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US to launch blitz of gas exports

US to launch blitz of gas exports thumbnail

The United States is poised to flood world markets with once-unthinkable quantities of liquefied natural gas as soon as this year, profoundly changing the geo-politics of global energy and posing a major threat to Russian gas dominance in Europe.

“We anticipate becoming big players, and I think we’ll have a big impact,” said the Ernest Moniz, the US Energy Secretary. “We’re going to influence the whole global LNG market.”

Mr Moniz said four LNG export terminals are under construction and the first wave of shipments may begin before the end of this year or in early 2016 at the latest.

“Certainly in this decade, there’s a good chance that we will be LNG exporters on the scale of Qatar, which is today’s largest LNG exporter,” he said, speaking on the margins of the IHS CERAWeek energy summit in Texas.

Qatar exports just over 100 billion cubic meters (BCM), though Australia is catching up fast as the offshore Gorgon field comes on stream. It may pull ahead of Qatar later this decade.

Mr Moniz said the surge in US output from shale fracking has already transformed the global market. “We would have been importing a lot of LNG by now. Those cargoes would have gone elsewhere and have in fact had a significant impact in the European market,” he said.

Gas frackers assembled at the world’s “energy Davos” in Houston said exports could ultimately be much higher, potentially overtaking Russia as the world’s biggest supplier of natural gas of all kinds.

“We’re just fifteen years into a 150-year process,” said Steve Mueller, head of Southwestern Energy, the fourth biggest producer of gas in the US .

The mile-deep Marcellus basin stretching from West Virginia through Pennsylvania to New York state is driving the explosive growth. Interlocking fractures in the rock make it possible for a single well with advanced technology to extract much more gas than thought possible just five years ago.

Once thought to be in decline, the Marcellus alone produces 113 BCM a year. This is roughly equivalent to Russia’s exports to Europe through the Nord Stream, Yamal, and Brotherhood pipelines.

Mr Mueller defiantly sweeps aside those who claim that the US fracking industry is in serious trouble, insisting that drilling costs are coming down so fast that his company – and others – are staying a step ahead of falling prices.

“Rig efficiency was flat for thirty years but since then we’ve cut by five times. We have set in motion something that you can’t deny and is irresistible,” he said.

Mr Mueller said it had taken his company 17 days to drill a 2,600 ft well as recently as 2007. It has just drilled a 5,400 ft well in six days. “The new technology is amazing. We have a drill-bit with a chip inside that makes its own changes,” he said.

He is continuing to invest heavily and hopes to boost output by up to 10pc annually for the next three years, despite a drop in gas prices to around $2.60 per million British thermal units (BTU). “If it stays around $3, we’ll be fine,” he said.

The US Energy Information Administration (EIA) expects gas prices to rise to $4.88 in real terms by 2020, and $7.85 by 2040.

What is remarkable is that US drillers can produce a third more natural gas today with 280 rigs than they did in 2009 with 1,200 rigs. Total shale output has soared to over 350 BCM from almost nothing a decade ago. It now makes up half of US gas production.

The Obama administration has so far been slow to approve new export terminals for LNG, partly because of concerns that the US would lose its massive advantage in energy and feedstock costs for industry.

Gas sells at for $7 in Europe, and over $10 in North-East Asia, four times more expensive. This cost-gap has been a key driver behind America’s so-called “manufacturing renaissance”, stoking an investment boom in chemicals, plastics, and glass, and saving the country’s steel mills from slow death.

A corridor from Houston to New Orleans has attracted 33 petrochemical plants worth over $1bn each since 2011. The American Chemistry Council expects over $130 billion of industrial projects along this stretch by 2023.

The administration has concluded that the US lead is now so entrenched that there is little to lose from a partial levelling of the global playing field. The expense of freezing gas for liquefaction to minus 260 degrees Fahrenheit and shipping it across the Atlantic or Pacific in molybdenum-hulled vessels is enough to maintain a big cost advantage for US manufacturers.

Four LNG terminals with a combined export capacity of 70 BCM are likely to be approved soon by the Energy Department. The front-runner is Cherniere’s $18bn terminal at Sabine Pass in Louisiana.

