Energy Industry Helps U.S. Set Exports Record

The U.S. Census Bureau announced in December that U.S. exports in October 2013 were the highest of any month on record. The $192.7 billion of exports eclipsed exports from October 2012 by $10 billion, and the U.S. trade deficit decreased by over $2 billion from September to October. The jump in exports from October 2012 to October 2013 resulted from increased exports of many goods, including petroleum products, consumer goods, and cars and car parts.

The $12.5 billion of U.S. petroleum exports in October 2013 is the highest amount on record and is receiving a great deal of attention. The U.S. Energy Information Administration (“EIA”) reported additional good news for the energy industry: “{m}onthly estimated domestic crude oil production exceeded crude oil imports in October {2013} for the first time since February 1995, while total petroleum net imports were the lowest since February 1991.” Crude oil production should continue to increase in 2014: the EIA expects the United States to produce a daily average of 8.5 million barrels in 2014, a higher number than the 7.5 million barrels per day averaged thus far in 2013.

Recent announcements involving exports of liquefied natural gas (“LNG”) also indicate increasing production and exports of energy products. Houston-based Cheniere Energy, Inc. announced a twenty-year agreement with Pertamina (Indonesia’s state-owned energy company) for exports of LNG. Another Houston-based company, Freeport LNG, also announced a $1.3 billion equity agreement to finance a liquefied natural gas facility in Texas and anticipates that the facility will create at least 20,000 new jobs in Texas and the Gulf Coast. While neither facility will be operational for a few years, these announcements indicate growing production and exports of energy products and confidence in the future of the U.S. energy industry.

Crude oil production estimates and recent announcements of new LNG production facilities indicate that exports of energy products will continue to increase in the foreseeable future. These trends in should create jobs and stimulate exports, which will provide significant benefits to the U.S. economy in the years to come.

Clint Long