Donate Bitcoin

Donate Paypal


PeakOil is You

PeakOil is You

Lifting The US Crude Export Ban

General discussions of the systemic, societal and civilisational effects of depletion.

Re: Lifting The US Crude Export Ban

Unread postby Tanada » Tue 04 Mar 2014, 11:59:27

Pops wrote:
Tanada wrote:This seems hopelessly optimistic to me Pops, if the world market will pay more than the Domestic market then they will export more aka import less until the prices are in tight sync.

I don't think I made a prediction, how can it be hopelessly optimistic? LOL

I was trying to make the point that the spread is only $6, down from $25 - so not much more narrowing is to be had. And in any case, the US & Canada are already employing 2/3 of the rotary rigs in the world and I have no proof but I don't think there will be any surge to employ any more for an additional $6: there are no locations to drill or they would be drilling them already.

Graeme's article ignores that supply is constricted by geology at this price, but not by 6 bucks. To be a little more blunt, I was being pessimistic, $6/bbl doesn't matter. $60 might but I doubt that would lead to an overall increase either, just the opposite.


Fair enough, when I thought you were being optimistic I was wondering how that was possible, after all you introduced me to the Kopits video's that have convinced me the paradigm shift is in full force.
Alfred Tennyson wrote:We are not now that strength which in old days
Moved earth and heaven, that which we are, we are;
One equal temper of heroic hearts,
Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.
User avatar
Tanada
Site Admin
Site Admin
 
Posts: 16580
Joined: Thu 28 Apr 2005, 03:00:00
Location: South West shore Lake Erie, OH, USA

Re: Lifting The US Crude Export Ban

Unread postby Pops » Tue 04 Mar 2014, 12:11:24

Good, there for a minute I was worried I'd eased your mind!

:lol:

Seriously, I wonder how long it will take for folks to realize that with the investments made these last 10 years we should have more than achieved the early century's predictions by EIA/IEA/Yergan/etc for conventional oil flows near 110Mbopd and prices around $30.
The legitimate object of government, is to do for a community of people, whatever they need to have done, but can not do, at all, or can not, so well do, for themselves -- in their separate, and individual capacities.
-- Abraham Lincoln, Fragment on Government (July 1, 1854)
User avatar
Pops
Elite
Elite
 
Posts: 19626
Joined: Sat 03 Apr 2004, 04:00:00
Location: QuikSac for a 6-Pac

Re: Lifting The US Crude Export Ban

Unread postby ROCKMAN » Tue 04 Mar 2014, 13:47:30

Keith - Yes...the refineries control where the products go. Just like the US refineries determine how much product gets exported. Nice to keep the refinery jobs here but that doesn't guarantee we'll get the products. In fact, given the higher value of products it may be more economical to export them then the crude oil. That oil has components much less valuable than gasoline/diesel.
User avatar
ROCKMAN
Expert
Expert
 
Posts: 11343
Joined: Tue 27 May 2008, 03:00:00
Location: TEXAS

Re: Lifting The US Crude Export Ban

Unread postby ROCKMAN » Wed 12 Mar 2014, 13:43:31

I wonder if the refinery lobbyists would also be for taking “time to kind of understand the dynamics of the market" and ban the export of all refined products. Also wonder how one characterizes a country that imports more than 2.5 billion bbls of oil per year as having “abundant U.S. oil supplies”? In the end it’s always easy to follow the “logic”…just follow the money.

From: http://www.downstreamtoday.com/news/art ... a_id=42566

Reuters - Four U.S. oil refiners, trying to counter growing calls to lift the nation's ban on most crude oil exports, have launched the first major lobbying effort to keep abundant U.S. oil supplies from being sold overseas. Rising U.S. shale oil production has opened the door to a possible revision of the decades-old policy restricting most exports of unrefined petroleum. Various groups and lawmakers favoring exports have been fast out of the gate, seizing on a comment by U.S. Energy Secretary Ernest Moniz in December that it might be time to take another look at the law.

Philip Rinaldi, chief executive of Philadelphia Energy Solutions, said the anti-export group Consumers and Refiners United for Domestic Energy, or CRUDE, was formed with the goal of preventing a hasty reversal of policy. Abruptly allowing exports after a few years of rising production, but decades of concerns about energy security, would be "rash," Rinaldi told Reuters on Tuesday. "What's the rush? You've waited 40 years. Why not take time to kind of understand the dynamics of the market," he said.
User avatar
ROCKMAN
Expert
Expert
 
Posts: 11343
Joined: Tue 27 May 2008, 03:00:00
Location: TEXAS

Re: Lifting The US Crude Export Ban

Unread postby Plantagenet » Wed 12 Mar 2014, 13:48:59

US Refiners aren't against the export of US oil. They just don't want to see US crude exported because it would cut into the money they make exporting their refined oil products overseas.

