Regan Brown
The United States is the world's second-largest producer of energy, generating 15% of the world's electricity supply and 16% of the world's energy. Fossil fuels have long produced most of the energy in the US, accounting for 84% of total production and 60% of electric generation as of 2023. In 2023, the US imported about 8.51 million barrels per day of petroleum from 86 countries, while also exporting about 10.15 million barrels per day to 173 countries and 3 US territories. This makes the US a net exporter of petroleum. The US also has a high consumption of gasoline, with Americans using about 135.73 billion gallons of gasoline in 2022, including 134.55 billion gallons of finished motor gasoline.
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What You'll Learn
The US imports oil and refines it domestically
The United States is one of the world's largest oil producers, producing enough crude oil for domestic consumption and exporting millions of barrels daily. In 2023, the US exported about 10.15 million barrels per day (b/d) of petroleum to 173 countries and three US territories. Despite this, the US still imports oil from other countries. In 2023, the US imported about 8.51 million b/d of petroleum from 86 countries, including crude oil, hydrocarbon gas liquids (HGLs), refined petroleum products, and biofuels.
There are several reasons why the US continues to rely on oil imports despite being a major producer and exporter. Firstly, US oil fields are concentrated in Texas and North Dakota, making it more cost-effective for other regions, particularly in the Midwest and Gulf Coast, to import oil from Canada, which has the pipeline infrastructure to supply these regions directly. Canada is also able to supply oil by rail, as its pipeline capacity is limited.
Secondly, US refineries require different types of crude oil to maintain efficiency, keep costs down, and ensure energy security. While about 60% of the crude oil that runs through US refineries is domestically extracted, refineries need approximately 16.5 million barrels per day of crude oil to maintain production levels, which exceeds US production capacity. Many refineries also need heavier crude oil to maximise the flexibility of gasoline, diesel, and jet fuel production.
Thirdly, US producers sell their light crude to international markets, where they can often fetch higher prices than they could domestically. From 1975 to 2015, there was a ban on exporting crude oil from the US, but this was lifted by President Barack Obama as domestic supply increased.
Finally, retooling refineries to process solely US crude oil would be costly and time-consuming, requiring significant changes to infrastructure. The ability to import and export both crude oil and refined products benefits consumers and safeguards US energy security.
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Fossil fuels are the main source of US energy
Fossil fuels, including coal, oil, and natural gas, have been the primary source of energy in the US for over 150 years. In 2023, fossil fuels accounted for about 84% of total US primary energy production, with petroleum, natural gas, and coal being the most prevalent.
The transportation sector is the largest consumer of oil, with motor gasoline being one of the most consumed fuels in the United States. In 2022, Americans used about 135.73 billion gallons of gasoline, including 134.55 billion gallons of finished motor gasoline, and about 0.19 billion gallons of aviation gasoline. Based on energy content, gasoline consumption accounted for about 57% of the transportation sector's total energy consumption and 16% of the US's total energy consumption.
Coal, on the other hand, has seen a decline in consumption in recent years. In 1950, coal contributed about 37% of total US energy consumption, but by 2023, that number had dropped to 9%. This decrease is largely due to the electric power sector adopting other energy sources and reducing coal consumption.
While the US remains a major consumer of fossil fuels, there has been a shift towards renewable energy sources in recent years. In 2023, renewable energy production and consumption reached record highs, with solar and wind energy production seeing large increases. Additionally, in 2020, renewable energy accounted for about 20% of US electricity generation, and this share is expected to continue growing.
Despite the growing adoption of renewable energy, the US still relies heavily on fossil fuels, which have significant negative impacts on health and the environment. Fossil fuels are the largest driver of global climate change, contributing to local air pollution and millions of premature deaths each year. As such, there is a pressing need to transition to low-carbon energy sources, such as hydropower, biomass, wind, geothermal, and solar power.
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The US exports more oil than it imports
The United States has been a net exporter of petroleum and petroleum products since 2020, exporting more oil than it imports. In 2023, the US exported about 10.15 million barrels per day (b/d) of petroleum to 173 countries and three US territories, while it imported about 8.51 million b/d from 86 countries. This resulted in a net export of 1.64 million b/d.
