Oil Exports Are Not The Same As Net Oil Exports

A NYT piece on the growth of oil exports may have given readers a misleading impression on the state of the U.S. oil industry. The piece was headlined, “oil exports, illegal for decades, now fuel a Texas port boom.” It told readers:

“Oil exports grew slowly through most of 2016, but this year there has been a surge reaching 1.3 million barrels a day — roughly 15 percent of domestic production — which even at today’s depressed prices is worth more than $1.5 billion a month.”

It is worth noting that the rise in oil exports has been accompanied by a rise in oil imports. According to the Energy Information Agency, imports of crude and petroleum products bottomed out at 9.2 million barrels a day in 2014. By 2016 imports had risen by more than 900,000 barrels a day to 10.1 million.

By allowing exports of oil, some oil that would have otherwise been consumed domestically is instead being exported. This oil is being replaced by oil from other countries. While this opening of trade increases efficiency, if we ignore the environmental costs associated with more transportation of oil and petroleum products, it means somewhat higher prices for domestic consumers.

The oil that is being imported almost certainly costs more than the domestically produced oil that is now being exported instead of sold domestically. It would have been helpful to note this fact in the article.