Experts are split over whether North America really can become the world’s dominant LNG player. Moody’s warned earlier this month that most of the 30 gas liquefaction projects planned in the US and Canada will never get off the ground, chiefly due to the linkage between LNG contracts and the price of crude. “The drop in international oil prices has wiped out the price advantage US LNG projects,” it said.

Michael Smith, head of Freeport LNG, said his company will press ahead regardless with plans for a $13bn plant near Houston, and predicted that the US could soon leap-frog all rivals to become the new gas hegemon. “Our projects are very competitive and we will continue to have an advantage over the rest of the world,” he said.

Russian president Vladimir Putin warned at the St Petersburg economic summit last year that US shale gas was abruptly changing the international order, with serious implications for his country. The early effects have forced down global LNG prices, creating a rival source of gas supply in Europe.

Any future American cargoes would further erode Gazprom’s pricing power in Europe, and erode the Kremlin’s political leverage. The EU already has a large network of import terminals for LNG.

Lithuania has just finished its “Independence” terminal, opening up the Baltic states to LNG. Poland’s new terminal should be ready this year.

America’s parallel drive for shale oil is equally breath-taking. Scott Sheffield, head of Pioneer Natural Resources, said his company has discovered huge reserves in the vast Permian Basin of West Texas.

“We think the Permian could produce 5-6m barrels a day (b/d) in the long-term,” he said. It is a staggering claim. This would be more than Saudi Arabia’s giant Ghawar field, the biggest in the world.

Ryan Lance, head of ConocoPhillips, said North American oil output could reach 15m b/d by 2020 and 25m b/d over the next quarter century, three times Saudi Arabia’s current exports.

A vault forward on this scale would establish the US as the leading energy superpower in both oil and gas, a revival that almost nobody could have imagined seven years ago when the United States was in near panic over its exorbitant dependency of imported fuel. It would restore the US to its mid-20th Century position as a surplus trading nation, and perhaps ultimately as world’s biggest external creditor once again.

Fracking is still an almost exclusive preserve of North America, and is likely to remain so into the early 2020s. China has large ambitions but the volumes are still tiny, and there is a shortage of water in key areas. Fracking remains mere talk in most other regions of the world.

Lukoil analysts say Russian extraction costs for shale are four times higher that those of US wildcat drillers. Sanctions currently prevent the Russians importing the know-how and technology to tap its vast Bazhenov basin at a viable cost.

John Hess, the founder of Hess Corporation, said it takes a unique confluence of circumstances to pull off a fracking revolution: landowner rights over sub-soil minerals, a pipeline infrastructure, the right taxes and regulations, and good rock. “We haven’t seen those stars align yet,” he said.

Above all it requires the acquiescence of the people. “It takes a thousand trucks going in and out to launch a (drilling) spud. Not every neighbourhood wants that,” he said.

Certainly not in Sussex, Burgundy, or Bavaria.

Telegraph



71 Comments on "US to launch blitz of gas exports"

  1. viewcrafters on Mon, 27th Apr 2015 7:21 am 

    There goes that 100 years of gas.
    Anything to raise the price.
    viewcrafters

  2. steve on Mon, 27th Apr 2015 7:41 am 

    The markets must be getting scared again…que the “we have so much energy that we will never run out articles!”

  3. The skeptic on Mon, 27th Apr 2015 9:00 am 

    Ahh…. remember the good of days of eco-faithful chanting “peak oil” by 2010 or 2020? The latest “peak oil” is oil production will now peak after 2050… and no one will predict the volume.

  4. Dredd on Mon, 27th Apr 2015 9:49 am 

    It is part of the new plan to limit overpopulation (FERC Plan To Limit Overpopulation?).

  5. Nony on Mon, 27th Apr 2015 9:56 am 

    Natgas is at 2.45 this morning. So much for Art Berman and the other shale deniers who claimed back in 2009, that it wasn’t sustainable and needed 8+ to be profitable. And that’s WITH demand growing–volume up 50% in the last 6 years.

