by Denise A. Bode
The Energy Information Administration issued a report this week that shows exports of crude oil and refined petroleum products reached record levels in the first half of 2017.
Crude oil exports in the first half of 2017 increased by more than 300,000 barrels per day (b/d) from the first half of 2016, reaching a record high of 900,000 b/d. Petroleum product exports also grew over the same period with propane and distillate exports reaching record highs of 900,000 b/d and 1.3 million b/d, respectively. Following the removal of restrictions on exporting U.S. crude oil in December 2015, total volumes of crude oil exports and the number of destinations for those exports both increased. The United States exported crude oil to 26 countries in the first half of 2017 compared with 17 countries in the first half of 2016.
Canada remained the largest recipient of U.S. crude oil exports but imported an average of 46,000 b/d fewer than in the first half of 2016. China increased its crude oil imports from the United States becoming the second-largest importer of U.S. crude oil. Distillate exports in the first half of 2017 were 14% higher than in the first half of 2016, with exports to South and Central America accounting for most of this growth. The share of distillate exports to Central and South America increased slightly to 56%, while the share of distillate exports to Western Europe fell to 19%. Mexico remained the largest single destination for U.S. distillate, averaging 17% of total exports (223,000 b/d), followed by Brazil and the Netherlands.
In the first half of 2017, despite consistently strong domestic demand, U.S. exports of total motor gasoline increased by 3% from the first half of 2016. High levels of domestic production of gasoline contributed to this record-high export level with Mexico as the destination of more than half (53%) of total U.S. gasoline exports in the first half of 2017. Recent market reforms in Mexico, which allow entities other than state-owned Pemex to import petroleum products, may have contributed to the recent growth in Mexico’s gasoline imports from the United States. Although Mexico produces large amounts of crude oil, Mexico’s refinery output of products such as gasoline has been declining since 2015.
U.S. propane exports reached a record high of 913,000 b/d in the first half of 2017, up from 793,000 b/d in the first half of 2016. Most of this increase is from U.S. exports to Asian markets, which accounted for 76% of the growth since the first half of 2016, and most of the destination countries for U.S. propane exports are Asian markets. This is important to note for food processing sector as they are a significant domestic market for propane.
The rest of the story is the state of play on imports and demand. Crude oil imports into the U.S. remain steady at around 7.4 million barrels a day (b/d), a little below last year at the same time. Imports continue to remain well below the historic high of 2005 when the U.S. imported over 10 million (b/d). U.S. production is projected to be 9.4 million (b/d) in the last half of 2017 and higher in 2018 with Americans consuming a little under 20 million (b/d) of petroleum products made from crude oil.
All this matters because the data demonstrates across the board how the U.S. has become a dominant player in global petroleum markets. The expansion of crude oil exports is especially noteworthy — the lifting of the crude export ban in late 2015 combined with the shale oil surge has enabled a major rise in U.S. crude shipments.
ENERGY TRANSPORTATION NEWS
- Project approvals splinter FERC, trigger rare dissent
- Rover project cited in Mich. Wetland spill
- State Department approves Enbridge oil sands pipeline expansion
- BP launches IPO for new Houston business
- Senate Republicans Seek to Offer Input on Infrastructure Package
- Chatterjee ‘strongly’ disagrees with LaFleur on pipelines, presses to speed permits
- FERC chief calls for review of agency enforcement work
- PHMSA wants more comments on gas storage rule
- Houston’s Hilcorp proposes Arctic drilling from artificial island
- Bipartisan House caucus urges Pruitt to halt repeal
- Greens ask court to maintain truck standards
- Pruitt issues EPA directive to curb ‘sue and settle’
- Pruitt to issue directive on science advisers, grants
- BSEE Begins Investigation of LLOG’s Gulf of Mexico Oil Spill
- States, greens ask court to issue Clean Power Plan ruling
- Gulf oil spill may be largest since 2010 BP disaster
