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Year in Review: 2019 Was A Pivotal Year for American Oil and Natural Gas

The American oil and natural gas industry broke production and export records, redefined global energy markets, and helped American families save thousands of dollars – all while helping the United States continue to lead the world in reducing emissions.

As 2019 comes to a close, let’s review the highlights from the oil and gas industry’s record setting year:

1: United States Makes Export History

In October, the United States made history, exporting more petroleum products to overseas markets than it imported. As the U.S. Energy Information (EIA) explained:

“EIA estimates that the United States exported 140,000 [barrels per day] b/d more total crude oil and petroleum products in September than it imported; total exports exceeded imports by 550,000 b/d in October. If confirmed in survey-collected monthly data, it would be the first time the United States exported more petroleum than it imported since EIA records began in 1949.” (emphasis added)

After lifting the 40-year crude oil export ban at the end of 2015, America has become a world leader in exporting energy to our allies abroad – even occasionally overtaking Saudi Arabia as the world’s largest oil exporter. Our abundance of shale oil is helping to stabilize global markets, minimize imports, and bolster our national security.

2: World’s Leading Oil and Natural Gas Producer

Seven years ago, the United States supplanted Russia to become the world’s top producer of natural gas, according to BP statistical data. In 2018, America produced 24 percent more natural gas per day than Russia and recorded the largest annual growth seen by any country in history. The Appalachian region alone produces enough natural gas (28.4 bcf/d) to earn it the number three spot over major players like Iran, Canada and Qatar.

As of September 2019, the United States produced 24.8 trillion cubic feet (tcf) of natural gas – a 10.5 percent increase over 2018. From EIA’s December Short-Term Energy Outlook:

“EIA forecasts that annual U.S. dry natural gas production will average 92.1 billion cubic feet per day (Bcf/d) in 2019, up 10 percent from 2018 … EIA forecasts natural gas production in 2020 will average 95.1 Bcf/d.”

Meanwhile, the shale revolution has allowed America to eclipse both Russia and Saudi Arabia as the world’s top oil producer. In fact, between 2008 and 2018, U.S. oil production increased by a staggering 125 percent. This year, the Permian Basin became the highest producing oilfield in the world.

A recent report by the EIA echoed these stats and highlighted gains in American petroleum production:

“Last year’s increase in the United States was one of the largest absolute petroleum and natural gas production increases from a single country in historyU.S. petroleum and natural gas production increased by 16 percent and by 12 percent, respectively, in 2018.”

This growth has continued with EIA data showing that the U.S. oil production in 2019 (as of September) outpaced 2018 production by nearly 13 percent. EIA further predicts in its December Short-Term Energy Outlook:

“U.S. crude oil production to average 13.2 million b/d in 2020, an increase of 0.9 million b/d from the 2019 level.”

The International Energy Agency (IEA) agrees that this is only the beginning. The agency recently revealed that that the United States will dominate world energy markets through 2030, accounting for a staggering 85 percent of the world’s oil production growth and 30 percent of natural gas growth.

3: Record Recoverable and Proved Reserves

IEA’s staggering predictions are explained in part by the industry’s ability to recover more resources than ever – thanks to technological innovation. This year, the amount of recoverable natural gas in the United States reached its highest-ever recorded level of 3,374 tcf. This marks a 20 percent or 557 Tcf increase over the 2016 assessment and the largest two-year increase in the report’s history.

America Gas Association President Karen Harbert explained:

“The United States continues to set new natural gas supply records because of technological improvements and continued learning in gas exploration and production. That same spirit of innovation drives the entire natural gas industry from the companies that transport and deliver natural gas, to the entrepreneurs that develop new technologies that are making natural gas cleaner and more accessible.”

Proved reserves also had a milestone year, again. As EIA reports:

“Another year of stronger oil and natural gas prices increased 2018 oil and natural gas proved reserves in the United States to another all-time record level. Crude oil and lease condensate proved reserves rose by 12 percent, and natural gas proved reserves rose by 9 percent.” (emphasis added)

Growth in proved reserves were led by the Permian (Texas and New Mexico), Bakken (North Dakota) and Marcellus (Pennsylvania) shales.

4: United States leads the world in reducing emissions.

This year, EIA released new data showing that natural gas is continuing to widen the gap with renewables in the reduction of carbon emissions in electricity generation. The shift to natural gas has reduced carbon emissions in the United States by more than 2.8 million metric tons of carbon dioxide since 2005, making it the largest source of energy-related carbon savings.

 

IEA also released research on of the effects of switching to natural gas for electricity generation, and found that this transition could prevent an additional 1.2 billion tons of carbon emissions from entering the atmosphere.

According to IEA director Fatih Birol:

“In the last 10 years, the emissions reductions in the United States has been the largest in the history of energy.”

The United States is achieving more than just carbon emission reductions. This year, the Environmental Protection Agency revealed that combined emissions from six key air pollutants dropped by 74 percent from 1970 through 2018, even as energy use and population increased.

5: Industry fuels GDP, while saving American families money

Bolstered by growing production, the oil and natural gas industry is credited with generating 10 percent of U.S. GDP growth, contributing $218.8 billion to the U.S. economy in 2018 alone. The industry is simultaneously leading all sectors of the economy in creating and supporting the highest paying jobs in America.

The shale revolution isn’t just helping American oil and natural gas workers – it’s saving consumers across the country thousands of dollars every year. Here are some of this year’s most impressive findings:

  • American consumers have saved over $1.1 trillionin the past 10 years at an average of $4,000 per natural gas consuming household.
  • Electricity consumers are saving $203 billion ($2,500 per family) annually. These savings are disproportionately helping lower income families, which spend a large share of their income on energy bills.
  • Lower heating costs have helped prevent 11,000 deaths annually in cold winter months.

In addition to national consumer savings, energy abundant states are reaping the benefits of oil and natural gas production through state taxes, impact fees, and activity on state trust lands. This record revenue is filling state coffers and helping to fund local infrastructure, public education, hospitals, and other public services.

Conclusion:

Despite recent efforts by activists and Democratic presidential candidates to ban fracking and curb our use of fossil fuels– a move that could cost the United States upwards of $4.5 trillion – the oil and natural gas industry continues to fuel our economy, bolster our national security, and decrease our emissions, all while saving Americans money.

This year just confirms that that oil and natural gas is here to stay – with the United States leading the way in providing the world with cleaner, abundant energy to power the globe for decades to come.

 

 

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