mead cohen berger shevtsova garfinkle michta grygiel blankenhorn
Hail Shale
America the Energy Exporter

The U.S. looks set to increase its petroleum product exports while reducing its net crude imports in the coming years. That’s according to Energy Information Administration, which recently released an Annual Energy Outlook:

Together, lower crude oil imports and higher product exports reduce net imports of petroleum and other liquids, which in 2013 provided 33% of total U.S. consumption (product supplied). In the AEO2015 Reference case, this percentage falls to 14% in 2020, when domestic crude oil production reaches 10.6 million barrels per day. Domestic crude oil production then begins to decline, and the net import share of product supplied increases to 17% by 2040.

It’s no secret what’s behind these trends, either. Hydraulic fracturing and horizontal well drilling have unlocked massive new reserves of oil and gas, and in so doing have remade the American energy landscape. Moreover, our energy trade balance is a huge part of our energy security. The less we import, the less we rely on sources of supply beyond our control. That gives us more policy options even as it strengthens our global economic standing—all good things by any measure.

But while fracking deserves credit for its contributions to America’s trade balance, it’s worth remembering that that energy security isn’t energy independence. The former is achievable, while the latter just isn’t in the cards in today’s global crude market. Even with the rosiest projections we’ll still be importing millions of barrels of crude per day for the foreseeable future. And if by some other technological breakthrough we were able to produce enough crude to preclude the need for imports, we would still be subject to the vagaries of the international market. Producers can ship barrels worldwide, and will look for the best price they can find.

This flood of American oil is helping iron out supply shocks by giving the market a stable new source, and that’s a boon to both U.S. and global energy security. It isn’t, however, fully insulating us from events affecting the oil market.

Features Icon
Features
show comments
  • Jacksonian_Libertarian

    “But while fracking deserves credit for its contributions to America’s trade balance, it’s worth remembering that that energy security isn’t energy independence. The former is achievable, while the latter just isn’t in the cards in today’s global crude market.”

    This is false, the US could become a net exporter of petroleum. And getting predictions from the EIA is foolish, as these incompetents have repeatedly failed to predict American production even in as short a time frame as next year, to give any credit to what they predict for 2040 is ludicrous.

    • JR

      It’s hard to make predictions, especially about the future.

      • Tony

        Much harder than predictions about the past 😛

    • fastrackn1

      …for anybody to predict anything in 2040 is ludicrous….

  • Fat_Man

    There is a further caution necessary. Imports from Canada and Mexico do carry the same foreign policy risks that imports from the Middle East carry.

    • Kevin

      Really? Now if only there were a pipeline that ensured Canadian exports would go to the U.S….

      • fastrackn1

        I think there will be after January 20th 2017…..

© The American Interest LLC 2005-2016 About Us Masthead Submissions Advertise Customer Service