Never let the facts get in the way of a good story. That’s the credo of the oil and gas industry as it continues to lobby for increased oil and natural gas exports from the United States. After all, the industry claims, we’re on our way to achieving energy independence, and we can help our balance of trade by exporting the extra hydrocarbons we produce. The data, however, contradict the industry’s claim.

Even as the Obama Administration approved the country’s third natural gas export terminal, the United States remained a net importer of natural gas. Production in the United States averaged 69.5 billion cubic feet (bcf) per day this year through May, the latest month for which data is available. But the country consumed 76.9 bcf per day. It IMPORTED almost 7.8 bcf per day from Canada. And, then it EXPORTED about 1.8 bcf per day to Mexico, a number that has been rising. (Both Canada and Mexico are part of an integrated North American natural gas pipeline system.)

The latest approval would lift the capacity for daily liquefied natural gas (LNG) exports from the United States to 5.6 bcf per day or about 8 percent of what we currently produce. The exports would be shipped using special freighters to Europe and Asia. Strangely, these exports would make it necessary for the United States to IMPORT more natural gas in order to support current consumption! The situation seems surreal, and yet, additional approvals for LNG exports are likely in the future.

Natural gas producers keep telling the public and policy makers that U.S. natural gas production is set to grow continuously for decades as they tap large shale gas resources using hydraulic fracturing. But the story isn’t holding up. U.S. natural gas production has been moribund, bouncing along a plateau from January 2012 through May of this year (the latest month for which data is available). Monthly production last year averaged 2.11 trillion cubic feet (tcf), but was slightly less through May of this year at 2.10 tcf per month. This is despite prices that have nearly doubled from the lows in April 2012.

It’s possible that the situation could change, but unlikely for two reasons. Production decline rates for natural gas wells in the United States are averaging around 32 percent PER YEAR. That means about one-third of U.S. production must be replaced EACH YEAR just to stay flat. And, that’s really all that we’ve been doing for the last year and a half.

But the situation is likely to get much worse. Here’s why: Gas from shale deposits is rising as a percentage of total U.S. production. Shale gas wells decline much faster than the current overall rate (which includes conventional gas wells), between 79 and 95 percent in the first three years. That means some 80 to 90 percent of all existing shale gas production must be replaced every three years. With shale gas, it is as if we are on a down escalator trying to go up; but, the down escalator, in this case, is increasing its speed, making any upward progress difficult, if not impossible.

Now, the Congress and the president could make the argument that oil and natural gas producers ought to have the right to sell their products to the highest bidders wherever those bidders are in the world–just as farmers and manufacturers in the United States do. This is a plausible and defensible position, well within the American experience. But this is NOT the argument they are making. And, it’s doubtful that it would be a very popular one, for it means higher energy prices for Americans.

It’s possible that the Congress and the president are just pretending that natural gas production is continuing to rise. In that case, they are knowingly deceiving the public–not the first time, of course, that public officials have done this. But, what would be worse is if they simply don’t know the actual data. Then, they they must be labeled as grossly incompetent since the production, consumption and import data discussed here are all available online from the government’s own U.S. Energy Information Administration.

The same analysis applies to American oil exports, but even more so. U.S. crude oil imports remain slightly higher than U.S. crude oil production. It’s true that a portion of those imports are turned into finished products such as gasoline and diesel and then exported. But even after adjusting for this, the country continues to import just under 50 percent of its crude oil needs.

So, the rapidly increasing rail shipments of oil to Canada that we are witnessing do NOT reflect an America producing more oil than it needs. These shipments simply reflect an oil industry taking advantage of the higher prices that customers in eastern Canada are willing to pay.

(What a minute, you must be thinking. I thought Canada was a major oil exporter. Canada is both an importer and exporter. For a more detailed explanation of this strange situation, see "Canadians could free themselves from oil imports, but will they?")

So, the real reason that the oil and gas industry wants a loosening of restrictions on exports of American-produced oil and natural gas is so that it can take advantage of higher prices abroad. This is particularly true for natural gas which sells in the United States for $3.32 per cubic feet (Henry Hub – August 9), but $11.60 in Europe (July 31) and $17 in Japan (July 31), a good proxy for Asian prices. There are costs involved in liquefying the gas for shipment via freighter. But, the profit margins are far greater than the profits currently available from domestic sales. In fact, there is reason to believe that major international oil companies which bought huge positions in U.S. shale gas plays a few years ago have been losing money ever since on those positions when all costs including the costs of acquisition are taken into account.

As a matter of policy, higher natural gas and oil prices within the United States would spur the deployment of renewable energy by making it more competitive. Maybe this is the secret agenda of the Congress and the White House. I very seriously doubt it. I think both are simply bowing to the wishes of the oil and gas industry, while hoping the public doesn’t find out what’s really going on. Worse yet, the Congress and the president may not really understand what’s going on themselves.