This is an excerpt from our November 21 Morning Briefing.

Climate activists believed that if governments were to impose regulations that limit fossil fuel production, fossil fuel prices would rise, encouraging more usage of renewable energy sources. Nevertheless, government support still would be needed to make renewable sources cost competitive. That reality combined with geopolitical developments have made the transition from fossil to renewable fuels far less smooth than climate activists had assumed.

Here in the US, notwithstanding the Biden administration's commitment to the transition, the fossil fuel industry has kept America not only energy independent but also exporting more fuel to our allies in Europe, who have been scrambling to replace their imports of Russian fossil fuels because of the Ukraine war.

Consider the following:

(1) US petroleum production. US crude oil field production was 12.0 million barrels per day (mbd) during September, still below the record high of 13.0mbd during November 2019 (Fig. 21). However, natural gas liquids production rose to 6.0mbd during September. It has been trending higher since 2008, when it was about a third as much. Meanwhile, production of biofuels plus processing gains has remained steady around 2.1mbd. Add them all together, and US petroleum production was 20.2mbd during September, almost matching the pre-pandemic record high.

Weekly data show that during the November 11 week, the US had net imports of -1.9mbd, while petroleum products supplied (which actually is a measure of usage) was 20.9mbd (Fig. 22). This implies that US petroleum production rose to a record 22.7mbd during the latest week.

The US first turned into a net exporter of petroleum during late 2019.

(2) US natural gas production. The US turned into a net exporter of natural gas for the first time during October 2017 (Fig. 23 and Fig. 24).

Prior to the Ukraine war, Russia supplied up to 40% of Europe's gas. American liquid natural gas suppliers, which tend to have more flexible contracts than those in other countries, have responded quickly to Europe's needs. This year, shipments to Europe from the US have more than doubled. "The price of a shipload of L.N.G., which might have sold for $20 million two years ago, soared to perhaps $200 million last summer, and is now about half that, with winter fast approaching," according to a November 16 NYT report.

The story notes: "Now, around 40 tankers with chilled gas worth billions have been sitting off the coasts of Europe and Asia, anticipating that if they wait until the weather turns colder before unloading their fuel, they will be paid higher prices."

Europeans should give thanks to Americans for producing plenty of natural gas.