America’s energy revolution means …
- A United States that’s more energy self-sufficient – less dependent on others, more secure in the world and better positioned to help friends abroad
- Economic growth and job creation – and with the right policy choices, a golden opportunity to secure American prosperity well into the future
- A stronger U.S. trading posture that, with energy exports, could benefit consumers
Let’s look at some charts that illustrate this American energy renaissance – which is based on the surge in domestic production that has accompanied the growth of safe, advanced hydraulic fracturing and horizontal drilling since the mid-2000s. First, falling U.S. net imports of oil:
Net imports peaked in the 2005-2006 timeframe and have declined steadily as domestic production ramped up. Again, thanks to fracking. According to the U.S. Energy Information Administration (EIA), the U.S. produced 8.7 million barrels of oil per day in 2014 – the highest total since 1985 (8.9 million/day).
This domestic oil production is one of the largest factors in decreasing net crude imports (also improved efficiency and decreased demand). This point can’t be said too much: The less crude the United States imports from other countries, the greater the degree of U.S. energy self-sufficiency. Domestic production growth is the result of innovation, technological advances and a highly skilled workforce in U.S. oil fields. U.S. oil production – not mandated ethanol use under the flawed Renewable Fuel Standard, as some suggest – is key in the decline of net imports. We posted this chart last month:
While U.S. ethanol production has indeed increased since 2008, that increase (yellow) is a small fraction of the increase in domestic crude oil production (blue) – which more than accounts for the decrease in net crude imports over the same period (red).
Now let’s look at the growth of domestic crude oil and ethanol production over the same time period – but on an energy content basis. A 42-gallon barrel of crude oil, from which gasoline, diesel, jet fuel, kerosene, propane and more are produced, has an energy content of 5.8 million British Thermal Units (Btu). That’s about 138,000 Btu per gallon. A gallon of ethanol has an energy content of 84,714 Btu (the upper or gross heating content reported by EIA).
The chart below, using EIA data, shows the energy content (trillions of Btu) from domestic crude production (blue bars) and ethanol (red) in 2008 and 2014, as well as the change in Btu for the two from 2008-2014:
Put another way, domestic crude oil production is responsible for about 95 percent of the increase from 2008 to 2014 on an energy content, or Btu, basis.
What all of these metrics say is that there’s an ongoing American energy revolution, one that’s built on increased domestic production of oil and natural gas – largely developed with hydraulic fracturing and horizontal drilling. It means more energy for the United States, the development of which has created jobs and generated economic growth. America is stronger and more energy self-sufficient than it was, evidenced by falling net crude imports.
With pro-energy development policies – increased access to reserves and commonsense approaches to regulation, leasing and permitting – we can sustain and grow this energy revolution and help make the United States stronger, safer and more prosperous in the future.
By Mark Green
Originally posted September 30, 2015
Energy Tomorrow is brought to you by the American Petroleum Institute (API), which is the only national trade association that represents all aspects of America’s oil and natural gas industry. Our more than 500 corporate members, from the largest major oil company to the smallest of independents, come from all segments of the industry. They are producers, refiners, suppliers, pipeline operators and marine transporters, as well as service and supply companies that support all segments of the industry.
