Petroleum imports to the United States have been a major concern for policymakers for more than 50 years.
Economists and national security experts warned of the huge outflow of dollars that were leaving the U.S. and going to countries that were not very friendly, such as Iran, Iraq and Venezuela. It became such a huge concern that the federal government created the Strategic Petroleum Reserve as an insurance policy against a future supply disruption.
Petroleum imports, which includes crude oil and petroleum products, rose steadily through the 1960s and the remainder of the 20th century until 2008 when oil and natural gas production began to rise. In 2015, the law restricting exports was lifted and the tide turned.
This week the Energy Information Administration announced the U.S. exported more petroleum than it imported in September for the first time since it began keeping records in 1973. EIA said exports exceeded imports by 89,000 barrels per day (b/d).
“Increasing U.S. crude oil production, which rose from an average of 5.3 million b/d in 2009 to 12.1 million b/d in 2019 through September, has resulted in a decrease in U.S. crude oil imports from an average of 9 million b/d in 2009 to 7.0 million b/d through September 2019,” EIA stated. “The decrease in U.S. oil imports also corresponded with a decrease in the number of sources the United States imported crude oil from.”
U.S. crude oil exports have been the largest contributor increasing from 591,000 b/d in 2016 to 2.8 million b/d in September.
The United States remains a net importer of crude oil importing primarily heavy high-sulfur crude oils that most U.S. refineries are configured to process.
Canada and Mexico are the two largest sources of imports comprising about 60 percent of total imports currently, according to EIA.
“At the same time, U.S. refineries responded to increasing domestic and international demand for petroleum products (such as distillate fuel, motor gasoline, and jet fuel) by increasing throughput,” EIA said. “Gross inputs into U.S. refineries rose from an annual average of 14.6 million b/d in 2009 to 17.0 million b/d through the third quarter 2019, and they have regularly set new monthly record highs.”
EIA noted the increase in refinery production of petroleum products has outpaced the increase in U.S. consumption, contributing to an increase in petroleum product exports. The United States has gone from net petroleum product imports of 698,000 b/d in 2009 to net petroleum product exports of 3.2 million b/d so far in 2019. In the first nine months of 2019, the United States exported 1.4 million b/d of distillate, 1.1 million b/d of propane, and 864,000 b/d of motor gasoline, the three largest petroleum product exports.
The dynamic changes in the U.S. petroleum industry provides a more stable and secure energy supply and enhances the nation’s economy and national security.
Alex Mills is the former President of the Texas Alliance of Energy Producers.
Subscribe to OILMAN Today, our industry newsletter covering oil and gas business news, events and information to watch, delivered to your inbox.