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Page added on April 28, 2014

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Quietly, America Takes 1 More Step to Becoming an Energy Export Superpower

Quietly, America Takes 1 More Step to Becoming an Energy Export Superpower thumbnail

America is fast becoming the world’s energy superpower. Thanks to shale production, it leads the world in natural gas production. By next year, the U.S. should pass both Russia and Saudi Arabia in oil production. On top of that, America is also a top producer of natural gas liquids like propane and ethane.

Producing the most energy is just one step as America is looking to become a leader in exporting its energy riches across the world. While limited natural gas exports have been approved and oil exports remain banned, it has quietly become the world’s top exporter of propane thanks to Enterprise Products Partners (NYSE: EPD  ) . That title isn’t likely to be ceded anytime soon as competitors like Boardwalk Pipeline Partners (NYSE: BWP  ) and Williams (NYSE: WMB  ) are teaming up to compete with Enterprise Products Partners to export America’s propane riches. That’s just the start as other companies are following close behind as the propane export market heats up.

The next step in energy exports
With so many of its competitors now finally catching on to the profits available in propane exports, Enterprise Products Partners is now choosing to focus on ethane. The company hinted at its Analyst Day earlier this year that it was looking into making ethane its next top export. Now, Enterprise Product Partners has officially announced that it will indeed build an ethane export facility on the Texas Gulf Coast to help address the current market oversupply.

Enterprise Products Partners is planning to build a 240,000-barrels-per-day facility, which would be the largest ethane export facility in the world. Its plan is to have it operational by the third quarter of 2016. The company already has strong interest in the project and could have the facility’s capacity fully contracted out.

The Enterprise Products Partners’ export facility is a timely addition to its portfolio. Currently, U.S. ethane supply exceeds demand by about 300,000 barrels per day. However, that imbalance is expected to widen by 700,000 barrels per day by 2020. That’s even with new ethylene capacity being built in the U.S. to use ethane as a feedstock.

Why this matters
The reason for this oversupply is very simple. The production of natural gas liquids like ethane and propane are expected to surge in the decade ahead as the following slide from a recent Boardwalk Pipeline Partners’ investor presentation shows.

Source: Boardwalk Pipeline Partners investor presentation (link opens a PDF).

This surging NGL production especially in the Marcellus and Utica Shale plays, as that slide noted, is especially important to exports. To address this, Boardwalk Pipeline Partners, along with its partner Williams, is planning to build an NGL pipeline — the Bluegrass Pipeline — from these two shale plays to the Gulf Coast. The main reason is to serve the Gulf Coast petrochemical market with NGL feedstock. However, Boardwalk Pipeline Partners and Williams are also proposing to build the Moss Lake LPG terminal to export NGLs like propane and butane.

Enterprise Products Partners is well aware of this trend in NGL production growth. It is already well ahead of both Boardwalk Pipeline Partners and Williams as it completed its key NGL pipeline from these shale plays to the Gulf Coast — the ATEX Express Pipeline — earlier this year. That pipeline will now enable Enterprise Product Partners to start a new trend as it will provide more than enough fuel to supply the company as it builds the world’s largest ethane export facility.

Investor takeaway
While America debates oil and natural gas exports, Enterprise Products Partners has quietly became the country’s top propane exporter. Now, it’s looking to do the same with ethane. Given the massive supply glut that’s expected and its first-mover advantage, Enterprise Products Partners should make its investors a lot of money as it exports our excess natural gas liquids.

The IRS is quietly fueling energy exports
Record oil and natural gas production is revolutionizing the United States’ energy position. What you probably don’t know is that the IRS is providing a big assist to companies like Enterprise Products Partners and Boardwalk Pipeline Partners to export our excess energy. To learn more about the special tax advantage these companies enjoy as well as how you can profit from it check out our special report “The IRS Is Daring You To Make This Energy Investment.” Don’t miss out on this timely opportunity; click here to access your report — it’s absolutely free.

Fool.com



16 Comments on "Quietly, America Takes 1 More Step to Becoming an Energy Export Superpower"

  1. DC on Mon, 28th Apr 2014 6:06 pm 

    LoL!

  2. rockman on Mon, 28th Apr 2014 7:29 pm 

    “Thanks to shale production, it leads the world in natural gas production”. And yet produces only 93% of the NG it consumes and imports the balance.

