text.skipToContent text.skipToNavigation

US May Soon Be a Net Energy Exporter

For many years, the U.S. imported energy, but times have changed. The U.S. Energy Information Administration reported in April the U.S. has the means to balance its energy imports and exports for the first time since the 1950s and eventually become a net energy exporter. It’s already set to become an exporter of natural gas by 2017.

When Will the US Become a Net Energy Exporter?

While many are confident the shift from net importer to net exporter will occur, sources differ as to when. The shift greatly depends on oil and gas prices as well as global and national demand. According to the EIA, if oil prices remain low, the U.S. could be a net importer until 2040. However, if prices rise while national demand remains relatively steady, imports and exports could balance between 2020 and 2030.

Businesses within the oil, gas and energy industries should keep a close eye on key factors, including natural gas imports and exports, crude oil production and imports, oil prices, solar power, wind power and electricity demand. Changes in production costs, demand and prices in the coming years will affect these forecasts.

The Importance of the Change

This new prediction is a major accomplishment. The U.S. still relies on natural gas and crude oil imports despite recent increases in product but exports coal and petroleum products. Decreasing the importation of oil and gas to the U.S. allows the nation to gain energy independence, and the potential for exporting these products could boost private and public wealth.

Additional Energy-Related Predictions

The EIA predicts increased production of dry natural gas and natural gas plant liquids will cause manufacturing industries to expand. Additionally, with more crude oil and dry natural gas within the nation and needing to move between regions due to geographic disparities in production, there must be shifts in oil and gas flows that will require pipeline realignments and new infrastructure.

Numerous factors such as the rising cost of natural gas, coal and nuclear power and public policies will likely increase the public’s favorable opinion of renewable energy sources. Additionally, the decreasing costs of these methods coupled with the slowly growing demand for electricity may offer a boost to the renewable energy sector.

What’s Happening Now?

Imports and exports will change over time, but right now, the EIA anticipates Brent crude oil prices will not only average about $60 per barrel this year, but also increase to an average $67 per barrel in 2016. Crude oil production within the U.S. fell about 50,000 barrels per day in May compared to April, and production is expected to fall from now until early next year. Overall, the EIA anticipates crude oil production to hit around 9.5 million bpd this year.

While crude oil production has dropped, natural gas inventories in the U.S. rose to 2,577 billion cubic feet as of June 26, a 35 percent growth from a year ago. Inventory injections are good, but not as strong as they could be due to high temperatures and increased demand for electricity. However, injections are still expected to end the season above the five-year average.