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With global energy consumption on the rise, U.S.-based energy producers face a major opportunity to boost exports to historic levels.

A new report from the U.S. Energy Information Administration (EIA) shows that energy consumption is expected to grow 50 percent around the globe over the next 30 years. While the U.S. and other developed nations will see energy consumption rise modestly over this time period, most of this growth will come from Asia and other emerging markets where strong economic expansion is driving up demand.

Residential energy usage will fuel most of the growth in global consumption, while the industrial sector will continue to use the most energy resources. The commercial and transportation industries are also expected to see significant growth in energy usage over the next 30 years, according to the report.

This expected rise in global energy consumption presents an opening for U.S.-based energy producers to ramp up exports to meet this demand. U.S. energy exporters are also poised to benefit in the near term from the Phase One trade deal President Donald Trump recently signed with China. The new deal commits China to purchase more American crude oil, refined products, liquefied natural gas and coal than ever before. Shipments are required to increase from the previous record high set in 2017 by no less than $18.5 billion in 2020 and at least $33.9 billion in 2021.

This deal could result in a massive spike in U.S. oil and gas exports to the globe’s fastest growing economy.

Finding a new frontier for increasing production

Exports are rising at a time when U.S. production of natural gas is at all-time highs. U.S. Energy exports have also been on the rise and even reached a record high in 2018. The country became a net exporter of oil and refined fuels for the first time in nearly 75 years that year. Equally as important, the EIA report suggests that renewable energies will be the fastest-growing energy source over the next three decades. It appears that all energy sources have a place in our future.

But even with these rising exports, U.S. energy producers have needed to find new markets to purchase these resources, which have grown faster than domestic energy needs. This oversupply can create a cap on energy prices and damage profits across the industry. The growing demand overseas and the recent commitments from China could be exactly what the doctor ordered for domestic energy producers.

None of this is to take away from expanded use domestically.

The Edge: A big opportunity – with a few question marks

While these forces could provide U.S.-based producers of natural gas, crude oil, renewables and other energy sources with a boost, uncertainties remain about the U.S. energy sector’s role in serving the growing demanded predicted by the EIA.

For instance, the Phase One trade deal is largely expected to help energy exporters in the short term. But the larger context for trade between the two countries remains complex. Some analysts are concerned about the U.S.’s ability to compete over the long term. Traditionally, the U.S. has lagged behind the Middle East, West Africa and Russia when it comes to supplying China with energy resources. Considering the 5% Chinese import tariffs on American crude and 25% import tariffs on liquid natural gas and propane, the U.S. still faces competitive challenges in becoming a major exporter to China.

Domestically, the Trump administration has made efforts to stimulate growth across the industry, including a pair of executive orders aimed at stimulating pipeline construction and revisions to the National Environmental Policy Act (NEPA). Easing these regulations would significantly roll back certain review requirements that many major infrastructure projects faced and open up more export opportunities. But questions have swirled as to if these rollbacks go far enough.

While the future remains bright, the U.S. energy industry needs the continued support of state and federal lawmakers and regulators to reach the tremendous potential for production and export in the decades to come in the form of predictability and common sense. As change in the industry continues to unfold, energy companies must continue to keep an eye on the geopolitical landscape as well as shifting laws and regulations in Washington and in their home states.