    Just wait until we get more takeaway built out of the Marcellus. Prices are flirting with 1$ in PA.

    http://www.naturalgasintel.com/data/data_products/bidweek?region_id=northeast&location_id=NEALEIDYT?region_id=northeast&location_id=NEALEIDYT

    Shale already kicked Rock’s ass out of the shallow Gulf. The mighty, mighty Marcellus and her younger brother the Utica are coming atcha!

  6. Davy on Mon, 27th Apr 2015 10:10 am 

    NOo, you are smarter than me on these things. Can you tell me what will happen hypothetically to you mighty shale gas complex if both short term and long term rates go up and market liquidity dries up from any of a number of issues of confidence. Please educate me boy wonder.

  7. Lawfish1964 on Mon, 27th Apr 2015 10:33 am 

    Our great grandchildren are going to hate our guts. OK, we get it that you just had to have 4 cars in a 4 car family and burn 91,000,000 barrels of oil every day, but then you took a temporary surplus of natural gas and started selling it outside of this country, instead of saving it for the future? Great. Thanks a lot.

  8. rockman on Mon, 27th Apr 2015 10:45 am 

    I have to tell you gang how very disappointed I am with you. Yes: rig efficiency is up, the Marcellus does make some profit and yes: “Total shale output…now makes up half of US gas production.” And most of that increases has come from the Marcellus increasing from just 2% to almost 20% of total US production. But at last count the decline of that previous surge is kicking in so last year there was an insignificant increase in net production according to the stats from the EIA. BTW just how much new associated NG production do we expect those mothballed 800 rigs that HAD BEEN DRILLING the Eagle Ford Shale and the Bakken to add to US production? A gold star to anyone who answered NOT ONE F*CKING BTU. LOL. A maybe some new LNG exports terminals eventually come into service. Good news for those companies exporting NG that had been previously consumed by our citizens. After all, it ain’t personal…just business. LOL.

    And along with all the great advancement is US NG development in recent years the country is STILL A NET IMPORTER OF BOTH NG AND LNG, again according to the almighty EIA this article likes to sight. Not by much but we’re still produce less NG then we consume. How many f*cking times do I have to point that out before it sinks in? If the US exports more NG then it currently does it will resources taken away from some US consumers.

    Maybe eventually the US might have excess NG to export. But it doesn’t today and, according the EIA, it won’t have when Mr Moniz says “the first wave of shipments may begin before the end of this year or in early 2016 at the latest.”.

    So again, other the benefiting the Rockman and other US NG producers, exactly how is exporting more NG going to benefit US consumers who may be outbid for the resource they need to heat their homes and run their businesses.

    I really am very disappointed in our merry band here.

  9. Plantagenet on Mon, 27th Apr 2015 11:11 am 

    Rickman makes excellent points, as per usual. Nonetheless, the NG export facilities are being completed and the Obama administration is pushing exports of US NG.

  10. Davy on Mon, 27th Apr 2015 11:29 am 

    Let’s see how much gets exported after a year with a wild summer then cruel winter IOW climate instability. This is all short term market making and wrapping up previous investments. The future of huge energy investments are numbered as demand destruction kicks in. At that point of the bumpy descent excess supply will negate the need for more investments or just not be available per a contracted financial system.

    These articals assume a BAU growth small or average. None acknowledge contraction and or collapse. More BAUtopian delusions in a status quo of hopium. Progress is here to stay and our technology is exceptional per the BAUtolians. Per our great Planter “technology is getting cheaper and better all the time. That folks is some good planter mojo!

  11. rockman on Mon, 27th Apr 2015 11:49 am 

    More details on the Marcellus: tremendous increase since 2005: 2 bcf/day to 16 bcf/day. Or almost a rate increase of 3 bcf/year. But the latest number from the EIA: net increase of only 0.17 bcf/month or about half the growth rate it had been doing. Still not shabby but the boom is leveling off. But not because the new Marcellus wells aren’t doing great (they are) but the decline of the previously drilled wells (which established that huge growth rate) is now kicking in. IOW thanks to fracture production that pushed the production rate up so fast it’s now driving the production of those earlier wells down very fast. The Marcellus appears to be on track to begin running a footrace with the Red Queen sooner then many realize. Which it will probably do a good job of for a while IMHO. But just like every other hydrocarbon trend it will eventually go into terminal decline. But for now we aren’t at PMNG (Peak Marcellus NG) but we will be in time. OTOH if the US does become a significant LNG exporter in the near future US consumers may be very close to PMNGC…Peak Marcellus Natural Gas Consumption.