The US exports of petroleum include crude oil and refined petroleum products such as gasoline, diesel fuel, jet fuel, and biofuels. Crude oil exports accounted for about 40% of total US gross petroleum exports in 2023. The US exports petroleum to a larger number of countries than it imports from, with the top five destination countries in 2023 being Canada, Mexico, Saudi Arabia, Iraq, and Brazil.
The US has been able to export more petroleum than it imports due to increased domestic petroleum production and increased petroleum exports since 2005. Additionally, US refineries in the Gulf Coast region find it economically beneficial to export gasoline to Mexico rather than ship it to the US East Coast, as lower-cost gasoline imports from Europe are available there.
While the US has been a net exporter of petroleum since 2020, it remained a net importer of crude oil in 2022, importing about 6.28 million b/d while exporting about 3.58 million b/d. Crude oil imports accounted for about 76% of US total gross petroleum imports in 2023, while petroleum products, made from refined crude oil, were the majority of US exports.
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US oil companies sell high-quality oil and import cheap oil
The United States has been a net exporter of petroleum since 2020, exporting to 173 countries and three US territories. In 2023, the US exported about 10.15 million barrels per day (b/d) of petroleum, while importing about 8.51 million b/d. Crude oil exports accounted for 40% of total US gross petroleum exports, while crude oil imports accounted for 76% of total US gross petroleum imports.
US oil refineries are built to refine cheap crude oil, while domestically produced American crude oil is of relatively high quality. This dynamic incentivises US oil companies to sell high-quality oil and import cheap oil. The final petroleum products sell for about the same price, regardless of the source. Thus, US oil companies prefer to export higher-quality oil and import cheaper, lower-quality oil for domestic refinement.
US domestic production includes shale oil, which is low density and low sulfur. Shale oil sells at a premium on the global market. However, many US refineries, particularly those built in the 1980s, are not equipped to refine light sweet crude like shale oil. Retooling these refineries to handle light sweet crude would require significant capital investment, which oil companies have been hesitant to make.
The US has also exerted pressure on supplies of heavy sour crude, as its large refining capacity means that suppliers will struggle to sell if the US is not buying.
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The US is the world's second-largest energy producer
The United States is the world's second-largest energy producer, generating 15% of the world's electricity supply. In 2021, the US generated 3,988 TWh of electricity, second only to China. The US has been the world's largest oil producer since 2014, primarily due to its production of natural gas liquids, which are counted as oil. The US also leads the world in natural gas liquids (NGL) production, ahead of Saudi Arabia.
The US is a net exporter of energy, exporting more energy than it imports. In 2023, the US exported about 10.15 million barrels per day (b/d) of petroleum to 173 countries and three US territories, while importing about 8.51 million b/d of petroleum from 86 countries. The US's net petroleum exports were about 1.64 million b/d in 2023.
The US's energy production includes a mix of fossil fuels and renewable energy sources. Fossil fuels, such as crude oil, gasoline, diesel fuel, and biofuels, have long been the dominant source of energy production in the US, accounting for 84% of total production and 60% of electric generation as of 2023. However, renewable energy sources, such as wind, solar, and biofuels, have been increasing rapidly. Between 2000 and 2020, wind, solar, and biofuel production increased by a factor of ten, with wind and biofuels surpassing hydropower and wood, respectively, by 2020.
The US's energy consumption is high, with the country being the second-largest energy consumer in 2021. In that year, the US had a per capita energy consumption of 295 million BTU (311 GJ), ranking it tenth in the world. Consumption in 2023 was primarily for industry (33%) and transportation (30%), with home (20%) and commercial building (17%) usage making up the remainder. Motor gasoline is one of the most consumed fuels in the United States, with light-duty vehicles accounting for about 91% of gasoline consumption.
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Frequently asked questions
The US has been a net exporter of energy since 2019. In 2023, the country produced 102.83 quads of energy and consumed 93.59 quads. Fossil fuels—petroleum, natural gas, and coal—accounted for about 84% of total US primary energy production in 2023.
Fossil fuels, nuclear energy, and renewable sources of energy are the primary sources of energy in the US.
Fossil fuels have long produced most of the energy in the US, accounting for 84% of total production and 60% of electric generation as of 2023.
The largest sources of carbon pollution from energy in the US are petroleum (46%), natural gas (35%), and coal (19%).
In 2022, Americans used about 135.73 billion gallons of gasoline, including 134.55 billion gallons of finished motor gasoline.
