American presidents from Jimmy Carter to George W. Bush have aspired to attain energy independence, and the U.S. economy under President Donald Trump just realized that goal by becoming a net exporter of crude oil.
It’s the first time the U.S. has achieved the status in roughly 75 years.
Energy golden age
By encouraging drilling and dismantling redundant regulations, the Trump administration has steered the energy sector to new heights. The last time the U.S. sold more petroleum than it bought was in the mid-1940s under Harry Truman, when America’s economy was industrialized for war and Europe was in ruins.
Statistics from the U.S. Energy Information Administration (EIA) show that American companies last week netted 211,000 barrels in daily sales of crude and refined products like gasoline and diesel. Figures from the rest of 2018 show that the U.S. typically experiences net imports of around 3 million barrels per day, down from an annual peak of 12 million barrels per day in 2005.
“The U.S. is now a major player in the export market,” said Brian Kessens, who helps manage $16 billion in energy investments at a Kansas-based firm. “We continue to re-tool our export infrastructure along the Gulf Coast to expand capacity, and you continue to see strong demand globally for crude oil.”
Booming sector
Exports should continue to grow, as at least nine terminals are in various stages of planning and construction that will be capable of loading the massive supertankers which carry American crude and refined products to markets around the world. Currently, Americans depend upon a single terminal, the Louisiana Offshore Oil Port, to load these ships, and it is expected to experience a record month in December.
New pipelines are being built to carry crude from the country’s fastest-growing oil field in west Texas and New Mexico. The U.S. Geological Service released a report on Thursday revealing that the Delaware Basin, the less-drilled portion of the expansive Permian oil field, contains twice the amount of crude and 18 times the amount of natural gas as the better known Midland Basin.
Much of the oil that the U.S. imports isn’t actually consumed by Americans, but is sent to refineries throughout the country which consume more than 17 million barrels a day. America’s advanced refinery infrastructure has helped turn the U.S. into the world’s top fuel supplier, and for the first time in 40 years, two new major oil refineries plan to further increase output by going online.
Despite these gains, some energy experts are quick to point out that the U.S. is still a regular net importer of oil and remains vulnerable to international market forces. A Bloomberg report exploring America’s new and perhaps temporary role as a net exporter called the landmark “a paper tiger achievement,” and noted that “the U.S. remains exposed to global energy prices, still affected by the old geopolitics of the Middle East.”
Sound policy
Still, the U.S. has reversed its position in the oil and natural gas industry in just a few short years. The shale revolution helped America outpace Russia and Saudi Arabia as the world’s top petroleum supplier, and the Trump administration’s oil-friendly climate has helped buttress and solidify those gains.
With promises to undo the restrictive, Obama-era Clean Power Plan, energy stocks experienced remarkable increases shortly after Trump was elected, and he continued dismantling standards in the oil and methane industries which have boosted production without completely compromising environmental protections.
Kathleen Sgamma, president of the Western Energy Alliance, called some of the rules which Trump pledged to undermine “cumbersome record-keeping technicalities that don’t work in the field.”
“We are becoming the dominant energy power in the world,” said Michael Lynch, president of Strategic Energy & Economic Research. “But, because the change is gradual over time, I don’t think it’s going to cause a huge revolution, but you do have to think that OPEC is going to have to take that into account when they think about cutting.”
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