    USA! USA! USA! Oh, wait a second… that actually wouldn’t be a good turn of events for the country. But the Rockman and other producers will be very grateful for the sacrifices US consumers will be making. LOL.

  12. Davy on Mon, 27th Apr 2015 12:08 pm 

    Owwee NOo! PMNGC, yea those are fighting words for the NOo. Good comment Rock and I can’t wait to hear what the NOo has to say about it.

    The boy wonder is most likely having a latte or an early cocktail by the beach. He will check in soon to cheerleader the shales and bash and trash the peakers. What a life the boy wonder lives.

  13. rockman on Mon, 27th Apr 2015 12:18 pm 

    Davy – “Let’s see how much gets exported after a year with a wild summer then cruel winter IOW climate instability.” FYI: in 2014 the US exported 1.5 TRILLION CUBIC FEET of NG via pipelines and just 16 bcf via LNG. Probably a safe bet pipeline exports won’t decline since that transport cost is insignificant to the LNG transport cost.

    And if curious: the average price of US NG pipeline exports in 2014 was $5.40/mcf (about 2X the domestic price) with LNG exports selling for $15.66/mcf. Which makes one wonder about the claim from the article: “Gas sells at for $7 in Europe, and over $10 in North-East Asia, four times more expensive”. That’s 4X more then domestic NG prices but significantly less than the price of US LNG exports in 2014. Of course the problem for those 2014 importers of US LNG are stuck since they signed long term GUARENTEED PRICE contracts. Which makes one wonder how much those importers will be willing to pay for LNG from those new US LNG export facilities.

    BTW (ignoring security issues) the EU pays significant less for Russian pipeline NG. Which is why, despite the security issue, the EU still clings to Russian NG.

  14. Baptised on Mon, 27th Apr 2015 12:31 pm 

    Just give us your money and we will give you more back later. I promise this time.

  15. dubya on Mon, 27th Apr 2015 3:28 pm 

    This is an excellent philosophy, as we have seen in Britain’s leadership in selling the North Sea production off at $10/bbl and buying it back at $100/bbl.

    This is American Free Market Capitalism in action – the ‘consumers’ pay the corporations importing it now; pay exporting it soon and pay importing it later.

    I suppose if the American citizens had control of their resources for their own use that would be called Communism.

  16. Nony on Mon, 27th Apr 2015 3:40 pm 

    Davy: presumably the conditions you describe would coincide with a recession, which would reduce demand. This would drop price and lessen the rate of increase of volume (possibly to negative if the recession hit hard enough).

    But that’s not much different from other businesses that are affected by recessions. Disposable income items like RVs and boats get hit much harder (and bounce back much harder). Energy is more recession proof, but not perfectly so. Food is near recession proof and cobblers and auto repair actually perform better in recessions.

  17. Nony on Mon, 27th Apr 2015 3:43 pm 

    Lawfish: that natural gas belongs to the land owners. They should be able to sell it to market, just like anything else. how would you like it if you owned something and I told you could not sell it to the highest bidder.

    In addition, we have a vast amount of NG, our prices are low on the world market. Free trade means we sell what we are good at (e.g. natural gas) and buy what others are good at (plastic crap from China at Wal-Mart). 😉

  18. Go Speed Racer. on Mon, 27th Apr 2015 3:50 pm 

    Sell an export the resources, leave the locals to choke on fumes and toxins and poisoned water. Guess the once proud Americans get to learn what its like to be third world. Gubbamint by the corporations, for the corporations.

  19. Nony on Mon, 27th Apr 2015 4:19 pm 

    Rockman,

    1. You STILL haven’t admitted messing up a monthly change in the Marcellus and calling it an annual one, a couple weeks ago. How can we even debate interpretation when you mess up basic facts and refuse to admit it.

