U.S. on Track to Become Net Exporter of Petroleum Products in 2011
Though the United States is still the world's largest importer of crude oil, bringing in nine million barrels of crude every day, the country is on track this year to become a net exporter of petroleum products (like gasoline, diesel, and other fuels) for the first time since 1949. The Wall Street Journal reports:
A combination of booming demand from emerging markets and faltering domestic activity means the U.S. is exporting more fuel than it imports, upending the historical norm.
According to data released by the U.S. Energy Information Administration on Tuesday, the U.S. sent abroad 753.4 million barrels of everything from gasoline to jet fuel in the first nine months of this year, while it imported 689.4 million barrels.
Major consumers of U.S. petroleum products include the developing countries of Latin America–Mexico, Brazil, Argentina, Peru–as well as the Netherlands and Singapore.
The news is bittersweet–as the U.S. becomes a net exporter, it will command more influence in global energy markets; at the same time, the U.S. only remains a net exporter so long as the domestic economy languishes.
Corpus Cristi Oil Refinery Photo Credit: Mark Karrass/Corbis
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May '10
Re: U.S. on Track to Become Net Exporter of Petroleum Products in 2011
And to think that we do it with both hands -- exploration/drilling, new refining capacity -- tied behind our backs. thanks, Barry.
Re: U.S. on Track to Become Net Exporter of Petroleum Products in 2011
"Thanks Barry" is what he will be looking for. If he is smart he will use this as a double feather in his cap on foreign affairs and economy.
Re: U.S. on Track to Become Net Exporter of Petroleum Products in 2011
Tommy De Seno
"Thanks Barry" is what he will be looking for. If he is smart he will use this as a double feather in his cap on foreign affairs and economy. · Nov 30 at 11:25am
Oh gosh, you're exactly right!
Along these lines, note that today's stock prices are soaring as a result of the Fed giving discounted interest rate loans to bail out Europe. As a deep cynic, I can see Obama taking future steps to undercut the dollar so that stock prices are artificially high just in time for elections next year.
Aug '11
Re: U.S. on Track to Become Net Exporter of Petroleum Products in 2011
So is the deal that we'll be net exporter because our demand has decreased (rather than our production having increased?)
Dec '10
Re: U.S. on Track to Become Net Exporter of Petroleum Products in 2011
If we're importing raw material (crude oil) and exporting finished products (gasoline, jet fuel, etc.) does this help or hurt our economy? I think it is good for the trade balance numbers, but don't we say our imbalance with China is ok because it's the opposite scenario?
Jul '11
Re: U.S. on Track to Become Net Exporter of Petroleum Products in 2011
That is exactly right. Refining capacity in the US has stagnated in the last couple of years, while demand has been dropping since about 2007.
-E
Re: U.S. on Track to Become Net Exporter of Petroleum Products in 2011
It's both.
The WSJ report indicates that our production has increased quite a bit due to new sources of oil coming from North Dakota and Texas, in addition to more efficient refineries relative to those in Europe. But our demand has also disproportionately decreased on account of the sagging economy.
Jul '11
Re: U.S. on Track to Become Net Exporter of Petroleum Products in 2011
I've always been of the opinion that economic activity in general is helpful, regardless of the type of economic activity is supplying raw material or manufacturing. The more important question is how can we take a larger share of both the crude and refined products market.
-E
Apr '11
Re: U.S. on Track to Become Net Exporter of Petroleum Products in 2011
First off, I want to say that I think the idea of "energy independence" is a dumb protectionist slogan that has captured about 95% of the population and a higher proportion of politicians. In that vain, I'm not sure whether to laugh or take heart that some (like Michelle Bachmann) have referred to the XL pipeline, which would provide Canadian oil, as an aid to energy independence.
What I believe in, with energy or any other product, is efficiency. So to The King Prawn's question, I believe both sides can be okay. The US obviously puts up to many regulatory barriers to energy production, both raw and processed, but even without that the oil we would drill would not be cheap. So we should be expecting to import cheaper crude. But processing the oil takes a lot of capital, which we have. Thus, it is efficient for the US to import raw crude and export processed energy products.
In other areas it is the opposite. For example, the US is still a strong cotton grower. But manufacturing apparel is usually labor intensive. Asia has a lot of cheap labor. So exporting cotton and importing clothes is also efficient.
Jul '11
Re: U.S. on Track to Become Net Exporter of Petroleum Products in 2011
Diane Ellis, Ed.
It's both.
The WSJ report indicates that our production has increased quite a bit due to new sources of oil coming from North Dakota and Texas, in addition to more efficient refineries relative to those in Europe. But our demand has also disproportionately decreased on account of the sagging economy. · Nov 30 at 12:17pm
Be careful not to confuse crude production with refining. Even though they are closely associate, they are 2 very different industries with very distinct market drivers.
The new sources of crude oil are a positive development, but they don't directly impact domestic refining markets because they are displacing the foreign crudes that are currently supplying US refiners. Overall, US refining capacity or output has not changed since mid-2009.
-E
Aug '10
Re: U.S. on Track to Become Net Exporter of Petroleum Products in 2011
Ssssssshhhhhhhhh !!
