Media outlets rarely dwell on positive trends, but it’s been hard to miss the good news at the gasoline pump. As 2018 ended, gas prices fell to their lowest in nearly two years — below $2 a gallon in some states. …
But the good news goes beyond what we spend fueling our cars and trucks. In many ways, 2018 was the story of America’s continued energy dominance.
Throughout the year, American energy producers broke records and surpassed domestic supply levels that we haven’t seen in many decades. Last September, the U.S. became the world’s largest crude oil producer, surpassing Russia and Saudi Arabia.
According to the federal government’s Energy Information Administration (EIA), crude oil production increased from about 9.5 million barrels per day in the beginning of 2018 to 11.7 million barrels per day by year’s end. In December, EIA announced that the U.S. exported more oil and refined petroleum products than it imported — the first time in more than 35 years.
America’s energy revolution is a remarkable story that demonstrates the rewards of human ingenuity and entrepreneurial passion. Those rewards trickle down to the driver through lower prices. While many factors influence the price at the pump, we cannot overlook the fact that domestic supply continues to roar ahead.
Oil isn’t the only energy source that thrived in 2018. The U.S. continues to be the global leader in natural gas production, ranking number one for the past decade. According to a new report from EIA, “When final data become available in the coming months, EIA expects that U.S. natural gas production will have reached record levels in 2018.” Increased supplies spell more affordable, dependable power for American households.
Abundant, low-cost power is also a win for energy-using businesses, especially America’s energy-intensive manufacturing base. Natural gas is not only an important energy source, but also an important raw material for many manufacturing processes for fertilizers, chemicals and pharmaceuticals, food processing, industrial boilers and much more.
In fact, capital investment from the chemical and plastics industries topped $200 billion in 2018, an extraordinary number that’s generated hundreds of thousands of direct and indirect jobs. When investment surpassed $200 billion (on 333 projects since 2010), American Chemistry Council president Cal Dooley remarked, “The U.S. remains the most attractive place in the world to invest in chemical manufacturing. We look forward to continuing to transform energy into a stronger economy and new jobs.”
Domestic producers are shipping more liquefied natural gas (LNG) to our friends overseas, too. For the first time ever, LNG exports surpassed 5 billion cubic feet per day. We’re now shipping LNG to 30 different countries across five continents. Furthermore, LNG exports would bolster U.S. national security and the security of America’s allies by reducing the ability of any one nation to use its control of energy resources to threaten U.S. interests. LNG exports can be an integral source for Europeans pining for energy freedom.
Natural gas shipments to Mexico traveling via pipeline exceeded 5 billion cubic feet per day, too. With a new zero-tariff on energy trade deal and new pipeline construction in the works, our neighbors to the south are benefitting tremendously from the glut of U.S. energy abundance.
The success of American energy production in 2018 provides a lot of positive momentum for the New Year. With a new Congress, there are several broken policies to fix that take energy choice away from Americans.
We continue to pick winners and losers among energy technologies using the tax code. The federal government mandates that we blend corn ethanol into our fuel, and more than half the states in the Union have mandates that force a certain percentage of their electricity generation come from renewables. Quite simply, if these energy sources are cost-competitive, they won’t need mandates.
In addition, advances in different small modular nuclear reactors continue to improve, though frustrating regulatory obstacles have proven a giant thorn in the side of nuclear innovation.
When policymakers fully empower producers and consumers by removing all of the government-imposed barriers to innovation, America’s energy renaissance will be firing on all cylinders.
Nicolas Loris is the Herbert and Joyce Morgan Fellow in Energy and Environmental Policy, Center for Free Markets and Regulatory Reform at The Heritage Foundation (heritage.org).