    2. Of course, we have (small) net imports right now. We are connected to Canada and neither of us has LNG export terminals. The amount has dropped considerably and is a small percentage now. Within a year of starting LNG exports, we will become a net exporter. It’s always amazed me that you were so stupid as to not understand this. That you somehow think we can magically become a net exporter (or need to) on the NA continent alone before building LNG terminals for cross ocean.

    3. The Marcellus (and US shale overall) had LARGE increases last year. Any slowing that is going on is in 2015, not “last year”.

    4. The issue with the Marcellus/Utica is take-away, not “Red Queen” or ‘running out of sweet spot’. The Marcellus has been finding market by basically displacing Rocky Mountain, Canadian, and Gulf Coast natural gas that was coming into the NE previously. At this point, for it to continue to grow, it needs new pipelines and/or flow reversals. Note that natgas is selling for 1.20 at Leidy hub in the Marcellus. That’s not a field that is “running out of new gas”.

    [All of this stuff has been well written about. You just need to read more widely. More Rock getting humble and learning. Less Rock getting pompous and getting all high on himself because some Internet peakers kiss his butt.]

    P.s. I think you made some “if” comment about LNG facilities getting built. Well…they won’t all get built. For one thing, it’s devilish hard to get the FED permits and the ones who did it early have an advantage. For another, we don’t need ALL the projects. However, Sabine Pass is not theoretical. The steel is mostly in the ground. The first train will be done by the end of the year. Look at the pictures…see the heavy metal. That’s not a promoter, not a PowerPoint. That’s money spent and construction more than half complete:

    http://www.lngglobal.com/latest/sabine-pass-liquefaction-project-progress-report-for-march-2015.html

  20. Nony on Mon, 27th Apr 2015 4:51 pm 

    Marcellus increased about 16% (~2.8 bcf/d/year) in the past 12 months. That’s not “slow over the last year”.

    http://marketrealist.com/2015/04/marcellus-natural-gas-production-16-5-higher-year-ago/

    [That’s wet gas; dry gas delta is about 2.5 bcf/d]

  21. Nony on Mon, 27th Apr 2015 5:00 pm 

    Us natural gas production overall was up 5% in 2014 versus 2013. so much for Rock saying it stalled out last year.

    http://www.eia.gov/dnav/ng/hist/n9070us2a.htm

  22. marmico on Mon, 27th Apr 2015 5:45 pm 

    At $60 Brent-linked, U.S. LNG exports (assuming $2.50 Henry Hub price at the Gulf Coast liquefaction facility) to Asia are not economic. Australia & Qatar will destroy the U.S. in Asian markets. Europe would be profitable with $1.25 Marcellus/Utica price at the Chesapeake Bay facility.

    World LNG Prices

  23. Nony on Mon, 27th Apr 2015 5:54 pm 

    Dominion Cove progress report:

    http://www.lngglobal.com/latest/dominion-cove-point-liquefaction-project-monthly-status-and-progress-report-for-march-2015.html

    Not as far along, but not a paper project either. Detailed engineering (not just conceptual designs) more han half done. And some civil work being done.

  24. Nony on Mon, 27th Apr 2015 5:59 pm 

    Can’t find a progress report for Cameron, but it is under construction:

    http://cameronlng.com/project-timeline.html

  25. Nony on Mon, 27th Apr 2015 6:03 pm 

    http://www.freeportlng.com/Project_Status.asp

    Not a paper project either. Construction started in NOV.

  26. dissident on Mon, 27th Apr 2015 6:47 pm 

    Stop yapping about it, just do it already! But you will have to export 165 billion cubic meters to the EU per year. Make sure you leave some for your own use. LOL.

  27. GregT on Mon, 27th Apr 2015 7:11 pm 

    The US is a net importer of Natural gas. All of this mindless drivel is nothing more than noise.

  28. Davy on Mon, 27th Apr 2015 7:52 pm 

    The corns are talkative tonight. What’s up with you guys spring time got you chipper?

