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By the way, the U.S. has become the world's dominant energy superpower
In spite of government, not because of it, although Trump's policy changes are finally helping.
Quick quiz: Which nation is the world's leading producer of natural gas? No, not the Russians.
Which nation is the leading producer of oil and petroleum hydrocarbons? No, not the Saudis.
We complained a lot during the previous adminstration about Barack Obama's hostility toward traditional energy sources, and rightfully so. He did everything he could to thwart the U.S. energy industry in its move to rise up as the world's dominant energy power. And while Obama did slow down the effort, he wasn't able to prevent its ultimate success.
Per the Wall Street Journal, the U.S. today is near dominant in global energy markets, and one of the most positive developments is the resumption of U.S. energy exports:
Thanks largely to the domestic hydraulic fracturing revolution, the U.S. has been the world’s top natural gas producer since 2009, passing Russia, and the top producer of oil and petroleum hydrocarbons since 2014, passing Saudi Arabia. By now this is well known.
Less appreciated is the role that energy exports are now playing in sustaining U.S. production despite lower prices. Since Congress lifted the 40-year ban on U.S. crude oil exports in 2015, exports are rising in some weeks to more than one million barrels of oil per day. That’s double the pace of 2016 when government permission was required, according to a recent Journal analysis of U.S. Energy Information Administration (EIA) data.
The U.S. still imports about 25% of petroleum consumption on net, mostly from Canada and Mexico, but lifting the ban has resulted in a more efficient global supply chain. Most domestic refineries are configured to process heavy crudes, but fracking tends to produce light sweet crudes. Exporting the light and importing cheaper heavy oil results in lower prices for gasoline and other petro-products, and the larger world market has allowed U.S. drillers to revive production after prices fell from close to $90 a barrel in 2014.
Then there is the surge in liquefied natural gas (LNG) exports. Since the first LNG shipment from the lower 48 left a Louisiana port in 2016, the EIA expects exports will climb by about 200% over the next five years.
What is responsible for this progress? Well, producers are responding to a modest recovery in commodity prices after the price bust amid rising demand, and break-even costs for production continue to fall as technology and cost-management improve. But better policy decisions have also been crucial.
When we and many other conservatives were urging drill, baby, drill over the course of the past decade, one of the left's most perplexing objections was that there was no guarantee American consumers would be the ones to use all that oil. Some of it might be exported to other countries!
Well. Yeah. Certainly hope so. When U.S. industries can successfully import their goods overseas, that's good for everyone, but especially for the economy from which the goods originated. Foreign nations have made bank of the U.S. in recent years while we refused to fully exploit our own resources and, instead, paid them handsomely for access to theirs. When we're productive enough that we can export our energy resources and set the market for them, that brings capital from overseas back into the United States.
To call this good seems so obvious you feel like an idiot for needing to say so, but some people learn very slowly.
Even so, the U.S. position in global energy markets is not as strong as it could be, and the policy changes coming from the Trump Administration are an encouraging sign that things can get even better.
The Obama Administration was hostile to energy in a whole host of ways - from holding up oil leases on federal lands, to preventing the development of energy infrastructure, to bans on offshore drilling, to exercising heavy-handed regulatory control over gas exports, Obama made it as difficult as possible for the U.S. energy industry to build market share and make money. The Trump Administration is showing better instincts on all of the above, and has already taken concrete steps including the approval of the Keystone XL pipeline and the lifting of Obama's drilling bans in the Atlantic and Arctic oceans.
There's a lot more that can still be done, particularly in the Arctic National Wildlife Refuge, but the progress we've already made is remarkable. And the best thing about is that private-sector industry basically did it all on their own rather than sitting around waiting for politicians to do it. That is how good things usually happen. You wouldn't know it from listening to the government-obsessed media, but it's the truth.
Dan's new novel, BACKSTOP, is a story of spiritual warfare and baseball. Download it from Amazon here!