What once was a fallen industry is now back in business. For the first time since 1973, the United States is the largest producer of crude oil in the world. Ever since congress lifted the 40-year ban on exporting crude oil in 2015, exports have been on the rise. The U.S. now ships all over the world to South America, Europe and areas of Asia. Research by the U.S. Energy Information Administration (https://www.eia.gov/todayinenergy/detail.php?id=38152) predicts that the U.S. will export more energy than it imports by 2020 thanks to increases in crude oil and natural gas production.
Earlier in 2018, the U.S. surpasses Russia and Saudi Arabia to become the world’s largest producer of crude oil. The EIA predicts that U.S. oil production will remain higher than that of Russia and Saudi Arabia. Production is predicted to continue to grow and remain above 14.0 million barrels per day through 2040. By 2020, the U.S. will be a net exporter of petroleum liquids as crude oil production increases and domestic consumption of oil decreases.
The growing production can be attributed to the U.S. shale oil boom. The Permian Basin of West Texas and New Mexico is giving Saudi Arabia’s Ghawar oil field a run for its money. Large oil companies like BP and ExxonMobil have spent billions of dollars to get into the hydraulic fracturing business within the Permian Basin.
Hydraulic fracturing, also known as ‘fracking’, allows for extraction of oils that couldn’t be reached before the technology. Fracking uses a high-pressure water mixture to drill into shale rock underground, releasing the gas inside. Not only is it effective, it has also significantly declined the cost of drilling. This has sent crude oil production soaring and has made the Permian Basin the second most productive oil field in the world after Ghawar. The basin will continue to be a large contributor to the American oil boom until the almost 50 billion barrels of crude oil are extracted.
As for natural gas, U.S. production hit a record high in 2018. Production grew by 10.0 billion cubic feet per day last year, an 11 percent increase from 2017. Net exports increased in 2018 along with production making the U.S. a net exporter of natural gas. U.S. natural gas is becoming competitive in global markets because of liquefied natural gas exports (LNG) to Canada and Mexico, which are estimated to increase until 2030 and remain stable for decades to come.