Why is the U.S. exporting so much petroleum these days?
Blake Clayton, an energy fellow at the Council of Foreign Relations, says that not enough people appreciate just how stunning the recent boom in U.S. exports of refined petroleum products really is. Here’s a historical chart showing that we’ve gone from a huge net importer to a huge net exporter in just a few short years:
Now, remember, this is just an increase in refined products. The U.S. is still a colossal net importer of crude oil, in part because overall U.S. oil production has sharply plunged from its peak back in the 1960s, even after the recent (and comparatively small) surge in shale oil production in North Dakota and elsewhere. But our refineries are now doing big business abroad, and it’s one reason why overall exports have been ticking upward lately. And this hasn’t happened in decades: The last time the U.S. was a net exporter of finished gasoline was way back in 1959.
So why is this happening? Clayton offers some theories: “First, North American oil production gains have reduced the country’s reliance on imported oil — not just products, but crude as well — as more oil came from Canadian and U.S. sources. Second, economic growth in Central and South America that outpaces that of the United States is leading to quicker fuel consumption growth in these markets, which is pulling additional volumes south of the border. Third, geographic proximity and highly efficient refining capacity in the Gulf of Mexico means that growing oil streams, from Canadian heavy to U.S. unconventional, are being sent to the Gulf, from which refined products are then sent outward. Fourth, U.S. law mandating the use of ethanol as a gasoline additive has reduced domestic demand for conventional gasoline and boosted supply.”
I’d also add that Americans have been driving less since the 2008 oil shock and financial crisis (and, according to data from the University of Michigan’s Michael Sivak, buying increasingly fuel-efficient cars), which has kept domestic demand for gasoline down.