U.S. Oil and Natural Gas Exports Projected to Soar in 2018

Facilitated by technological advances in the development process, more American oil and natural gas is being produced than ever before. With this wealth of natural resources, 2018 promises to be the year when the United States further transitions to the next level within global market: becoming a leading oil and natural exporter.

Crude Oil and Petroleum Exports

With the introduction of techniques such as hydraulic fracturing and horizontal drilling, the United States has experienced significant growth in domestic oil production over the past decade.  According to the latest data from the U.S. Energy Information Administration (EIA) the United States is producing crude oil at monthly levels not seen since the 1970s – roughly 9.7 million barrels per day (b/d) – with the agency projecting that annual U.S. production will reach a record high this year. Much of this growth in production derives from shale development, with over 6.4 million b/d of oil production projected to come from shale development in January 2018.

More impressive still, one region, the Permian Basin located in West Texas and Southeastern New Mexico, has driven a significant portion of this production. According to EIA, the Permian is expected to produce nearly 2.8 million b/d in January 2018, which is more than twice the production of the next most prolific shale region and an increase of nearly 700,000 b/d in just a single year. This growth has helped bolster Texas’ position as the country’s largest oil producing state, as well as elevated New Mexico to the distinction of being the third largest oil producing state ahead of even California and Alaska. Further, U.S. production is expected to increase over the next year, with production from the Permian alone projected to grow roughly 515,000 b/d by December 2018.

Thanks to this abundance of oil production from shale development, U.S. crude exports have soared in the two years since Congress lifted the 40-year-old crude export ban in December 2015. Since lifting the ban, U.S. crude oil exports have grown by roughly 1.3 million b/d (as of October 2017), while imports of crude oil have dropped by nearly 23 percent since 2005.

Along with crude oil exports, exports of petroleum products such as gasoline, heating oil, diesel and propane have continued to rise over the past several years. As the largest producer of petroleum products in the world since 2013, the United States exported an average of over 5 million b/d in the last week of 2017, up over 3 million b/d since the last week of 2009. All told, net imports of petroleum products to the United States has declined from about 2 million b/d in 2008 to -2.88 million b/d in 2017, as the U.S. flipped from net importer to net exporter in less than a decade.

Natural Gas Pipeline and LNG Exports

Much like crude oil exports, exports of natural gas have been spurred on by the significant increase in shale development over the past decade. Between 2006 and 2016, U.S. marketed natural gas production grew by roughly 47 percent, from 19.4 trillion cubic feet (Tcf) in 2006 to nearly 28.5 Tcf in 2016. Further, shale natural gas production has also increased substantially in only the past couple of years. According to EIA data, natural gas production from shale development jumped from just under 37 billion cubic feet per day (Bcf/d) in January 2014 to over an estimated 63 Bcf/d in January 2018 – an increase of about 70 percent.

Following this increase in domestic production, exports of U.S. natural gas have grown rapidly, with much of the attention focused on the growth in liquefied natural gas (LNG) exports. Allowing American natural gas to reach trading partners around the world, the United States has gone from almost solely importing LNG to exporting roughly 2.7 Bcf/d in the less than two years since opening the country’s first LNG export terminal in Sabine Pass, La. Additionally, when factoring in the current LNG export projects and additions under construction, U.S. LNG export capacity is predicted to quadruple in the next two years, reaching an estimated 9.6 Bcf/d by the end of 2019.

Aside from LNG, the majority of U.S. natural gas export growth stems from exports via pipeline. According to the EIA, American natural gas pipeline exports were just over 663 Bcf in 2006, but by 2016 U.S. natural gas pipeline exports more than tripled to 2.15 Tcf. Over the same period, imports of natural gas declined by almost 1.2 Tcf, from about 4.19 Tcf in 2006 to just over 3 Tcf in 2016. In fact, natural gas exports have grown so quickly in conjunction with the drop in natural gas import that, for the first time in 59 years, the United States became a net exporter of natural gas.

In addition to strengthening the United States’ position as a major player in the global market, the growth U.S. oil and natural gas exports is also expected to generate billions of dollars in investment. For example, at the Port of Corpus Christ – which was exporting about $1.5 billion in crude oil per month as of August 2017 – an estimated $50 billion will be spent on port projects that include an LNG export terminal, port expansion and pipeline infrastructure to deliver oil and natural gas from the Eagle Ford shale. Overall, a recent report from the American Petroleum Institute estimates that U.S. natural gas exports will add up to $73 billion to the U.S. economy by 2040, as well as up to 450,000 jobs.

Looking Forward

Over the next year, the U.S. is positioned to continue its ascent as a global oil and gas producing superpower. According to research firm Rystad Energy, U.S. crude production could increase by 10 percent in 2018 to an astonishing 11 million b/d. Such a substantial increase would move the United States ahead of producers such as Saudi Arabia and Russia, making the U.S. the largest crude oil producer on the planet.

For natural gas exports, the estimated 7 Bcf/d increase in capacity by 2019 would place the United States in the top three LNG producers in the world, behind Qatar and Austria. Further, the International Energy Agency (IEA) estimated last year that by 2022, the U.S. would overtake Australia as the second largest LNG exporter in the world. In fact, the United States is competing established LNG exporters, as 2017 saw the first American shipments of LNG reach countries like Poland, Lithuania, and Taiwan, as well as efforts to increase shipments to major consumers like China.


As we enter begin a new year, it’s difficult to predict what 2018 will bring, but one thing seems to be certain: this is the year that U.S. oil and natural gas exports get to shine.

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