel categories since 2002.
As shown in the figure above, overall U.S. trade includes both goods and services but is dominated by goods. In 2013, as in other recent years, the United States was a net importer of goods and a net exporter of services. Energy accounted for 15% of gross U.S. goods imports in 2013, while energy exports, which have grown significantly in recent years, accounted for 7% of overall U.S. goods exports. Focusing on the net U.S. trade position, shown by the black line in the chart above, net energy imports account for nearly half of the total U.S. trade deficit in goods and services.
Posted February 7, 2014
Big news from the Commerce Department this week is that U.S. exports rose to a new high in 2013 and imports dropped to their lowest level since 2009 for the smallest U.S. trade deficit since 2009 – thanks largely to reduced oil imports due to growing domestic production and record exports of products made from petroleum. The Wall Street Journal (subscription required) reports:
A booming domestic energy industry is largely responsible for the turnaround. Not adjusted for inflation, the value of petroleum exports—a category that includes gasoline, kerosene, lubricants, solvents and other products—reached a full-year peak in 2013. Petroleum imports, by value, were the lowest since 2010 and the volume of crude-oil imports, at 2.8 billion barrels, were the lowest since 1995.
Bloomberg reports the U.S. trade gap narrowed to $471.5 billion last year from $534.7 billion in 2012, with the trade balance on petroleum products shrinking to 20.2 percent, the biggest decline in four years.
Posted February 6, 2014
Trade Gap Shrank in 2013 as U.S. Fuel Exports Climbed
Bloomberg News: The U.S. trade deficit in 2013 was the smallest since 2009, even as it ticked up at year’s end, as rising fuel exports and falling imports propelled the world’s biggest economy further toward energy independence.
The gap narrowed to $471.5 billion last year, the lowest since 2009, from $534.7 billion in 2012, figures from the Commerce Department showed today in Washington. The balance on petroleum products shrank 20.2 percent, also the biggest decline in four years.
Foreign sales went beyond fuel as demand for American-produced foods, capital equipment, autos and consumer goods all climbed to records in 2013, evidence of the rebound in global demand that will probably keep driving exports this year. Another report showing claims for jobless benefits dropped last week points to a healing in the U.S. labor market that will help boost consumer spending, ensuring imports also grow.
“The trade deficit will continue to narrow a bit over the course of 2014, mostly thanks to a smaller petroleum trade deficit,” said Ryan Wang, an economist at HSBC Securities USA Inc. in New York and the second-best trade forecaster over the past two years, according to data compiled by Bloomberg. “We’ll see another year of moderate growth.”
Read more: http://bloom.bg/1lDQLmp
Posted January 23, 2014
The U.S. energy revolution continues to reshape America’s energy outlook for the better. Thanks largely to shale energy reserves and advanced hydraulic fracturing and horizontal drilling, the U.S. Energy Information Administration’s 2014 Annual Energy Outlook estimates domestic oil production will approach 9.6 million barrels per day by 2016 – a level of output not seen since 1970. EIA also projects that U.S. liquid fuels net imports as a share of consumption will decline to about 25 percent in 2016, down from a high of 60 percent in 2005. Both are great pieces of news.