In 2005, I was at a meeting of energy experts close to Dominion Energy Inc.'s (D) liquefied natural energy (LNG) terminal in Cove Point, Maryland.
At the meeting, it was unanimously concluded that at least 15% of U.S. natural gas demand would be met by LNG imports within the next decade.
In those days, nearly 70% of the U.S crude demand was projected to be met by imports. At that time, American oil production was not even 7 million barrels a day with well over 60% of total volume coming from "stripper wells" - each providing less than 10 barrels daily but many more barrels of water than oil.
Back then, we were aware of the potential lurking in shale and tight oil and gas... But nobody could have foreseen (myself included) the largesse LNG would provide.
Well, a great deal has changed since then...
On Wednesday, the U.S. Department of Energy reported that the U.S. would become a net exporter of crude oil and natural gas by 2022, which would mark the first year that U.S. energy exports surpassed imports since 1957, when Dwight Eisenhower was president.
And that is a very big deal.
The Energy Market's Dramatic Transformation
Understanding why the U.S. is on pace to export more energy than it imports boils down to two events that have dramatically transformed export prospects.
The first being when lawmakers ended the 40-year ban on U.S. oil exports back in December 2015.
At the time, excess supply was wreaking havoc on the energy sector as a whole. There was just too much American oil sitting around in storage, with no one around to buy it.
The second event was the LNG Revolution.
The growth in U.S. LNG exports has dramatically transformed the global energy markets.
As I said above, just over a decade ago, the U.S. was expected to become a growing LNG importer, not exporter - likely to be dependent on Russian, Middle Eastern, and North African gas.
Instead, the U.S. has quickly become a dominant force in the LNG market by offering cheaper and more flexible cargos, and by being a more politically palpable supplier.
Fact is, both of these events have significant implications for investors because they bring into focus some companies likely to profit - a trend that should be continuing for some time.
America's Energy Dominance
The crude export totals coming out of the U.S. have been nothing short of staggering.
Even during the "prohibition" period, there were still some exceptions for low-grade oil (not having a sufficient domestic market) and a few consignments designated as tolling (moving raw material out in return for refined product coming back in).
But the overall amount was quite low.
Today, an amount approaching 2 million barrels a day is leaving the US, bound for higher-priced markets abroad.
Exports are becoming capped only by the limits in port infrastructure and tanker availability.