Making Sense of the US Oil Story

We frequently see stories telling us how well the United States is doing at oil extraction. The fact that there are stories in the press about the US wanting to export crude oil adds to the hype. How much of these stories are really true? If we believe the stories, the US is now the largest producer of oil liquids in the world. In fact, it has been the largest producer since the fourth quarter of 2012.

Figure 1. US Total Liquids  production, including crude and condensate, natural gas plant liquids, "other liquids," and refinery expansion.

Figure 1. US Total Liquids production, including crude and condensate, natural gas plant liquids, “other liquids,” and refinery expansion.

Oil “Extenders”

One of the issues is that a few years ago, the US created a new oil-related grouping, combining valuable products with much less valuable (lower energy content, less dense) products. Using this new grouping, the US was able to show much improved growth in total “oil” supply. The US EIA now calls the grouping “Total Oil Supply.” I refer to it as “Total Liquids,” a name I find more descriptive. Besides “crude and condensate,” the mixture includes “other liquids,” “natural gas plant liquids,” and “refinery expansion.” Continue reading

The Myth that the US will Soon Become an Oil Exporter

Countries trade crude oil and oil products back and forth. When all of these transactions are netted out, is the US close to becoming a “net” oil exporter?

With the recent increase in oil production (perhaps even exceeding that of Russia on a “barrels-per-day” basis), a person might think that US oil production problems are behind us. If we look at the data, though, it is very clear that the US is still a long way from becoming a net oil exporter.

There are several reasons for confusion. One is the fact that excess refinery capacity can lead to the ability to export both gasoline and diesel, even though the United States continues to import large amounts of crude oil. Another is that tight oil (extracted through “fracking”) is growing from a small base, but can’t necessarily ramp up very far, very quickly. Another source of confusion is with respect to how different types of liquids should be combined for comparison purposes.

In this post, I would like to explain why the idea that the US is about to become a net oil exporter is simply a myth.  Continue reading