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America is set to surpass Saudi Arabia in a 'remarkable' oil milestone

The United States wants to surpass Saudi Arabia later this year in exports of oil, natural gas liquids and petroleum products, like gasoline, according to research firm Rystad Energy.

That milestone, driven by the transformational shale boom, would make the United States the world's leading exporter of oil and liquids. That's never been since Saudi Arabia started selling oil overseas in the 1950s, [RYSTAD] said in a statement Thursday

"It's nothing short of remarkable," said Ryan Fitzmaurice, energy strategist at Rabobank. "Ten years ago, no one thought it could happen."

The expected breakthrough reflects how technology has reshaped the global energy landscape. Drilling innovations have opened up huge swaths of oil and natural gas resources that have been trapped at shale oilfields in Texas, North Dakota and elsewhere.

Led by shale, US oil production has more than doubled over the past decade to all-time highs. The United States now offers more oil than any other country, including Russia and Saudi Arabia.

"The shale boom has driven incredible increases in production," said Fitzmaurice. "US production is off the charts."

With ample supply at home, 201
5 Congress lifted the 40-year oil export ban. Overseas oil sales have exploded since then.

"Excess fossil fuels from America wants to be plenty of eager buyers in fast-growing Asia," Per Magnus Nysveen, senior partner at Rystad Energy, wrote in the report.

'Oil dominance'

Saudi Arabia currently exports about 7 million barrels of crude oil, along with 2 million barrels of natural gas and petroleum products, according to Rystad. By comparison, the US exports about 3 million barrels per day of crude oil and another 5 million barrels per day of natural gas liquids and petroleum products.

Rystad expects that to vanish this year, even though Saudi Arabia would keep a comfortable lead

 US oil production has more than doubled over the past decade, paving the way for crude to be shipped overseas. Congress lifted a 40-year ban on oil exports in 2015.

The Permian Basin of West Texas has become the epicenter of the shale boom.

ExxonMobil ( XOM ) which was slow to the shale game, said this week that its soaring production in the Permian Basin can generate an average return of more than 10% – even at just $ 35 a barrel. Exxon now plans to produce more than 1 million barrels per day from the Permian by 2024 – up nearly 80%.

"Increasingly profitable production and a robust global appetite for light oil and gasoline is poised to bring the US to a position of oil dominance in the next few years, "said Nysveen.

National security, environmental implications

That dominance means that the United States can increasingly rely on oil pumped at home.

Earlier this year, the Department of Energy predicts that the United States will export more than it imports in 2020. That has not happened since 1953.

That has important national security implications. While the United States wants to make it to oil, it's no longer than it takes to make oil. Meanwhile, China is importing more oil than ever before.

But US energy dominance carries environmental risk.

A recent report by Oil Change International oil and gas development could unleash the same amount of carbon pollution as almost 1,000 coal-fired power plants.
And just this week, the Solomon Islands was hit with an oil spill caused by a ship carrying hundreds of tons of fuel oil. The oil spill has contaminated waters near a UNESCO World Heritage Site.

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