You them to find out and ruin everything ?
You want this woman on your doorstep ?
May '10
Re: U.S. on Track to Become Net Exporter of Petroleum Products in 2011
The largest buyers of US petroleum products are also the largest suppliers of our crude, Canada and Mexico. Net exports of anything are always a good thing, and the value added by our refining the crude we obtain from those to nations is certainly a plus.
Our refining capacity is growing by virtue of expansion of several refineries, nost notable being Motiva in Port Arthur, Texas which is expanding from 285 million BBD to 600 million BBD. It is half owned by Saudi Arabia, and will refine ONLY Saudi provided crude oil, 27 tankers a month will dock at the facility, which I find simply astounding.
Interesting that now we not only get Saudi crude, but they are owners of a major refinery, and will benefit from the export of refined product.
Re: U.S. on Track to Become Net Exporter of Petroleum Products in 2011
CandE
Be careful not to confuse crude production with refining. Even though they are closely associate, they are 2 very different industries with very distinct market drivers.
I don't think anyone's confusing crude with the petroleum products that result from refining. But they are very closely related. Again from the Journal:
Jul '11
Re: U.S. on Track to Become Net Exporter of Petroleum Products in 2011
Diane Ellis, Ed.
CandE
Be careful not to confuse crude production with refining. Even though they are closely associate, they are 2 very different industries with very distinct market drivers.
I don't think anyone's confusing crude with the petroleum products that result from refining. But they are very closely related. Again from the Journal:
Nov 30 at 12:54pm
Based on what you've quoted, it looks like the WSJ article is conflating the two.
-E
Feb '11
Re: U.S. on Track to Become Net Exporter of Petroleum Products in 2011
Maybe so, but that has never actually mattered as the US has never actually taken any measures to become energy independent. I'd say the measures taken have actually gone the other way. For example no drilling in ANWR, no new drilling in the Gulf, and endless legal challenges intended to stop any sort of resource exploitation in this country at all. The new production from fracking, etc, has come about merely because the government wasn't able to stop it.
But they're working on it, no doubt.
Aug '11
Re: U.S. on Track to Become Net Exporter of Petroleum Products in 2011
But wouldn't it be awesome if it was just that we were out-producing everyone? I mean, we have the technological capability and the untapped resources . . . and the stupid government won't let us.
Aug '10
Re: U.S. on Track to Become Net Exporter of Petroleum Products in 2011
Indeed, there has been an uptick in operating distillation capacity in 2011. Note this is distinct from the operable capacity cited by CandE.
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MOCGGUS2&f=M
Note, also, that atmospheric crude oil distillation capacity only tells part of the story. The other part is vacuum distillation/thermal cracking capacity. This is where we really excel. Deep conversion of heavy/sour crude oil into fuels through coking, for instance, is more profitable than simple distillation, because the feedstock is cheaper, yielding higher margins.
I don't think the WSJ article was conflating upstream and downstream production, but it's true that domestic production of crude oil is only partially relevant to the question at hand. Greater production of domestic crude does not necessarily translate into greater refined products production (unless refining has been constrained by unavailability of crude). Crude oil can be easily sourced through domestic or international channels. The real drivers are domestic refining capacity and domestic and international demand for refined products.
Edited on Nov 30, 2011 at 3:25pmFeb '11
Re: U.S. on Track to Become Net Exporter of Petroleum Products in 2011
And the elephant in the room nobody will talk?
Increased licensing and building of nuclear power plants.
It is wrong to use coal or natural gas to produce electricity when there is an clean alternative.
Of course, Buffet does own that coal hauling railroad. But Obama surely is not protecting that man's source of income? Or is he?
Re: U.S. on Track to Become Net Exporter of Petroleum Products in 2011
StevenK85: First off, I want to say that I think the idea of "energy independence" is a dumb protectionist slogan that has captured about 95% of the population and a higher proportion of politicians. In that vain, I'm not sure whether to laugh or take heart that some (like Michelle Bachmann) have referred to the XL pipeline, which would provide Canadian oil, as an aid to energy independence.
What I believe in, with energy or any other product, is efficiency. · Nov 30 at 12:23pm
Energy independence can be regarded as "a dumb protectionist slogan" only if one focuses solely on economic efficiency and ignores geopolitical consequences. It would, I think, be nice if developments in the Middle East were less momentous for us.
Dec '10
Re: U.S. on Track to Become Net Exporter of Petroleum Products in 2011
Paul A. Rahe
StevenK85: First off, I want to say that I think the idea of "energy independence" is a dumb protectionist slogan that has captured about 95% of the population and a higher proportion of politicians. In that vain, I'm not sure whether to laugh or take heart that some (like Michelle Bachmann) have referred to the XL pipeline, which would provide Canadian oil, as an aid to energy independence.
What I believe in, with energy or any other product, is efficiency. · Nov 30 at 12:23pm
Energy independence can be regarded as "a dumb protectionist slogan" only if one focuses solely on economic efficiency and ignores geopolitical consequences. It would, I think, be nice if developments in the Middle East were less momentous for us. · Nov 30 at 3:35pm
I prefer the term energy security to energy independence.