America Is Not Yet A Net Crude Oil Exporter

27

Of all the developments to come out of the shale oil boom in the U.S., the idea that the U.S. could actually achieve energy independence seemed one of the most unlikely.

After all, in late 2005 weekly net imports of crude oil and petroleum products had hit an all-time high above 14 million barrels per day (BPD). This was the result of years of growing U.S. demand and falling U.S. production. U.S. oil dependence had never been higher, and seemed destined to remain that way.

Net imports — which represent the difference between the crude oil and petroleum products the U.S. imports and those it exports — continued to bounce around the 13 million BPD mark through 2007.

Even as U.S. crude oil production turned higher, the idea that net imports could fall to zero seemed impossible.

Each year of the shale boom, U.S. net imports of finished products — primarily gasoline, diesel, and jet fuel — declined. From a net import level of about 3 million BPD in 2008, that number fell to zero in 2011. By 2016, the net import level of finished products that had been 3 million BPD in 2008 had turned into a net export level of 3 million BPD.

This was aided by a crude oil export ban dating back to 1975. U.S. crude oil producers had to sell their product to U.S. refiners, who were happy to refine discounted U.S. crude and then export the finished fuel products.

But then in late 2015, President Obama signed into law the Consolidated Appropriations Act. One of the provisions of this law was that it repealed the crude oil export ban. U.S. oil producers could now seek the highest price for their product instead of being limited to selling it within the U.S.

U.S. crude oil exports began to rise soon after, reaching the 3 million BPD mark earlier this year. A year ago, Bloomberg reported that the U.S. had become a net crude oil exporter for the first time in 75 years, but that was inaccurate. I addressed it in an article last December — No, The U.S. Is Not A Net Exporter Of Crude Oil.

The bottom line was that the number Bloomberg reported was actually the sum of crude oil exports and finished products. That number had indeed gone negative, meaning this net import category had become a net export number (at least for one week).

The weekly number dipped into negative territory again a couple of times this year, but in October, the monthly number was negative for the first time. Based on the current trends, the yearly number will change from net imports to net exports within the next two years.

But what is the situation now with respect to crude oil imports? A year ago, in response to the Bloomberg article, I reported that the U.S. was still a net crude oil importer to the tune of about 4 million BPD. A year later, that number has fallen to about 3 million BPD, and sometimes falls even lower.

For all of 2018, the U.S. was still a net importer of crude oil to the tune of 5.7 million BPD. That number had fallen by 1.5 million BPD over the previous two years. Final numbers for 2019 aren’t yet available, but the average for the year so far is 4.0 million BPD.

That’s a remarkable year-over-year decline, but the U.S. is still very much a net importer of crude oil. Even if the current trends continue (particularly the robust growth of shale oil production), it looks unlikely that crude oil imports could turn into exports before about the middle of the next decade.

Source:www.forbes.com/sites/rrapier/2019/12/01/us-still-not-a-net-crude-oil-exporter/#4a2530e025a8