ENERGY POLICY NEWS
- California, New Mexico sue over repealed Interior royalty rule
- Senate Dems to oppose drilling in refuge during budget debate
- Republican Senators Seek to Speed LNG Export Approvals
- Nobody Knew Energy Policy Was So Complicated
- Former FERC chairs blast DOE proposal as ‘a significant step backward’
- Democratic bid to block ANWR drilling in budget falls short
ENERGY MARKET NEWS
- U.S. drillers idle rigs in Eagle Ford
- The Challenges for the Energy Industry
- Oil Rises as Geopolitical Risks Return
- Gasoline prices fall for fifth consecutive week
- Exxon buys terminal for its push into the Permian Basin
- Oil inventories take big dip
GLOBAL ENERGY NEWS
- Five things to know about Trump and NAFTA
- Japan exasperated by Trump’s trade policies
- U.S. pullback from Iran deal could discourage energy investment
- Trade talks with Canada and Mexico dissolve in harsh words
- NAFTA talks hit impasse as U.S. slams trading partners
- Algeria Adds Voice to Calls for OPEC to Continue Production Cuts
- Schroeder Says U.S. Seeks Weaker EU-Russia Energy Ties
- OPEC send strongest signal that output cuts may run to the end of 2018
- Oil Drops as Geopolitical Worries Ease
- Trump Names Former Texas Regulator as White House Environmental Advisor
- Panel to vote on EPA, NRC nominees
- Biofuel dispute threatening air nominee
- Inhofe waiting for deal on EPA picks before lifting his FERC hold
- EPA chemical nominee starts at EPA as Pruitt advisor
- Gillespie gets clean energy backing Va. race
RENEWABLE ENERGY NEWS
- Pruitt wins Fischer’s support for Wehrum after RFS meeting
- White House told EPA to back off on biodiesel cuts
- Midwest senators win RFS concessions from EPA
TAX REFORM NEWS
- Trump, McConnell Open Door to Tax Revamp Slipping Into 2018
- Senate starts clock on budget debate
- Bipartisan Tax Bill Possible, Hatch Says After Trump Meeting
- Senate passes budget clearing hurdle for tax overhaul
- Senate Adopts Budget, Giving Momentum to Trump’s Tax Plans
FROM THE CHART ROOM
Energy Intensity In Manufacturing In The United States Decreases
U.S. manufacturing overall fuel intensity decreased by 4.4% from 3.016 thousand British thermal units (Btu) per dollar of output in 2010 to 2.882 thousand Btu in 2014. U.S. manufacturing fuel consumption rose 4.7% from 2010 to 2014, although real gross output increased more rapidly at 9.6%.
Generally, the most energy-intensive U.S. industries’ share of manufacturing gross output also declined from 2010 to 2014 (35.1% of total manufacturing to 32%), although they maintained the same share of fuel consumption (80.7%). The group of energy-intensive industries as a whole actually increased in energy intensity by 4.6% as the rest of manufacturing decreased by 8.5%. The shift in output toward less energy-intensive manufacturing contributed to the decline in overall manufacturing energy intensity in the United States. Most notably, U.S. transportation equipment manufacturing, a relatively low energy-intensive industry, grew 30.8% in gross output over that period, exceeding the overall manufacturing increase of 9.6%.
Although manufacturing output and fuel consumption rose between 2010 and 2014, U.S. manufacturing employment decreased over that period, yielding an increase in labor productivity.
Natural gas used in manufacturing between 2010 and 2014 increased its share of total energy, a measure that includes both fuel and nonfuel use.
Four major U.S. industries accounted for 93% of the coal used as fuel in manufacturing in 2010: nonmetallic minerals, paper, chemicals, and food. Except for chemicals, those industries showed reduced shares of coal and increased shares of natural gas between 2010 and 2014.
Link to EIA: http://bit.ly/2zyH2HO
Michael Best Strategies’ Energy Team
- Denise Bode
- Greg Brophy
- Beth Cubriel
- Andrew Cook
- Chip Englander
- Sarah Helton
- Ross Romero
- Thomas Schreibel
- Kevin Swanson
- Jeffrey Sherman (Michael Best)
About Michael Best Strategies
Michael Best Strategies focuses on achieving clients’ objectives through unparalleled strategy development and deployment for implementation, pragmatic guidance on public policy development, and government relations. The Strategies team specializes in a full range of services, including government relations, public policy consulting, grassroots advocacy, public affairs, conference planning, and strategic political relationships. For more information, visit michaelbeststrategies.com.