    You corns like to look at things from a sterile numbers point of view without the contextual. Life is more like a painting than a graph. There are serious issues with the economy, commodities, and the system itself that you boys dismiss as not relevant. I have rarely if ever got a peep out of either of you that there are storm clouds on the horizon, nothing.

    I don’t look forward to a crisis other than following the how the corns react. It will be interesting to see what you guys do or don’t do. Will you even be here or if here what will you say? Will you be a silver tongue pompous ass or humbled.

  29. Nony on Mon, 27th Apr 2015 9:35 pm 

    dissident: there’s a lot more than talk going on. Just open up one of the progress reports for Sabine Pass and look at the scale of the machinery. These are $5-15 billion projects that take several years and involve all kinds of permitting. They are massive undertakings. Massive installations. A lot more than a rig or a well or even a terminal. Maybe on the scale of large deepsea platforms.

  30. Nony on Mon, 27th Apr 2015 9:38 pm 

    gregT:

    Uh…no. As soon as these projects start shipping, then the tiny amount of net imports will shift to net exports. Natgas is night and day from oil. We import a very small percentage (about 3 bcf/d on volume of 70 bcf/d). That percentage has been consistently going down. Mostly by cramming natgas back up Canada’s butt (to their distress). As soon as the third major train goes on line, we will become a net exporter.

    http://www.eia.gov/dnav/ng/hist/n9180us1A.htm

  31. Nony on Mon, 27th Apr 2015 9:43 pm 

    Davy,

    Just because we talk about numbers and facts doesn’t mean that that is the only thing. Yes, the world and our lives have many other concerns. Facts and ideas enrich us rather than distract us.

  32. GregT on Mon, 27th Apr 2015 10:08 pm 

    Lawfish hit the nail on the head.

    “Our great grandchildren are going to hate our guts.”

    The Nony’s of this world are willing to do anything to turn a profit, up to and probably including a global mass extinction event. Not only are these people fools, they lack moral integrity.

  33. Davy on Mon, 27th Apr 2015 10:20 pm 

    NOo, tell me something doomish. I just want to see if you can. I mean really doomish not something that jives with your playfulness.

    Greg, nailed it by saying that you are all about turning a profit. If a profit can be turned then no problems. Our kids are going to look back on the profit motive attitude with hatred someday like Law mentioned.

  34. Apneaman on Tue, 28th Apr 2015 2:55 am 

    blitz
    blits/
    noun
    noun: blitz; plural noun: blitzes

    1.
    an intensive or sudden military attack.
    synonyms: bombardment, bombing, onslaught, barrage; More
    attack, assault, raid, strike, blitzkrieg
    “the 1940 blitz on London”
    the German air raids on Britain in 1940–41.
    singular proper noun: Blitz; noun: the Blitz
    2.
    informal
    a sudden, energetic, and concerted effort, typically on a specific task.
    “a major press blitz”
    Football
    a charge of the passer by the defensive linebackers just after the ball is snapped.
    3.
    a form of chess in which moves must be made at very short intervals.

    verb
    verb: blitz; 3rd person present: blitzes; past tense: blitzed; past participle: blitzed; gerund or present participle: blitzing

    1.
    attack or damage (a place or building) in a blitz.
    “news came that Rotterdam had been blitzed”
    2.
    Football
    attack (the passer) in a blitz.

  35. rockman on Tue, 28th Apr 2015 3:10 am 

    “I suppose if the American citizens had control of their resources for their own use that would be called Communism.” Curious statement IMHO. Who determines if the vast majority of onshore mineral rights are leased and produced? Actually it’s the citizens that own them. Who determines if fossil fuels on federal lands are produced: the federal politicians who are elected by the citizens. And lets not forget that (despite the laughable claim that oil exports are banned) those same elected politicians permit oil exports it not only allows but encourage the export of the equivalent of 1+ BILLION BBLS of oil as refined products.

  36. Nony on Tue, 28th Apr 2015 5:21 am 

    Continued moronic statement. Try selling a cargo of EF to China, Germany, UK, etc. The Feds will show up and put you in jail. Sales are only allowed to Canada (which has limited Atlantic refining capacity for light oil).

