Trump says U.S. is best on energy. Is he right?

Source: Benjamin Storrow, E&E News reporter • Posted: Monday, August 13, 2018

President Trump likes to talk about how his administration is promoting energy dominance. A quick look at the statistics suggest he’s not wrong. America is a global energy behemoth.

At an event with business executives yesterday at his estate in Bedminster, N.J., the president rattled off a list of impressive statistics.

“Coal exports — clean coal — increased 60 percent last year,” Trump told the executives. “American oil production is at an all-time high. As I said before, we’re the leading country in the world right now for energy. And the United States is a net natural gas exporter for the first time since 1957.”

Trump’s claims are accurate, even if they obscure wider market trends.

U.S. coal exports in 2017 were nearly 100 million tons, an increase of about 60 percent over 2016, according to the U.S. Energy Information Administration (EIA). The increase has been stoked in large part by new demand from India’s industrial sector.

Still, exports remain a sliver of the overall U.S. coal market — they accounted for 12 percent of U.S. production in 2017 — and the far bigger domestic market is shrinking. The 661 million tons of coal consumed by American power plants was the lowest amount since 1983, EIA reported this week.

America’s position in oil markets is similarly complicated.

BP PLC, the oil producer, reckons that the United States pumped more than 13 million barrels of crude oil a day in 2017, representing about 14 percent of global production and making America the world’s largest oil producer.

And while U.S. crude exports have surged, helping reduce the country’s overall trade deficit, they still remain short of leading exporters like Russia and Saudi Arabia. The United States is a net oil importer, though that is likely to change in coming years.

“The statistics have a ‘Hey wow’ effect because the U.S. had this giant vulnerability of net imports,” said Amy Myers Jaffe, a senior fellow who tracks oil markets at the Council on Foreign Relations.

But many of the developments that reversed that trend have been years in the making, long before Trump came into office, she noted.

Technological advancements in horizontal drilling and hydraulic fracturing allowed U.S. oil companies to unlock inaccessible troves of shale oil and gas. Congress lifted the ban on crude exports in 2015, opening foreign markets to U.S. crude with the help of former President Obama (Climatewire, July 27, 2017). And the Obama administration permitted a series of terminals for the export of liquefied natural gas, paving the way for the United States to become a net exporter of gas in 2017.

“The Obama DOE was very aggressive in supporting U.S. LNG,” Jaffe said of the Energy Department. “They approved a lot of terminals, and they got the industry started.”

Whether the United States retains its energy dominance under Trump is an open question.

Deborah Gordon, who leads the climate and energy program at the Carnegie Endowment for International Peace, thinks EPA’s recent proposal to freeze fuel economy standards could be a setback for America’s export ambitions. As cars consume more oil at home, that leaves less to ship abroad, she said.

The growing prospect of a trade war with China, the world’s largest energy consumer, also figures to hinder U.S. energy exports, she said.

“I think Trump should be watching his back,” Gordon said. “We won’t stay No. 1 if we’re not the best and the smartest.”