U.S. Likely World’s Largest Crude Oil Producer, DOE Authorises Short-Term Natural Gas Exports

The Energy Information Administration (EIA) estimated in its latest Short-Term Energy Outlook that the U.S. is now the largest global crude oil producer, likely surpassing Russia and Saudi Arabia.

In February, U.S. crude oil production exceeded that of Saudi Arabia for the first time in more than two decades. In June and August, the United States surpassed Russia in crude oil production for the first time since February 1999.

EIA estimates that U.S. crude oil production averaged 10.9 million barrels per day (bpd) in August, up by 120,000 bpd from June. EIA forecasts that U.S. crude oil production will average 10.7 million bpd in 2018, up from 9.4 million bpd in 2017, and will average 11.5 million bpd in 2019.

Meanwhile, EIA estimates that U.S. crude oil production averaged 10.9 million bpd in August, up by 120,000 bpd from June. EIA forecasts that U.S. crude oil production will average 10.7 million bpd in 2018, up from 9.4 million bpd in 2017, and will average 11.5 million bpd in 2019.

The U.S. Department of Energy (DOE) also announced that on September 6, 2018, a short-term order was issued to the Freeport LNG project to export up to 2.14 billion cubic feet per day (Bcf/d) of LNG over a two-year period to both free-trade and non-free trade agreement countries. This order authorises Freeport’s initial commissioning volumes and other exports pursuant to short-term contracts. Freeport LNG will be exporting the LNG from the Freeport LNG Liquefaction Project, which is currently under construction on Quintana Island, Texas.

During this two year authorisation period, Freeport LNG will be authorised to export LNG to any country not prohibited by U.S. law or policy. The two year export term will become effective on the date of the commencement of the facility’s first export of LNG, currently projected to be in the third quarter of 2019.

Since exports of U.S. LNG began in 2016, over 1.3 trillion cubic feet of U.S. natural gas has been exported. EIA estimates dry natural gas production in the U.S was 82.2 Bcf/d in August, up 0.7 Bcf/d from July. Dry natural gas production is forecast to average 81.0 Bcf/d in 2018, up by 7.4 Bcf/d from 2017 and establishing a new record high. EIA expects natural gas production will continue to rise in 2019 to an average of 84.7 Bcf/d.

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