The US currently exports about 4 million barrels per day of gasoline and other refined oil products.
User avatar
Plantagenet
Expert
Expert
 
Posts: 25379
Joined: Mon 09 Apr 2007, 03:00:00
Location: Alaska (its much bigger than Texas).

Re: Lifting The US Crude Export Ban

Unread postby ROCKMAN » Wed 12 Mar 2014, 15:52:40

P - If I can net $3/bbl more selling my oil to a foreign buyer then the refinery in La that buys my Texas oil today is going to have to pay me at least $3/bbl more then they have been. I couldn't care less who I sell my oil to. Nothing personal...just business. LOL.
User avatar
ROCKMAN
Expert
Expert
 
Posts: 11343
Joined: Tue 27 May 2008, 03:00:00
Location: TEXAS

Re: Lifting The US Crude Export Ban

Unread postby Pops » Wed 12 Mar 2014, 17:31:15

It is nothing personal, unfortunately. We live in a global economy and an economy where all that counts is profit. Here is a pretty good article I came across:

One reason companies proceeded with exports and pipeline changes that left propane consumers vulnerable this winter is that producers of many critical commodities—including oil, natural gas, propane, gasoline, diesel, jet fuel and heating oil—are not obliged to distribute those fuels in a way that benefits U.S. consumers. If it's more profitable for companies to sell those products overseas or reconfigure pipelines, then whenever possible, they will do so.

http://www.philly.com/philly/business/U ... IJHGP3e.99

It's a pretty good article. I was going to post it over on the Prepare for Now thread because it points out the big flaw in the theory that "They" will think of something. They don't do things because it is good for their neighbors' welfare, They do it for their own.

The baker doesn't bake bread to keep people from hunger, he bakes to keep himself from hunger!

A person can make an argument that we should left oil be exported in order to keep the sector "healthy" - especially in the face of the recent indications of divestment and dis-investment but we sure shouldn't be confused that American companies will look out for American's interest, that's downright un-American!
The legitimate object of government, is to do for a community of people, whatever they need to have done, but can not do, at all, or can not, so well do, for themselves -- in their separate, and individual capacities.
-- Abraham Lincoln, Fragment on Government (July 1, 1854)
User avatar
Pops
Elite
Elite
 
Posts: 19626
Joined: Sat 03 Apr 2004, 04:00:00
Location: QuikSac for a 6-Pac

Re: Lifting The US Crude Export Ban

Unread postby ROCKMAN » Tue 18 Mar 2014, 08:37:36

Louisiana…the next Crimea?

OK…a silly tease. Probably won’t see Texas, La. or N. Dakota declaring themselves independent countries…at least not anytime soon. LOL. But there’s an interesting dynamic developing that probably won’t begin significantly impacting folks for some years to come...but it is out there already. It has as much to do with the shifting of businesses and population as the intranational distribution of fossil fuel resources. In reality much more of a potential shift has been going on in Texas than La. And not just showing up in statewide energy growth but on the political representation balance sheet in D.C. This is somewhat akin the MADOR concept: Mutually Assured Distribution Of Resources but instead of the China/USA relationship it would focus on the US fossil fuel producing regions vs. the consuming regions. And it goes beyond developing a preferential system for local consumption to including selling/exporting to competitors of our fossil fuel consuming states. Such as the Gulf Coast LNG sales to the UK, NG sales via pipelines to Mexico and Canada, the sale of Eagle Ford production to Canadian refineries. And the sale of refined products back to Mexico which represents 25% of the value of the oil the export to the US as well as the shipment of Canadian oil to the Gulf Coast where it is cracked and the products sold to the highest bidder…domestic or foreign. I especially like the way they use the term “market equilibrium”. A much nicer way of saying: “We have the oil/NG…screw you”. LOL. Here’s the story from Rig Zone that got me thinking: http://www.rigzone.com/news/oil_gas/a/1 ... Gw1mb.dpuf

Louisiana's Gas Supply-Demand Balance: At A Crossroads

“For more than 50 years, Louisiana has stood out as one of North America's leading natural gas producers. Boasting pipeline and storage infrastructure to support widespread production from conventional onshore wells in-state and from neighboring Texas as well as offshore from the Gulf of Mexico, the Bayou State has long been at the crossroads of the United States' natural gas industry. However, a number of factors could transform Louisiana from a key gas supplier to a major demand center. Production from conventional gas fields is declining while relatively new supplies from the Haynesville, Marcellus and other shale gas plays are poised to meet growing demand for gas-fired electricity in the Southeast, power for new petrochemical plants in the state and exports of LNG from new Gulf Coast terminals.

