Year in Review: 2017 Was a Stellar Year for Oil and Gas

With the new year fast approaching, millions of Americans are turning to oil and natural gas to make their holiday festivities possible. From the natural gas heating our homes, to the fuel in cars and planes helping us reach family and friends across the country, to numerous petroleum-based gifts we’ll be exchanging this Christmas, oil and natural gas play an integral part of our holidays whether we realize it or not.

To celebrate everything oil and gas provides this time of year, let’s look back and appreciate some remarkable shale-related trends that have occurred in 2017.

Soaring Production

Despite activists best (and strangest) efforts, American oil and natural gas production soared in 2017. Already the world’s largest oil and natural gas producer since 2012, U.S. oil production grew by over 650,000 barrels per day (b/d) between January and September of this year. Even more impressive, U.S. oil production is projected to keep growing into 2018, with the U.S. Energy Information Administration estimating an additional 94,000 b/d increase in January of next year. Still not enough? The agency forecasts U.S. crude output will reach over 10 million b/d – a new record – thanks to a nearly 1.2 million b/d increase in oil production from shale development alone in 2017.

Through shale development, U.S. natural gas production has grown as well. Between January and December of this year, U.S. shale gas output grew from about 47.6 billion cubic feet per day (Bcf/d) to over 62.2 Bcf/d – a near 31 percent increase. Natural gas output from shale is projected to grow even further, with EIA estimating an increase of 764 million cubic feet per day (Mcf/d) from December 2017 to January 2018, with almost half of that production stemming from the Appalachia region alone.

Declining Emissions

Considering the incredible oil and natural gas production growth seen this year, the strides oil and gas producers are making on mitigating emissions levels are that much more impressive. A new report from Energy in Depth found methane emissions across eight of the country’s largest oil and gas producing regions have declined by over 10.8 million metric tons (MMT) of CO2 equivalent from 2011 to 2016. In some of the most prolific shale basins, such as West Texas’ Permian, this means that while production has roughly doubled over that period, emissions declined – by 6.3 percent in the Permian’s case, or an amazing 47 percent in New Mexico’s San Juan basin.

This report caps off a year of stellar news about emissions reductions from oil and gas development. Earlier this year, EIA found that sulfur dioxide emissions (SO2) produced from U.S. power generation declined 73 percent from 2003 to 2015 as natural gas has become increasingly relied on for electricity in the United States. Along the same lines, EIA also published data this year showing that 63 percent of the 89 MMT drop in CO2 emissions in 2016 could be directly attributed to switching to natural gas for electricity generation. Overall, shifting to natural gas for power production has resulted in a 2,007 MMT reduction in CO2 emissions since 2005, almost twice the amount that can be attributed to renewable energy sources.

More recently, research has found that emissions mitigation techniques are continuing to improve. As a September report from Bloomberg New Energy Finance found, efforts by the five largest oil and natural gas companies resulted in an average 13 percent decline in greenhouse gas emissions between 2010 and 2015, with companies like Exxon and BP reducing emission by 14 percent and 25.5 percent, respectively. Further, a November study from Penn State and funded by the U.S. Department of Energy found methane leakage rates from natural gas activities in the Northeast Marcellus Shale accounted for just 0.4 percent of production. This is well below the rate at which experts estimate emissions would negate the climate benefits of natural gas use – about 3.2 percent – as well as the current estimated global leakage rate of 1.7 percent.

Remarkably, the U.S. has led the world in CO2 reductions since 2005 and reduced oil and gas system methane emissions at the same time that it emerged as the world’s top oil and gas producer. And we have done this while experiencing significant economic growth — a previously unheard of decoupling trend.

Growing Exports

With production skyrocketing and emissions dropping thanks to increased natural gas use, the United States is now in a unique position to help trading partners around the globe achieve their climate goals through liquefied natural gas (LNG) exports. With only one terminal currently in operation and the first shipment of U.S. LNG taking place less than two years ago, American LNG exports have flourished over the past year.

According to EIA, U.S. LNG exports averaged 1.9 Bcf/d through November of this year, something almost unthinkable 10 years ago when the U.S. was importing over 3 Bcf of LNG per day. Moreover, U.S. LNG export capacity increased from about 1.5 Bcf/d in January to roughly 2.8 Bcf/d, with capacity expected to nearly quadruple by 2019 as additional terminals come on line.

Coupled with increased natural gas pipeline exports and decreased reliance on imported natural gas, this year also saw the United States becoming a net exporter of natural gas for the first time in nearly 60 years.

But natural gas wasn’t alone in its export growth over 2017, as oil exports hits record highs as well. In November, U.S. crude exports to China hit an all-time high of nearly 290,000 b/d, with overall U.S. crude exports to Asia hitting a record 877,000 b/d and challenging the OPEC countries as top suppliers to key Asian importers. Considering the ban on U.S. oil exports was lifted just two years ago, America’s improving position as a key player in the global oil market is that much more astonishing.

Critics have claimed that increased U.S. oil and natural gas exports would send energy prices soaring. But that simply has not been the case.

Billions of Dollars in Investment

Unsurprisingly, the growth in production and exports has been met with equal enthusiasm for increased investment in shale development. According to the International Energy Agency (IEA) 2017 World Energy Investment report, U.S. shale investment grew 53 percent in 2017, with the next largest increase in spending coming from Russia at only six percent.

This growth in investment was apparent right off the bat, with ExxonMobil acquiring roughly 275,000 acres in the Permian for $6.6 billion in January, while other major news this year included EQT’s $8.2 billion acquisition of Marcellus producer Rice Energy and the $19.8 billion in private equity funding raised for energy ventures in the first quarter of the year alone. This focus in investment shows no signs of slowing either, as oil producers are expected to spend $100 billion in U.S. oil fields next year.

Upstream isn’t the only segment of the industry that saw a surge in investment this year, however. As a key component in the manufacture of chemicals, the growth in U.S. shale production has so far spurred $185 billion in chemical project capital investment, according to the American Chemistry Council. Additionally, production from the Eagle Ford shale is driving $50 billion in port and export infrastructure investment at the Port of Corpus Christi alone.


There are so many benefits from oil and gas for which to be thankful this year; from record production dropping prices for consumers, to billions of dollars in investment providing new jobs and economic growth. But if nothing else, 2017 showed the oil and gas industry is strong and here to stay.

Hope you have a safe Holiday Season and happy New Year!

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