    The ban is on CRUDE, not refined products. This means US consumers get nothing, E&P companies and landowners get shafted and US refiners make out like bandits.

    If you really don’t think there is an oil ban (in contrast to how every analyst and oil trader and oil buyer thinks of the market), then WHY ARE WTI AND BRENT so far apart in $$$$$?

    Sheesh: when you do things like this it amazes me. Rockdoc has called you for some real boners in the past (talking out your ass on shale, when you have minimal experience there or technical knowledge).

    P.s. you STILL have not admitted that you confused monthly change in the Marcellus with annual. Rather affects the analysis, no?

  37. beammeup on Tue, 28th Apr 2015 1:52 pm 

    Nony, I actually agree with many of the points you make on this site, and appreciate reading counter points to group think, but give it rest already on your constant harping on about a simple mistake (annual vs monthly). You’ve made your point; move on already.

    To Nony and everyone else: Using personal insults to make your point doesn’t lend one ounce of credibility to your posts. Quite the opposite in fact. Where are the mods on this site?

  38. Nony on Tue, 28th Apr 2015 2:17 pm 

    Beam: I’m not riding him for the mistake. My issue is the failure to admit it. Gotta keep hammering it then.

  39. Nony on Tue, 28th Apr 2015 2:20 pm 

    Besides…I kept my cool when RockPUD called me an idiot on the Texas RRC peak numbers, when he later learned I was right and he was wrong (about the production reporting delays). But he couldn’t even man up and come back and admit he was wrong. there’s a pattern there.

  40. rockman on Tue, 28th Apr 2015 2:25 pm 

    “The ban is on CRUDE”. According to the EIA last January the US was exporting CRUDE at the rate of 179 MILLION BBLS PER YEAR. Which obviously means Nony is full of sh*t. LOL. And you don’t have to take the Rockman’s word for it. The EIA link is at the bottom of this post. You may also notice this latest US CRUDE EXPORT rate is down a bit from 183 MILLION BBLS OF CRUDE per year last November.

    “Continued moronic statement. Try selling a cargo of EF to China, Germany, UK, etc. The Feds will show up and put you in jail. Sales are only allowed to Canada (which has limited Atlantic refining capacity for light oil).” Speaking of statements easily proven to be moronic: according to Reuters last Oct: “An oil tanker left Valdez on Friday with a crude oil shipment bound not for the West Coast of the United States but for South Korea according to Genscape, which operates a vessel tracking business providing market information to traders. Genscape said the Polar Discovery, owned by ConocoPhillips, is expected to arrive Oct. 10 at Yeosu, the home of the fourth largest refinery in the world.”

    And if that isn’t enough proof of the stupidity of arguing that only Canada receives US exported oil here’s a list of 12 other countries IN ADDITION TO CANADA that import US oil:

    http://www.businessinsider.com/us-oil-export-destinations-2013-10

    Notice Mexico imports as much oil as Canada.

    http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=mcrexus2&f=m

    Almost forgot: And lastly one more statement showing a complete lack of understanding of the US oil patch: “The ban is on CRUDE, not refined products. This means US consumers get nothing, E&P companies and landowners get shafted…”. So us producers and landowners would be getting paid more for our oil if US refiners WEREN’T buying an extra 1 BILLION BBLS OF OIL per year to crack and ship those products overseas??? IOW if there were an extra 1 BILLION BBLS per year in the US market with no buyers the price paid to us WOULD BE HIGHER??? I’m pretty sure that would rate an F in an Econ 101 class. LOL.

  41. Davy on Tue, 28th Apr 2015 2:39 pm 

    Beamer, no mods here on PO. You can go to the structured side for civilized discussion. I disagree with you on personal insults issues. We have a clash of ideas here and we are human. Some people are just uptight and others resilient. I am open to a moderator but we are doing fine now as is. I am working to moderate my attacks on the Makster. I have asked for him to lighten up with his attacks on me. He has shown no interest in being friends so we continue a fued. Besides Beamer, are you going to define personal insults? That is a broad category.

  42. Nony on Tue, 28th Apr 2015 2:48 pm 

    Rock:

    WHY DO YOU THINK there is a BRENT-WTI SPREAD?

