No, The U.S. Is Not A Net Exporter Of Crude Oil

This article today on Oil Price main news site could probably use a few more eyeball views.  Good distinctions made, which were glossed over by Bloomberg, and endlessly repeated on Mainstream Media.

No, The U.S. Is Not A Net Exporter Of Crude Oil

Last week Bloomberg created quite a stir with this story: The U.S. Just Became a Net Oil Exporter for the First Time in 75 Years. I have seen a number of follow-up stories that praised the significance of this development, but others laughed it off as misleading or incorrect.

There is some truth to both viewpoints. Yes, the headline is somewhat misleading and requires some context. But there continues to be a trend in the direction of energy independence for the U.S. So, today I want to break down the numbers so readers can understand the truth about U.S. petroleum production, consumption, and exports.

... Fact Check

So, here’s a summary of the important inputs to the balance that resulted in the Bloomberg claim:

• U.S. crude oil production – 11.7 million BPD
• Other supply (NGLs, ethanol, processing gain) – 6.9 million BPD
• U.S. crude oil imports – 7.2 million BPD
• U.S. crude oil exports – 3.2 million BPD
• U.S. finished product imports – 1.6 million BPD
• U.S. finished product exports – 5.8 million BPD
• U.S. petroleum consumption – 20.5 million BPD

... The U.S. is still a net importer of oil to the tune of 4.0 million BPD.

Further, total U.S. production of oil and other supply that is fed into refineries is 18.6 million BPD, while U.S. consumption is 20.5 million BPD. That still puts U.S. consumption at nearly 2.0 million BPD more than we produce. (It’s actually a little worse than that, because not all NGLs end up as refinery feedstock).

So the bottom line is that we aren’t net exporters of crude oil, and we aren’t energy independent. But, the U.S. has trended in that direction for over a decade. Regardless of whether it remains that way, this is undoubtedly a remarkable achievement. 

  • Upvote 1

Share this post


Link to post
Share on other sites

Can't argue with that logic..

Seems like I had read somewhere, Bloomberg perhaps, that for a day or so we were an exporter to the tune of 211,000 barrels total.

  • Like 1

Share this post


Link to post
Share on other sites

The BP Energy Outlooks and Shell Scenarios put the US as a Net exporter of crude oil somewhere near 2030, this basically due to the extraordinary growth of its production from the shale revolution. The Bloomberg article it is in fact misleading and obviously diverge with BP and Shell statistics analysis of the oil production and consumption of the years to come.

  • Like 2

Share this post


Link to post
Share on other sites

9 hours ago, mthebold said:

 

Even if we're not there today, we'll get there soon.  Does it really matter if independence happens in one year or two? 

I suppose it could affect the upcoming presidential election.  Trump declaring a historic level of energy independence in the middle of his campaign would be quite a show.  Overly dramatic theater, but a show nonetheless. 

Maybe we should invest in popcorn...

Ho, ho, ho!  Quite a show, indeed.  Think about what he and his administration just did at the "climate show" with their promotion of coal, etc.  Oil independence would fit right into his narrative, and go against everything the Democrats stand for.  Ho, ho, ho!  (sorry, just watched a Christmas movie :) )

Share this post


Link to post
Share on other sites

The latest EIA data (four week running average) show that US net crude oil imports were still running at about 5 million bpd--and it occurs to me that a critical question for the world economy in 2019 and 2020, and in later years, is how long US operators can continue to offset the huge rate of decline in existing tight/shale oil plays. 
 
Note that the EIA puts the legacy monthly volumetric decline from existing US tight/shale wells at about 0.5 million bpd per month for oil and at about 2.6 BCF/day per month for gas.  This is the volume of oil and gas that the EIA estimates that US operators need to put on line every month, just to maintain current tight/shale production levels:
 
 
The EIA estimate implies that US operators need to put on line--every three months--roughly the productive equivalent of the peak oil production rate of the Prudhoe Bay Field, just to offset declines from existing tight/shale oil wells. 
 
Regarding global supply, following is a chart I prepared several years ago, showing the extrapolated decline in the ratio of GNE (Global Net Exports of oil, total petroleum liquids, BP + EIA data) to CNI (Chindia's Net Imports of oil), based on data though 2011.  The extrapolation, based on the 9%/year rate of decline in the GNE/CNI Ratio from 2005 to 2011, showed the ratio falling to about 3.0 in 2017.   
 
The actual 2017 data show that the rate of decline in the GNE/ CNI Ratio slowed slightly (to 7.8%/year from 2005 to 2017, falling to 3.5 in 2017, from 5.2 in 2011 and 8.9 in 2005), but the key point is that globally we have continued to slide toward point that we cannot arrive at, to-wit, the Chindia region alone theoretically consuming 100% of GNE (when the GNE/CNI ratio theoretically hits 1.0). 
 
Expressed differently, the Chindia region consumed 11% of Global Net Exports of oil in 2005 and 29% in 2017, as the volume of GNE available to importers other than China & India fell from 40 million bpd in 2005 to 32 million bpd in 2017.    

 

GNE:CNI 2005 to 2011.gif

Share this post


Link to post
Share on other sites

Oil "stories" on this site go up and down from one story to the next, which suggests a very volatile situation. AFTER the OPEC meeting last week, production is supposed to decrease, as well, Alberta has a "government-suggested" plan to decrease oil sands production. Today (Friday, December 14) oil AND markets fell. The ridiculous "spat" of "arresting" a Chinese national has everything upside down as Trumpenomics "extortion negotiations" has nations, again, responding poorly to the insane abstraction of USA Empire "flexing muscle" as China inexorably grows. And so we "MUST" have war to placate the "owners of the world" who MUST be in control.    

Share this post


Link to post
Share on other sites