Despite the ubiquitous, always-on media cycle, one of the most important news stories of the past half-century has been barely discussed: America’s stunning rise from energy dependence to its new role as a net exporter of that vital commodity.
As 2018 drew to a close, the United States exported more oil than it imported for the first time in seven decades. Investors.com headlined the concept appropriately: “Trump just achieved what every president since Nixon had promised: energy independence.”
Last September, The Energy Information Administration (EIA) noted “The United States likely surpassed Russia and Saudi Arabia to become the world’s largest crude oil producer earlier this year, based on preliminary estimates in EIA’s Short-Term Energy Outlook (STEO). In February, U.S. crude oil production exceeded that of Saudi Arabia for the first time in more than two decades. In June and August, the United States surpassed Russia in crude oil production for the first time since February 1999.”
In terms of global supply, U.S. oil production rose at the fastest pace in history. It was the largest one-year increase in oil production that the world has ever seen.
It’s not just oil.
On March 14, the EIA reported that U.S. natural gas production hit a new record high in 2018, growing by 10 billion cubic feet per day in 2018, an 11% increase from 2017. The growth was the largest annual increase in production on record, reaching a record high for the second consecutive year. U.S. natural gas production measured as gross withdrawals averaged 101.3 Bcf/d in 2018, the highest volume on record. U.S. natural gas production measured as marketed production and dry natural gas production also reached record highs at 89.6 Bcf/d and 83.4 Bcf/d, respectively.
2017 marked the first time in 60 years the U.S. exported more natural gas than it imported.
Energy independence was a key campaign theme for Donald Trump during his presidential campaign.
A Forbes review outlined what steps the Trump Administration took to bring about the change. They included: Auctioning off 77 million acres in the Gulf of Mexico for oil and gas drilling; Directing the Environmental Protection Agency to rescind the Clean Power Plan; Ordering the Treasury Department to “eliminate barriers to the financing of highly efficient overseas coal energy plants”; and, Approving the Keystone XL and Dakota Access pipelines.
Reuters noted that “President Donald Trump’s administration has sought to expand energy production on public lands, which stagnated during a multi-year surge in output on private lands, by rolling back federal environmental protections such as methane emissions curbs, expanding lease sales, and trimming royalty rates.”
The dramatic change has significant foreign policy implications. On March 12, an exuberant Secretary of State Michael R. Pompeo stated:
“Now, recent history should remind us all that we’re not just producing energy for Americans…In August of last year, the United States surpassed Russia as the world’s top producer. When it comes to global supply, U.S. oil production rose at the fastest pace in history, the largest one-year increase in oil production that the world has ever seen…I’m confident that the American system – leaving the commanding heights in the hands of private risk-takers – will allow that industry to continue to grow and export as well…
“Our plentiful oil supplies allow us to help our friends secure diversity for their energy resources. We don’t want our European allies hooked on Russian gas through the NordStream II project any more than we ourselves want to depend on Venezuela for our oil supplies.
“This need, this desperate need for diversification is why we exported more crude oil last year to countries all across the globe. Places as diverse as India, Japan, China, the Republic of Korea, Italy, Ireland, the United Arab Emirates. The list is long. It’s why, shortly before the United States made its first LNG shipment to Europe, it made it to a place that people don’t think about, the country of Portugal that now has access to American energy resources…
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“But truth is, here’s my point: We’re not just exporting American energy, we’re exporting our commercial value system to our friends and to our partners. The more we can spread the United States model of free enterprise, of the rule of law, of diversity and stability, of transparency and transactions, the more successful the United States will be and the more successful and secure the American people will be.
“Our model matters now, frankly, more than ever in an era of great power rivalry and competition where some nations are using their energy for malign ends, and not to promote prosperity in the way we do here in the West. They don’t have the values of freedom and liberty, of the rule of law that we do, and they’re using their energy to destroy ours.
“Take China, just for starters. China’s illegal island-building in international waterways isn’t simply a security matter.
“By blocking development in the South China Sea through coercive means, China prevents ASEAN members from accessing more than $2.5 trillion in recoverable energy reserves. To contrast, the United States Government promotes energy security for those Southeast Asian nations. We want countries in the region to have access to their own energy. We want to help them. We want to create partnerships. We want transparent transactions, not debt traps…
“And we all know the story in Russia. It invaded Ukraine to gain access to oil and gas reserves. It in turn deprived Ukraine of the possibility of developing those resources for itself and using its pipelines and its networks to bring energy to its own people. Rather, it uses those pipelines to put pressure – political pressure – on the people of Ukraine.
“The story isn’t too terribly different in Syria. Assad covets the oil fields to the east of the Euphrates River in the eastern part of the country. He wants those resources, he wants those wealth to continue to impoverish the people of Syria, and use those resources for himself and the cronies who are around him.
“Perhaps there’s no clearer example than in Iran. Iran uses its energy exports to exert undue influence all across the Middle East, most particularly today on Iraq. While the United States is working to develop an independent, sovereign Iraq, Iran is using its energy to create a vassal state. We have worked hard over the past months to reduce the flow of Iranian crude oil around the world, to convince the Iranian leadership to protect its citizens and deliver to its citizens what it is they’re asking for, and to reduce the risk of terror and instability throughout the Middle East.
“There could not be more of a contrast about how America uses its energy resources than how the leaders of the Islamic Republic of Iran use theirs.
“And finally, as we see in the headlines today, Cuba props up Venezuela’s Maduro regime. That’s because Venezuela ships 50,000-some-odd barrels of oil today at a subsidized price to Cuba, providing roughly 30 percent of its overall energy needs.”
Illustration: Energy Information Administration