Energy Market Update

U.S. Energy Information Administration Administrator Linda Capuano told the Energy and Water Development Appropriations Subcommittee in the U.S. House of Representatives in February that the U.S. energy industry is in a transformational time. She punctuated that statement by noting that, for the first time in almost 70 years, the U.S. will be exporting more energy than it imports by the end of 2020. In its Annual Energy Outlook 2019, EIA projects the U.S. will remain a net energy exporter through 2050. U.S. energy export growth is driven largely by petroleum exports, including crude oil and products, and by additional liquefied natural gas exports. In two years, America will export 1.2 million barrels of crude a day, more than will be coming into the country, according to EIA. Capuano said the trends have become clearly established and that they will continue for the next few years before slowing and stabilizing. The U.S. produced almost 11 million barrels per day of crude oil in 2018, exceeding the previous 1970 record of 9.6 million barrels per day. EIA expects that U.S. crude oil production will rise above 14 million barrels per day and remain there through 2040. “The United States has become the largest producer of crude oil in the world, and growth in domestic oil, natural gas, and renewable energy production is quickly establishing the U.S. as a strong global energy producer for the foreseeable future” said Capuano. While it is expected to become a net energy exporter, the U.S. will rely on heavy and medium crude oil imports, the report says. The U.S. will mostly produce light and sweet (low-sulfur) crude oils, but refineries along the Gulf Coast are geared for heavy, sour (high-sulfur) crude oil grades. EIA noted the impact of sustained low natural gas prices and declining costs of renewables on the electricity generation fuel mix. Natural gas will maintain its leading share of electricity generation and will continue to grow, increasing 5 p...