Energy Makes Up Nearly a Fifth of U.S. Exports this Year

· In the aftermath of Russia’s invasion of Ukraine, oil prices are up from $41.30 to $107 per barrel since 2020, and the International Monetary Fund’s index of natural gas prices is nine times its 2020 level.

· U.S. production of oil, natural gas, and renewable energy up from 41 quadrillion BTUs in 2010 to 71 quadrillion BTUs in 2021.

· Having surpassed Russia and Saudi Arabia last year, the U.S. is the world’s largest energy* exporter for the first time in a century.

The Numbers: Energy share of U.S. merchandise exports -

2022* 18.1%
2021 16.8%
2020 10.5%
2010 6.4%
2000 1.7%
1932 13.2%**
* Six months of available data, January-June 2022

** Previous record

What They Mean:

Export growth figures are usually boring and small: A 2.3% growth rate might suggest a weak year; 7.5% or 10.2% a very good one; a drop of -2% would be exceptionally bad. Here are this year’s U.S. natural gas export rates to a string of European countries, based on the data available for the first six months of 2022:

Sweden 884%

Belgium 588%

Spain 394%

Italy 357%

France 352%

Poland 347%

Lithuania 274%

Netherlands 175%

U.K. 155%

What is going on here? Three things, one transitory and the other two suggesting an accelerating revolution in energy trade:

(a) The usual answer in natural-resource trade is the commodity markets. In the aftermath of Russia’s invasion of Ukraine, oil prices are up from $41.30 to $107 per barrel since 2020, and the International Monetary Fund’s index of natural gas prices is nine times its 2020 level. These effects are typically transitory - with prices up, export money goes up too; when they go back down, export earnings fall with them.

(b) The U.S. produces much more energy than before, propelled by investments made during the high-price China boom era, circa 2004-2012. The Department of Energy’s figures (measured by energy content) show U.S. production of oil, natural gas, and renewable energy up from 41 quadrillion BTUs in 2010 to 71 quadrillion BTUs in 2021. With a lot more available, the U.S. is accordingly exporting more than ever before.

(c) Russia is no longer a reliable supplier. Russia’s use of energy supply as a political tool has convinced European buyers to find new sources, as PPI’s Paul Bledsoe very presciently advised three months before the invasion of Ukraine. American liquefied natural gas (LNG) is the logical replacement on security grounds, and a lower-methane emissions option as well). Louisiana in particular, home to two of the U.S.’ seven LNG terminals, has seen its exports double in two years; Gov. Edwards, noting that “market forces disrupting the world economy are creating a historic opportunity for our state,” plans a set of new infrastructure investments to help make the shift permanent.

Taken together, the figures reveal an incipient revolution in world energy trade. At 16.8% of American merchandise exports in 2021, and 18.1% through June of 2022, energy is already well above the 89-year-old record set in the Hoover administration. (At 13.2%, or $208 million of that year’s Depression-shrunken $1.58 billion in total U.S. exports.) Internationally, having surpassed Russia and Saudi Arabia last year, the U.S. is the world’s largest energy* exporter for the first time in a century. The dollar figures look like this:

2022 $420 billion?**
2021 $240 billion
2020 $151 billion
2015 $105 billion
2010 $82 billion
2000 $13 billion

* Crude and refined petroleum, natural gas, coal, electricity, other.

** Annualized based on six months of available data.