Wednesday, September 25, 2019
(September 25, 2019) — U.S. petroleum and natural gas production respectively increased by 16% and 12% in 2018, with the two totals combined establishing a new output record, the Energy Information Administration (EIA) reports. The U.S. surpassed Russia in 2011 to become the world’s largest producer of natural gas and passed up Saudi Arabia in 2018 to emerge as the world’s leading petroleum producer. EIA notes that last year’s growth was one of the largest absolute petroleum and natural gas production increases from a single country in history.
For the U.S. and Russia, petroleum and natural gas production is nearly evenly split; Saudi Arabia’s production heavily favors petroleum. Petroleum production is composed of several types of liquid fuels, including crude oil and lease condensate, natural gas plant liquids (NGPLs), and bitumen. The U.S. produced 28.7 quadrillion Btu of petroleum in 2018, which was composed of 80% crude oil and condensate and 20% NGPLs—ethane, propane, butane, isobutane, and natural gasoline.
U.S. crude oil production rose 17% last year, setting a new record of nearly 11 MMbbld, equivalent to 22.8 quadrillion Btu in energy terms. Production in the Permian region of western Texas and eastern New Mexico contributed to most of the growth in crude output. The U.S. also produced 4.3 MMbbld of NGPLs in 2018, equivalent to 5.8 quadrillion Btu. U.S. NGPL production has more than doubled since 2008, when the market for the products began to expand.
U.S. dry natural gas production increased 12% in 2018 to 28.5 Bcfd, or 31.5 quadrillion Btu, reaching a new record-high for the second year in a row. Ongoing growth in liquefied natural gas export capacity and the expanded ability to reach new markets have supported increases in U.S. natural gas production, EIA comments.
Russia’s crude oil and natural gas production also reached record levels last year, encouraged by rising global demand. Russia exports most of the crude oil that it produces to European countries and to China. Since 2016, nearly 60% of Russia’s crude exports have gone to European member countries of the Organization for Economic Cooperation and Development. Russia’s crude oil is also an important source of supply for China and neighboring nations.
Russia’s natural gas production increased by 7% in 2018, which exceeded the growth in exports. The Yamal LNG export facility, which loaded its first cargo in December 2017, can liquefy more than 16 million tons of natural gas a year and accounts for nearly all of the recent growth in Russia’s LNG exports. Since 2000, more than 80% of the country’s gas exports have been sent to Europe.
Saudi Arabia’s annual average crude oil production rose slightly last year, but it remained lower than 2016 when its output reached a record high. However, Saudi Arabia’s crude production reached an all-time monthly high in November 2018 before the December 2018 agreement by the Organization of the Petroleum Exporting Countries to extend production cuts.
In addition to exporting and refining crude oil, Saudi Arabia consumes crude oil directly for electricity generation, which makes Saudi crude consumption the highest in the summer when electricity demand for space cooling is relatively high. Since 2016, Saudi Arabia’s direct crude oil burn for electric power generation has decreased for a number of reasons, including demand reductions from a partial withdrawal of power subsidies, greater use of residual fueloil, and increased availability of domestic natural gas.
Crude oil exports account for about 60% of Saudi Arabia’s total economic output. China, along with Japan, South Korea, Taiwan, and the U.S. remain critical markets for Saudi petroleum exports.
(SOURCE: The Weekly Propane Newsletter, September 23, 2019. Available by subscription.)
For the U.S. and Russia, petroleum and natural gas production is nearly evenly split; Saudi Arabia’s production heavily favors petroleum. Petroleum production is composed of several types of liquid fuels, including crude oil and lease condensate, natural gas plant liquids (NGPLs), and bitumen. The U.S. produced 28.7 quadrillion Btu of petroleum in 2018, which was composed of 80% crude oil and condensate and 20% NGPLs—ethane, propane, butane, isobutane, and natural gasoline.U.S. crude oil production rose 17% last year, setting a new record of nearly 11 MMbbld, equivalent to 22.8 quadrillion Btu in energy terms. Production in the Permian region of western Texas and eastern New Mexico contributed to most of the growth in crude output. The U.S. also produced 4.3 MMbbld of NGPLs in 2018, equivalent to 5.8 quadrillion Btu. U.S. NGPL production has more than doubled since 2008, when the market for the products began to expand.
U.S. dry natural gas production increased 12% in 2018 to 28.5 Bcfd, or 31.5 quadrillion Btu, reaching a new record-high for the second year in a row. Ongoing growth in liquefied natural gas export capacity and the expanded ability to reach new markets have supported increases in U.S. natural gas production, EIA comments.
Russia’s crude oil and natural gas production also reached record levels last year, encouraged by rising global demand. Russia exports most of the crude oil that it produces to European countries and to China. Since 2016, nearly 60% of Russia’s crude exports have gone to European member countries of the Organization for Economic Cooperation and Development. Russia’s crude oil is also an important source of supply for China and neighboring nations.
Russia’s natural gas production increased by 7% in 2018, which exceeded the growth in exports. The Yamal LNG export facility, which loaded its first cargo in December 2017, can liquefy more than 16 million tons of natural gas a year and accounts for nearly all of the recent growth in Russia’s LNG exports. Since 2000, more than 80% of the country’s gas exports have been sent to Europe.
Saudi Arabia’s annual average crude oil production rose slightly last year, but it remained lower than 2016 when its output reached a record high. However, Saudi Arabia’s crude production reached an all-time monthly high in November 2018 before the December 2018 agreement by the Organization of the Petroleum Exporting Countries to extend production cuts.
In addition to exporting and refining crude oil, Saudi Arabia consumes crude oil directly for electricity generation, which makes Saudi crude consumption the highest in the summer when electricity demand for space cooling is relatively high. Since 2016, Saudi Arabia’s direct crude oil burn for electric power generation has decreased for a number of reasons, including demand reductions from a partial withdrawal of power subsidies, greater use of residual fueloil, and increased availability of domestic natural gas.
Crude oil exports account for about 60% of Saudi Arabia’s total economic output. China, along with Japan, South Korea, Taiwan, and the U.S. remain critical markets for Saudi petroleum exports.
(SOURCE: The Weekly Propane Newsletter, September 23, 2019. Available by subscription.)
