Massive discoveries of oil and natural gas from North Dakota to Pennsylvania and down to Texas have impacted energy markets at a global level. For the most part, Americans have benefited in the form of new jobs and lower gas prices. And on a macro level, the United States has transitioned from a net importer to a net exporter of gasoline.
According to data from the U.S. Energy Information Administration (EIA), despite record gas consumption levels, the U.S. is trending to export more gas than it imported for the second year in a row. Last year, the U.S. became a gasoline net exporter for the first time, with annual gas exports of 56,000 barrels per day. That number has held steady through September of this year.
In the past, the U.S. has imported more gas in the spring and summer months due to a spike in demand but fell into the role as an exporter once the weather cooled, and demand fell. However, that has begun to change as the summer of 2017 saw record lows for imported gas and record highs for exports.
Looking at some of the regional trends impacting these figures shows that the Gulf Coast has historically been the primary supplier for the northeast, and supplemented needs in other areas like the Midwest. However, as discoveries in the Bakken and Marcellus regions have been tapped, the Midwest is using 270,000 fewer barrels/day of gas from the Gulf.
With the Midwest refining more of its own oil, the gasoline being produced in the Rocky Mountain and West Coast regions is now available for export, as is any excess from the Gulf. Starting in 2013, Gulf Coast gasoline exports have increased by 236,000 b/d. The destinations have primarily been Mexico, as well as countries throughout Central and South America.
At the same time, gasoline consumption in the U.S. recently set a monthly record, hitting 9.8 million b/d in August. To meet both domestic and export demands U.S. refineries have been running at high levels, including a record output of 17.8 million b/d of gas for the week ending August 25.
The increased demand has led to year-over-year gas price increases, but they are still a dollar less than the national average three years ago and $1.25/gallon less than five years ago. With foreign markets playing a bigger role in the purchasing of U.S. gasoline, prices should stay historically lower. This lower rate provides Americans with more purchasing power in other areas, boosts consumer confidence, encourages investment, and helps contribute to the incremental economic growth currently being experienced.