    Try shipping a cargo to the UK or Germany or China of EF. You are NOT free to do so. There is a LAW preventing you.

    Yes, there are some little exceptions (Canada, Mexico, 1(!) cargo to SK, and Cali/AK exports). These are NOT enough to allow a free market. The spread exists. That is the MARKET telling you the ban has an impact.

    WHO THE EFF CARES if we shipping mill-yuns of barrels. It is less than 5% production. It is not significant. It IS A BAN.

    And you still have not admitted you screwed up the Marcellus year/month. What is your problem? stop puffing yourself up as “the Rockman” and start learning. You are a JOKE!

  43. Nony on Tue, 28th Apr 2015 2:54 pm 

    You sure as HELL would get more for your products if you could ship WTI to the world markets. You would get something between the Brent and WTI price. There is a SPREAD. Go get a subcriptions to Platt’s and look at crude cargo pricing.

    Please, please, tell me that you have nothing to do with marketing or trading crude. You don’t know the most basic concepts.

    Use your head. stopping the crude ban (and there IS A LAW) would not prevent sales of gasoline. And sales of gasoline benefit the refiners. they are sold on the free traded world market. Crude is locked in. Refiners pick up the crack spread. Have you ever even worked at a refinery? Bought a cargo?

  44. Nony on Tue, 28th Apr 2015 2:56 pm 

    And you STILL haven’t admitted that you confused a monthly change with annual when reading the EIA DPR. Sheesh.

  45. Nony on Tue, 28th Apr 2015 3:20 pm 

    You are off in lala land if you don’t think there is a ban on crude except under tightly controlled exceptions.

    http://www.cfr.org/oil/case-allowing-us-crude-oil-exports/p31005

  46. Nony on Tue, 28th Apr 2015 3:20 pm 

    Read this:

    http://www.eia.gov/conference/2014/pdf/presentations/bordoff.pdf

    Pay attention to the part on cokers…

  47. Nony on Tue, 28th Apr 2015 3:22 pm 

    “Currently, crude oil can be exported to Canada, but only for use there, not for re-export; from Alaska if it comes through the Trans-Alaska pipeline or from Cook Inlet; if it is foreign oil; if it is in conjunction with operation of the Strategic Petroleum Reserve, and for a few other small exceptions. Refined products, however, can be exported without restriction.”

    http://www.rff.org/RFF/Documents/RFF-IB-14-03-REV.pdf

    That is a LAW, Rock. You may not sell an EF cargo to Germany. They will crush you if you do.

    And please spare me with the mill-yuns remarks. Calculate it as a percentage, dude. Or better yet, look at the SPREAD with WTI and Brent. The $$ show an impact!

  48. Nony on Tue, 28th Apr 2015 3:27 pm 

    “Given that U.S. crude oil imports currently total 7.4 million b/d, one might ask why there is a push to export any oil. That is, why don’t we simply use new production of crude in U.S. refineries and thereby further reduce our reliance on crude oil imports?
    The reason for allowing exports is primarily that not all oil is the same. Most of the increased production in recent years has been in the form of lighter (“sweet”) crude oil. Unfortunately, this type of oil is not well-suited for U.S. refineries. U.S. refiners have invested over $85 billion in the last 25 years to reconfigure their plants so that they can efficiently process heavier crude oil slates because this oil sells at a discount and has been increasingly available to U.S. refineries. Much of this heavy oil originates in Canada, Mexico, and Venezuela. These refineries can process lighter slates of crude oil, but given the way they have been configured, their efficiency, in terms of the yields of petroleum products like kerosene, light diesel oil, heating oil, and heavy diesel oil would fall.6”

    http://www.aspeninstitute.org/sites/default/files/content/upload/FINAL_Lifting_Crude_Oil_Export_Ban_0.pdf

  49. zoidberg on Tue, 28th Apr 2015 5:18 pm 

    Good number and analysis. Even if theres mistakes I love forums for info better than any news site I can find because you guys post links for me :).

    still I don’t understand why only NA is pursuing fracking while others ignore it. what would the number one reason be?

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