As the U.S. celebrates Independence Day tomorrow, it’s an opportune moment to reflect on the country’s energy independence and its increasingly vital role in global energy markets.
The U.S. achieved record high net energy exports in 2024, shipping out 9.3 quadrillion British thermal units (quads) more energy than it imported, according to the Energy Information Administration (EIA). This marks the highest net export figure recorded since 1949, driven by continued surplus energy production. Energy exports rose by 4% compared to 2023, reaching 30.9 quads, while energy imports remained steady at 21.7 quads.
The concept of energy independence can be defined in various ways, but generally signifies a nation exporting more energy than it imports. By this definition, the U.S. has achieved energy independence each year since 2019, a significant shift from its status as a net energy importer since 1952, according to the EIA.
The Transformation of U.S. Energy
Fueled by the widespread adoption of horizontal drilling and hydraulic fracturing, the U.S. shale revolution significantly boosted domestic natural gas production initially, and then oil production starting around 2010. This surge positioned the U.S. as the world’s leading natural gas producer by 2009, and by 2018, it also became the top oil producer. The increase in production, alongside the lifting of the crude export ban in December 2015, enabled the U.S. to emerge as a key global oil supplier.
It’s important to note that while the U.S. is now a net exporter, it continues to import various forms of energy, including crude oil, natural gas, coal, petroleum products (like gasoline and diesel), and hydrocarbon gas liquids (such as propane). Natural gas and hydrocarbon gas liquids primarily come from Canada.
The escalating geopolitical tensions of recent years have underscored the important role of the U.S. as a global energy supplier. The nation’s abundant energy supplies not only bolster its own energy security but also benefit its allies.
Midstream’s Role in Energy Independence
Midstream companies are vital to the energy sector, facilitating the movement of energy from production sites to their intended destinations, including coastal export hubs. Their crucial role ensures energy products can reach international markets.
Investors can get exposure to the midstream segment with the Alerian MLP ETF (AMLP ) and the Alerian Energy Infrastructure ETF (ENFR ).
ENFR offers exposure to the Alerian Midstream Energy Select Index (AMEI), a composite of North American energy infrastructure companies. ENFR includes corporations and MLPs engaged in the pipeline transportation, storage, and processing of energy commodities.
AMLP delivers exposure to the Alerian MLP Infrastructure Index (AMZI), which is a capped, float-adjusted, capitalization-weighted composite of energy infrastructure MLPs that earn most of their cash flow from midstream activities.
Looking for midstream insights in your inbox? Subscribe here to keep a pulse on midstream investing through our weekly updates.
For more news, information, and analysis, visit the Energy Infrastructure Channel.
VettaFi LLC (“VettaFi”) is the index provider for AMLP and ENFR, for which it receives an index licensing fee. However, AMLP and ENFR are not issued, sponsored, endorsed or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing or trading of AMLP and ENFR.
