No question, 2019 has been a year of dramatic change across every sector of the oil and gas industry. Any soothsayer worth his crystal ball might have predicted a reversal of fortune for players riddled with debt, but did anyone imagine how so much oil and gas production could completely turn the tables and create a new definition of American energy?
RMR today is following news that the U.S. has officially become a net exporter of crude oil for the first time in 70 years. This, after September exports rose to 8.76 MMBbls per day and has since increased by more than 89,000 Bbls per day. Compare these numbers from a decade ago when we ran an oil trade deficit of more than 13 MMBbls per day. The U.S. this year also became the world’s largest producer of natural gas, which has become the catalyst for our LNG export industry, and in which we are poised to dominate by 2024. The oil and gas shale boom has revitalized our economy, and enabled us to feed urgent energy to impoverished countries and nations converting to cleaner-burning fuels.
Not to be overlooked, the sibling rivalry between risk and reward also flew into a full-out tantrum in 2019 with E&Ps getting bruised especially hard as financial backers laid down the law of shareholder returns and financial discipline. Depressed oil and gas prices, OPEC shenanigans, and trade wars haven’t helped either. In response, the shale boom has slowed for many independent producers now busy rearranging the order of their houses. For all the infrastructure under construction or expansion, midstreamers, too, are feeling the heat with less volumes to transport, process and store.
Today’s mantra is “free cash flow” and, if you think about, probably as it should be for every part of the energy industry. Even in the most volatile times, we must never underestimate how newer technologies, tighter purse strings, and inspired business strategies can ensure brighter days ahead. America is energy independent, and we plan to stay that way.
What do you think?