A quiet reversal in hemispheric energy trade
by Jed Bailey | October 9, 2012
The recent surge in domestic oil and natural gas production, combined with stagnant demand growth, has steadily chipped away at the United States’ net energy imports. The trend has prompted speculation that “hemispheric energy independence”—where U.S. energy imports are more than matched by exports from Canadian and South American energy producers—could be a reality by the end of the decade. It is a beguiling idea, although one that disregards the global nature of energy markets. More importantly, the focus on broader energy independence overlooks a dramatic shift in hemispheric energy trade that has already taken place.
Over the past seven years, net petroleum imports from Latin America have been cut in half. In the same period, natural gas and coal flows completely reversed direction, transforming the United States from a net importer to a net exporter to the region. This rapid and continuing shift will have significant long-term implications for hemispheric energy relations. Historically, U.S. foreign energy policy promoted regional energy investment to boost supplies available for export to the United States and supported U.S. companies investing abroad. Now that the United States is not just an energy importer, but also the largest energy exporter to the region, this framework must evolve to balance a more complex set of priorities involving a much greater number of interested stakeholders.
This report examines the US energy boom in a hemispheric context and reviews the implications for regional energy relations.
This report was originally published by the University of Miami Center for Hemispheric Policy as part of the “Perspectives on the Americas” series.