U.S. may not have long to go before becoming a net oil exporter
The United States could become a net exporter of petroleum in less than five years, the first time the country would achieve such a feat since at least 1949, according to a new report.
The shift from importer to exporter is driven by the surge in U.S. oil production that has followed the unlocking of crude reserves from shale formations, according to the report by the research firm IHS Markit. U.S. oil production grew to 9.4 million barrels a day in 2017, nearly double the 5.1 million barrels a day produced a decade earlier. Since then production has only accelerated: the Energy Department last week estimated that U.S. output has reached 11.7 million barrels a day.
Since a ban on crude oil exports was lifted at the end of 2015 oil exports have more than doubled from 465,000 barrels a day in 2015 to nearly 1.2 million barrels in 2017. Through August, oil exports have averaged 1.8 million barrels a day.
In making its forecast, IHS Markit included all petroleum products, including fuels, natural gas and petrochemicals. IHS Markit projects that as these exports increase, crude imports will decrease, turning the U.S. from a net importer to a net exporter by 2022.
The transformation could happen even sooner — perhaps by 2020, said Per Magnus Nysveen, an analyst with the research firm Rystad Energy. With crude from Canada, the largest source of U.S. oil imports, the U.S. could soon satisfy its thirst for oil solely from North American sources, Nyvseen said.
“Politically, of course, it is just a completely different situation that the U.S. doesn’t need the Middle East oil,” Nysveen said. “That is an extremely important implication.”
Texas has led the U.S. production boom, accounting for about 40 percent of the nation’s production.
Energy companies have invested billions in pipelines to move oil from the Permian Basin in West Texas, as well as other oil fields, to the Gulf Coast for export to foreign market.
On the coast, meanwhile, companies are also rushing to expand and built export facilities to handle some of the world’s largest oil tankers.
Enterprise Products Partners of Houston wants to build an offshore crude oil loading terminal 80 miles off the coast near Galveston, while Swiss commodities trader Trafigura wants to build one 15 miles offshore near Corpus Christi.
The Port of Corpus Christi is pursuing its own $1 billion onshore export terminal on Harbor Island, near Port Aransas, with support from Washington investment firm The Carlyle Group. Meanwhile, the Oklahoma pipeline company Magellan Midstream Partners said it is evaluating building its oil export terminal on Harbor Island.
Moda Midstream of Houston recently bought an oil loading terminal at Ingleside from the Houston oil company Occidental Petroleum. JupiterMLP, a Houston energy transportation company, has also said it wants to build a terminal by the Port of Brownsville, near the border with Mexico.
Growing U.S. shale oil and natural gas production lowered the trade deficit by an estimated $250 billion in 2017, according to the IHS Markit reports.
In 2017, the United States was a net exporter of natural gas, natural gas liquids such as propane and butane, and refined products, such as gasoline, according to IHS Markit. Crude imports declined from more than 10 million barrels a day in 2007 to 7 million barrels a day in 2017.
Expanding production in shale fields is driving U.S. gains on the world stage