Gross: The U.S. Isn't Just an Energy Hog

The United States is known throughout the world as a pathetic energy hog. Americans' insatiable need for gas and electricity plays havoc with trade flows (petroleum-related imports accounted for 38 percent of the trade deficit in September) and sustains hostile, undemocratic governments like those in Venezuela and Iran. But a funny thing is happening to the globe's black hole of energy—it's becoming an exporter.

It's common to hear people say that the U.S. is the Saudi Arabia of coal. That doesn't mean that women in Appalachia are forced to walk around covered from head to toe. Rather, the U.S., like Saudi Arabia, has a massive supply—a few hundred years' worth—of an important fossil fuel that everyone on the planet loves to burn. While coal is becoming less popular domestically because of heightened environmental awareness, anthracite still has global appeal. China—along with plenty of other emerging economies—keeps the lights on largely by burning lumps of coal. This adds up to big increases in exports. In the first half of 2010 the U.S. exported 39.8 million short tons of coal worth about $4.7 billion, up 51 percent from the first half of 2009. The biggest customers include South Korea, Brazil, and China. We even send some coal to Newcastle—about 2.14 million tons were shipped to Britain in the first half of 2010.

The U.S. is also the Saudi Arabia of grains. American farmers are so prolific—at growing corn and lobbying for subsidies—that the U.S. now produces huge quantities of transportation fuel from maize and other crops. According to the Renewable Fuels Association, ethanol production is running at a pace of about 12.5 billion gallons for 2010, compared with just 6.5 billion in 2007. Since the domestic market is saturated, and since Brazil, a major producer, has suffered from disappointing sugar harvests, a small but growing chunk of ethanol production is now being shipped overseas. In September of 2010 alone, according to the RFA, 38.8 million gallons of ethanol were exported—more than was exported in all of 2006. Jeff Cooper, vice president of research at RFA, says the industry could export 330 million gallons in 2010, up from 160 million in 2008. The exports—about 3 percent of total production—go to Canada, the Middle East, and Europe.

The U.S. may have long since reached its peak production of petroleum. But technological advances in drilling and extraction have led to a new boom in another fossil fuel: natural gas. More and more companies are using and perfecting the controversial method known as fracking—deploying ultrahigh--pressure water streams to blow apart rocks underneath the earth and release natural gas. The upshot: America's reserves of natural gas, which burns cleaner and produces fewer emissions than coal, have risen 30 percent in the last few years. "Shale gas has brought in a flood of supply, and the question is now, what do you do with it?" says Bill Cooper, president of the Center for Liquefied Natural Gas in Washington, D.C. Earlier in the decade, companies began to build facilities that would allow for the importation of liquefied natural gas (LNG). Now the U.S. may have the capacity to become an exporter of natural gas.

Producers in Alaska have been ex-porting LNG to Asia for a few decades, largely because they had no way to ship the gas to the continental U.S. via pipeline. But exporting natural gas is more difficult than loading coal onto cargo ships or ethanol onto tankers. Companies would have to build plants to liquefy natural gas—an expensive process that requires permits, capital, and customers who will commit to long-term purchases.

There are signs that this is happening. Cheniere Energy Partners this summer applied to the Department of Energy to add liquefaction capabilities to its Sabine Pass LNG facility in Louisiana, just over the Texas border. Earlier this month Cheniere signed a memorandum of understanding with a Chinese firm, ENN Energy Trading, in which ENN "intends to contract 1.5 million tonnes per annum…of bi-directional LNG processing capacity." Translation: if Cheniere gets the necessary approvals and installs the necessary equipment, the Chinese company will consider importing natural gas. The Department of Energy and the Federal Energy Regulatory Commission are reviewing Cheniere's proposal. If things go according to plan, Cheniere could be piping gas onto slow boats to China in 2015.

Gross is economics editor at Yahoo Finance.