    Also:”America is looking to become a leader in exporting its energy riches across the world”. Actually it isn’t exporting “its energy riches”. What we are exporting refined products which essentially come from oil imports for the most part. We are refining someone else’s oil riches and shipping them overseas. Which isn’t the worse thing in the world since we at least get a little bite of the pie.

    We are becoming the outsource refiner for Canada, México, Venezuela and a few others. Doesn’t exactly make you THE global energy leader when you’re still importing your oil and NG requirements. But the really great title we can honestly claim is the global leader in energy consumption. USA! USA! USA!

  3. HARM on Mon, 28th Apr 2014 7:40 pm 

    I thought you had to stop *importing* oil before you could be considered an oil *exporter*. Oh, I’m just being all nit-picky, aren’t I? What’s a few billion barrels between friends?

  4. Plantagenet on Mon, 28th Apr 2014 7:44 pm 

    I’m not surprised that the IRS is helping the US to export oil and NG. Just another example of the Obama administration saying one thing and doing another.

  5. peakyeast on Mon, 28th Apr 2014 8:42 pm 

    According to the curves they exhibit it does not look like the production is in any way accelerating its increase. Actually it looks like a top-point is not far away – and with the top-point passing by so are the wishful dreams.

  6. mo on Tue, 29th Apr 2014 1:05 am 

    By fool.com. how appropriate

  7. Norm on Tue, 29th Apr 2014 6:03 am 

    Republican party principle: If you have to Lie, then Lie Big.

    So…. America is the fossil fuel exporter of the world! The #1 superpower oil producer! Exporting to all the other countries!

    With far-right viewpoints like this… no wonder they had to legalize pot.

  8. rockman on Tue, 29th Apr 2014 1:11 pm 

    Norm – There’s a long list of Democrats also behind the idea. Just as there are a number of D Congress critters demanding that the POTUS approve Keystone. IMHO this is neither a D vs R or a liberal vs conservative matter. It’s a bipartisan collection of fools. LOL.

  9. CAM on Tue, 29th Apr 2014 1:37 pm 

    We consume about 20 million barrels a day and produce between 8-9 according to the EIA. I think a better and more detailed explanation is required!

  10. Perk Earl on Tue, 29th Apr 2014 3:37 pm 

    Just think, the more we import to refine, the more we can export!

  11. Newfie on Tue, 29th Apr 2014 6:23 pm 

    Rolling on the floor laughing my “derriere” off.

  12. Nony on Tue, 29th Apr 2014 9:02 pm 

    Rock, the US is already a net exporter of natural gas liquids (propane and butane and such), which is the topic here, not methane.

    http://www.eia.gov/todayinenergy/detail.cfm?id=11091

  13. Texas Engineer on Thu, 1st May 2014 2:42 pm 

    Nony, are you reading the same article above? I thought this was about America becoming an “Energy Export Superpower”? I saw nothing limiting this to natural gas liquids

  14. Nony on Thu, 1st May 2014 3:41 pm 

    I actually read the text and broke down the parts of it. You seem to have reacted to the title and a couple of vague intro sentences. But I guess if you just want to repeat the same memes over and over again, that will suffice.

    If you actually want to learn and think, you will read more closely. The “1 more step” is NGL net export (propane, etc.). Read all the paragraphs. Look at the figure. The topic of this article IS NGL NET EXPORTS.

    You might want to read up on the EIA projections as well as the analyses at the RBN daily energy blog. Lot of good analysis of the situation including breaking down the differences of propane versus ethane, etc. in terms of transport and supply/demand.

  15. Nony on Thu, 1st May 2014 3:42 pm 

    Oh…and if you want to give the article writers a fair shake, you’ll step back and read more reflectively instead of flying off into your little set patterns.

  16. Nony on Thu, 1st May 2014 3:47 pm 

    You can even be a little eclectic and still be an oil or even an oil and NG naysayer. But if you LEARN something about the NGLs, maybe you know more than you did before. Maybe it even changes your opinion on possibility of US becoming a NG net exporter. After all…how can you say “inconceivable”* for NG projections, when you see the EXAMPLE of NGL just recently crossing that magic number.

    *http://www.youtube.com/watch?v=1-b7RmmMJeo

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