Energy Tomorrow Blog
Posted December 12, 2019
In case you missed it, the U.S. Energy Information Administration (EIA) recently confirmed (see here and here) what API indicated in its Monthly Statistical Report (MSR) for September: For the first time since the 1950s, the United States is now a net exporter of energy in total.
Achieving this milestone is important for America. It embodies a slew of economic benefits, including lower energy prices – also those due to supply growth – rejuvenated investment in resource development, processing and transportation. It also has helped U.S. refining, petrochemicals and manufacturing, which have weathered the storm of U.S. trade restrictions and a strong U.S. dollar that made exporting U.S. goods more challenging.
Posted October 17, 2019
A major milestone for U.S. energy trade appears imminent. For the first time in more than 60 years, the U.S. may be a net exporter of total energy – based on API’s estimates in our latest Monthly Statistical Report (MSR).
The MSR shows that the U.S. petroleum trade balance decreased to net imports of just 818,000 barrels per day in September – and that at a time when domestic demand was at its highest level ever. With the U.S. Energy Information Administration (EIA) estimating that U.S. net exports of natural gas last month were 5.5 billion cubic feet per day (bcf/d) – more than 900,000 barrels per day in oil-equivalent energy – that would exceed U.S net imports of crude oil and refined products.
Posted October 2, 2019
When it comes to motor fuels, the prices we pay at the pump historically reflect crude oil prices – the No. 1 input cost according to the U.S. Energy Information Administration (EIA) – as well as the relative prices of other products, which collectively motivate refiners to manufacture different fuels.
We’ve seen through the energy revolution – and especially since 2015 – how lower prices for crude oil and natural gas (a key processing fuel and operating expense for refiners) have advantaged the U.S. petroleum refining industry – and ultimately led to lower fuel prices for consumers at home and abroad.
Posted September 19, 2019
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.
Each final month of the quarter marks the simultaneous release of API’s Monthly Statistical Report (MSR) and quarterly Industry Outlook, and this quarter has offered some remarkable milestones and insights – at a critical time for the world.
Posted September 16, 2019
An attack on a Saudi Arabian oil processing facility over the weekend has knocked out a significant part of Saudi production, at least temporarily, shaking oil markets. The precise amount and duration of the outage remains uncertain, and there are still unknowns about the attack that caused it, which in turn has inflated the risk premium on oil prices due to market fears about what may happen next within the region.
The market’s initial direction is clear, with Brent crude oil up more than $8 per barrel as of 3 p.m. Monday, per Bloomberg. Let’s break down what’s happened in context, recognizing that the U.S. energy revolution has fundamentally added to U.S. and global near-term deliverability of oil, natural gas and natural gas liquids, generally helping stabilize the global market against supply disruptions.
Posted September 9, 2019
One of the things I do often on behalf of API is to speak publicly across the United States, emphasizing how the energy revolution has continued to benefit consumers. On the topic of natural gas and electricity generation, a common thread has emerged: Natural gas has generally led to lower energy-related carbon dioxide emissions and lower electricity prices across the nation.
To those who follow the industry, this may be no surprise given that clean natural gas has supplanted coal as the leading energy source for generating electricity in the U.S. Part of this is natural gas’ competitiveness in the marketplace. Thanks in part to the shale revolution, real natural gas prices at Henry Hub decreased 37% between 2010 and 2018 – and as of August 2019 were down by another 15.6% y/y.
Posted August 28, 2019
U.S. exports of liquefied natural gas (LNG) – growing to a record 4.8 billion cubic feet per day (bcf/d) in the third quarter of 2019 – have been a catalyst for new natural gas resource development, U.S. pipeline and natural gas processing investments and the U.S. economy. ...
The U.S. Energy Information Administration (EIA) expects U.S. LNG exports to more than double again by 2025, which holds the potential for even greater domestic economic benefits, plus a central, emerging role for U.S. energy leadership in global markets.Realizing these benefits is critically dependent on the United States’ ability to build and deliver an unprecedented number of multi-billion-dollar U.S. mega-projects over the next several years. When ”demographics are destiny” and the average age of a welder in the U.S. already is over 57 years, we should remain optimistic about the potential to build these projects but also pragmatic about the policies and business environment needed to achieve the goals.
Posted July 18, 2019
Domestic oil production continues to benefit the U.S. – increasing energy security and driving economic growth – and cushion the economy as well as American consumers against global events that in the past impacted energy supplies, costs and prices.
Strength stemming from the U.S. energy revolution is seen in API’s latest Monthly Statistical Report (MSR), with U.S. crude oil exports setting a new record in June at 3.3 million barrels per day (mb/d), which represents growth of 1.1 mb/d over June 2018. Moreover, U.S. petroleum net imports fell to 1.3 mb/d in June from 2.9 mb/d in June 2018 – a major step closer to the U.S. becoming a net exporter of oil.
In other words, the U.S. has continued to supply virtually all of the world’s growing oil needs for transportation and industry, which has increased the stability of the global supply while generally lessening energy-related tensions.
Posted June 20, 2019
API’s latest Monthly Statistical Report (MSR) underscores just how much recent oil production growth exceeded the pace of record U.S. domestic needs and crude oil exports, resulting in higher inventories. This production and cushion for the market have kept oil and fuel prices low, and all these factors have contributed to a stronger economy with greater U.S. energy security.
Along with the separate Industry Outlook presentation, covering energy market developments for the second quarter of 2019, we see U.S. oil and natural gas output continuing to set records, helped by low breakeven prices and productivity that underpin the longevity of the domestic energy revolution –as we discussed here.
Posted June 12, 2019
The U.S. energy revolution continues to surge ahead – but you might not know it from some recent headlines: “The Shale Boom Is About To Go Bust” (Oil Price.com); “Oil Wells Aren’t Producing as Much as Forecast” (Wall Street Journal); “U.S. Oil Production Is Headed For A Quick Decline” (Oil Price.com)
Actually, domestic natural gas and oil production continues to expand. See API’s most recent Monthly Statistical Report. For some of the same reasons economists are so bad at predicting recessions, sometimes analysts may struggle to accurately project where U.S. energy is heading. After all, the shale revolution’s prospects have been underestimated since it launched.