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Energy Tomorrow Blog

New Modeling Shows Impacts of Trade Policy Gone Awry

policy  trade  oil and natural gas 

Jessica  Lutz

Jessica Lutz
Posted February 20, 2019

Earlier this month we talked about the unforced error of the administration’s tariff and quota policies that hamstring the economy, detailing the findings of recent report from the nonpartisan Congressional Budget Office. Now, new modeling has reviewed those suspicions in the context of the energy trade, and the indications are clear: The escalating trade wars could significantly limit the U.S. energy revolution and the benefits to Americans that it would otherwise bring.

The recent report, part of BP’s annual “Outlook,” a macro-look at the global energy system over the next 30 years, models a number of different scenarios including one in which global trade disputes persist and worsen. The results of this “less globalization” scenario indicate that the continuation of these policies would slow global GDP growth by 6 percent and energy demand growth by 4 percent in 2040. To make matters worse, the effect could be intensified in countries and regions most exposed to foreign trade – like the U.S.

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Unintended Consequences in Alberta's Limits on Crude Output

alberta canada  crude oil  refiners  trade  production 

Dean Foreman

Dean Foreman
Posted February 19, 2019

A profound shift has taken place in North American oil markets over the past few months that’s now affecting trade between the United States and its biggest crude oil supplier, Canada.  

It involves supplies of heavier crude oil – important for the manufacture of a multitude of everyday products consumers use, from local road surfaces to the roofing for their houses. While the U.S. is producing domestic crude at record levels, there’s still a need for heavier crudes.

With heavy oil from Venezuela declining for years, the importance of close ties with Canada and especially the oil-producing province Alberta has increased. Unfortunately, Alberta’s decision to limit oil production appears to be advancing uneconomic outcomes, where some U.S. refiners signaled they’ll shift away from Canadian heavy crude oil and seek supply elsewhere. 


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The Unforced Error of Trade Policies That Impede the Economy

economic growth  gdp  trade  consumers  exports 

Mark Green

Mark Green
Posted February 8, 2019

The nonpartisan Congressional Budget Office’s new report, “The Budget and Economic Outlook: 2019 to 2029,” says what we’ve been saying for some time now – the administration’s tariff policies are a drag on the broader economy.

CBO projects that “the recent changes in trade policy in the United States and its trading-partner countries will reduce the level of U.S. real GDP by about 0.1 percent by 2022

Now, 0.1 percent might not sound like a lot over that time period, but potentially we’re talking about hundreds of billions of dollars subtracted from the economy. Dean Foreman, API chief economist, says it’s particularly concerning in the context of an economy that’s decelerating.


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Advancing the U.S. Energy Revolution

energy  oil and natural gas  infrastructure  trade  us energy security 

Mark Green

Mark Green
Posted January 24, 2019

On a day when the U.S. Energy Information Administration (EIA) published its new Annual Energy Outlook – forecasting that the U.S. will become a net energy exporter next year through 2050, growing natural gas share in fueling electricity and rising liquid natural gas exports – API President and CEO Mike Sommers talked about sustaining and growing the engine of all these trends and more: the U.S. energy revolution.

The reason is simple: Where U.S. energy is and where it could go hinge on extending that revolution – to support economic growth, increase U.S. security in the world and help advance environmental and climate goals.

Sommers’ remarks at the U.S. Energy Association’s State of the Energy Industry Forum outlined the key goals for the American energy sector.


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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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Texas and Continuing America's Energy Momentum

texas  us energy security  oil and natural gas  trade 

API CEO Mike Sommers

Mike Sommers
Posted October 24, 2018

From prepared remarks at this week at the Lone Star Energy Forum in Houston, hosted by the Texas Oil & Gas Association (TXOGA):

It’s great to be back in Texas. And it’s a privilege to share a stage with some of the most steadfast advocates for U.S. energy leadership starting right here in Texas. TXOGA and API have the same goal, and it’s based on this event’s theme: “Energy Dominance Starts in Texas.” The goal is to make sure that the Energy Dominance that starts in Texas, doesn’t end in Washington, D.C.


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U.S.-Canada-Mexico Agreement Supports U.S. Energy

trade  oil and natural gas  petroleum products  mexico  canada  us energy security 

Mark Green

Mark Green
Posted October 3, 2018

Announcement of the United States, Mexico and Canada Agreement (USMCA) – locking in Canada and Mexico as our nation’s closest trading partners – is good news for the U.S. energy renaissance. Attention now turns to Congress, which should ratify the deal....

Because zero or reduced tariffs, market access between the three countries and trade liberalization all worked to the benefit of U.S. energy under NAFTA, our industry’s chief goal was an updated agreement was to keep in place features that have supported U.S. energy. USMCA does that – and Americans will be the beneficiaries.


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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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