The U.S. is a global energy superpower; it’s the world’s largest producer of oil and natural gas and has become one of the world’s largest gross exporters of refined oil products such as gas and diesel fuel.
Oil production has grown more in the U.S. over the past five years than anywhere else in the world. If given the option, most of the world would like to get its energy supply from the U.S. because of the volatility of the Middle East. If the 20th century federal ban on crude oil exports were lifted, it would result in more jobs, greater energy production and lower prices at the gas pump.
Currently, the U.S. can export natural gas and to some degree natural gas liquids (NGLs). Liquification and regasification of NGL make the process expensive and the resulting export or import terminals expensive. Despite that, the greatest barrier to export is the time-consuming federal permitting process. Current trade policies make it difficult for the U.S. to compete with suppliers like Saudi Arabia and Russia.
The question remains, “Why does the U.S. have a tremendous advantage?” The answer is in our crude oil, natural gas and natural gas liquids domestic production:
- Crude oil — This oil is defined by grade, ranging from light sweet crude to heavier sour crude. The only difference is the sulfur concentration. Most of the American refineries have been set up to produce a blend (mix) of light sweet and heavier sour crude. Most of the new shale oil that is being produced is light sweet crude. We have an excess of light sweet crude, and we import the heavier sour crude.
- Natural gas — The U.S has historically had more natural gas than we need. Natural gas is methane combined with other hydrocarbons and is a clean burning fuel.
- Natural gas liquids — Propane, butane and pentane are referred to as NGLs. They are the byproducts of crude and natural gas process. In the U.S., we use propane and butane to heat our homes or for commercial use. In Europe, NGLs enjoy a much wider range of use.
So why is the U.S. advantaged? America has the greatest energy potential of any nation in terms of resources, production capabilities, materials (oil and gas) and expertise. We have the best refineries and raw product that gives us a significant advantage because we have the capability to refine light, medium or heavy crudes that can be used for gas, jet fuel, kerosene and asphaltenes.
While it is necessary to import heavier crudes, there will be an excess of light crudes. If permitted to export light sweet crude oil, the U.S. likely will become the pre-eminent supplier. This will result in a boom to the economy by creating jobs and promoting growth across many industries.
It’s time to get everyone in the government to know it’s critical for the U.S. to effectively export oil which will significantly help other countries break their dependence on nations like Russia and the Middle East.
Matthew P. Figgie is chairman of Clark-Reliance, a global, multi-divisional manufacturing company with sales in more than 80 companies, serving the power generation petroleum, refining and chemical processing industries. Matthew is also chairman of Figgie Capital and the Figgie Foundation. Rick Solon is president and CEO of Clark-Reliance. Rick has more than 35 years of experience in manufacturing and operating companies.
