Though exports of petroleum products from the United States have increased by more than 10 percent since 2012, regional infrastructure issues mean the country still relies on imports for a significant amount of its energy needs.
A net gain in oil and natural gas production from U.S. shale deposits is seen by some policymakers as a reason to increase overall energy exports.
The U.S. Energy Information Administration (EIA) said exports of petroleum products like gasoline and other derivatives are already on the rise. The average 3.5 million barrels per day (bpd) worth of petroleum products exported in 2013 was more than 10 percent higher than the previous year. In December, exports reached 4.3 million bpd, the first time the level has ever passed the 4 million bpd mark for a single month.
Production, meanwhile, is gaining steam. In its short-termmarket report for April, EIA said it expects output from shale basins in the United States to push U.S. oil production above the 9 million bpd next year.
Erik Milito, director of upstream operations for the American Petroleum Institute, told the House Foreign Affairs Committee earlier this month that means the U.S. energy sector should release even more reserves onto the international market.
“It’s time to unlock the benefits of trade for U.S. consumers and further strengthen our position as a global energy superpower,” he said.
Legislation enacted in response to the Arab oil embargo in the 1970s restricts U.S. crude oil exports. A special permit is needed, meanwhile, to export the super-cooled form of natural gas needed to reach overseas countries that don’t have a free-trade agreement with the United States.
Milito and industry backers say U.S. energy trade policies are behind the times. Though production is on the rise, consumption trends, in line with economic recovery, suggests the United States is equal parts producer and consumer, however.
According to the EIA, despite the net increase in the export of petroleum products, infrastructure constraints mean that parts of the country — particular the East Coast — still rely heavily on imports of petroleum products like gasoline. EIA said imports of oil from Saudi Arabia in December, meanwhile, were 1.5 million bpd, a 47 percent increase year-on-year.
Though expedited permits for liquefied natural gas exports could open the door for more trade, it may take years before the infrastructure is in place for gas exports. And unless the price of West Texas Intermediate, the U.S. benchmark, collapses, Bank of America said the steps necessary for U.S. crude oil exports are at least five years away. While oil and natural gas production from the United States has increased, the data show the United States is still linked to the global market.
This piece is cross-posted from OilPrice.com with permission.