In order to maintain its gas market equilibrium, Louisiana needs to tap new supply sources, concludes the new ICF International, Inc. white paper "How Louisiana Satisfies Growing Southern Gas Market Demand." "The North American natural gas industry must lay the commercial, regulatory and financial foundation to ensure gas supplies are available to meet a growing Gulf Coast gas market," said Greg Hopper, ICF vice president who co-authored the report with ICF analyst Kevin Greene. "This includes continuing to expand upstream investments, reversing pipeline flows from north to south, developing transportation rate structures that are acceptable to a wide range of stakeholders and encouragement of physical and financial products and risk management tools/parties at key locations in the market. These objectives are achievable but the anticipated magnitude and pace of demand growth require an awareness of the challenges and opportunities."
User avatar
ROCKMAN
Expert
Expert
 
Posts: 11343
Joined: Tue 27 May 2008, 03:00:00
Location: TEXAS

Re: Lifting The US Crude Export Ban

Unread postby ROCKMAN » Tue 18 Mar 2014, 12:48:08

pstarr - Absolutely absurd. Not even an opinion but fact. First, above all else, are they talking about us giving the LNG away for free? If not then why not just buy it on the open market. An open market that has 99% of the global LNG available compared to the almost zero amount (compared to the rest of the world) that the US has. And the biggest exporter of LNG is just a short sail from the EU compared to shipping it half way around the world from the US. It seems those folks that offer such possibilities can't do a 30 second web search to pull up the graph that shows in the universe of LNG exports the US is almost non-existent. Will the US be exporting more LNG many years into the future? Maybe but that doesn't help the UE or the Ukraine now.
User avatar
ROCKMAN
Expert
Expert
 
Posts: 11343
Joined: Tue 27 May 2008, 03:00:00
Location: TEXAS

Re: Lifting The US Crude Export Ban

Unread postby Pops » Tue 18 Mar 2014, 12:48:23

We had a hard time keeping the east coast warm this winter and it ain't over yet.

Image
The legitimate object of government, is to do for a community of people, whatever they need to have done, but can not do, at all, or can not, so well do, for themselves -- in their separate, and individual capacities.
-- Abraham Lincoln, Fragment on Government (July 1, 1854)
User avatar
Pops
Elite
Elite
 
Posts: 19626
Joined: Sat 03 Apr 2004, 04:00:00
Location: QuikSac for a 6-Pac

Re: Lifting The US Crude Export Ban

Unread postby ROCKMAN » Tue 18 Mar 2014, 13:38:02

Pops - Now that you mention it maybe we can just ship a lot of propane to our Ukrainian cousins. Can't see a problem with that plan. LOL.
User avatar
ROCKMAN
Expert
Expert
 
Posts: 11343
Joined: Tue 27 May 2008, 03:00:00
Location: TEXAS

Re: Lifting The US Crude Export Ban

Unread postby Pops » Tue 18 Mar 2014, 14:26:09

Wait a minute!

:-D
The legitimate object of government, is to do for a community of people, whatever they need to have done, but can not do, at all, or can not, so well do, for themselves -- in their separate, and individual capacities.
-- Abraham Lincoln, Fragment on Government (July 1, 1854)
User avatar
Pops
Elite
Elite
 
Posts: 19626
Joined: Sat 03 Apr 2004, 04:00:00
Location: QuikSac for a 6-Pac

Re: Lifting The US Crude Export Ban

Unread postby Graeme » Tue 08 Apr 2014, 18:45:33

U.S. approved 52 oil re-export licenses in last 6 months

The U.S. Department of
Commerce approved 52 crude oil re-export licenses in the last
six months to destinations other than Canada, the department
said on Tuesday.
The permits, which were approved between October 2013 and
March, include 14 licenses for re-exports to European countries,
according to data released by the department's Bureau of
Industry and Security.
The United States does not allow exports of its own oil with
few exceptions such as barrels going to Canada or re-exports of
foreign oil from U.S. ports.
Since late February, four licenses were approved for
re-exports to Spain, where traders say Enbridge Inc
plans to send Canadian oil as early as this month.
Last week, Enbridge became the first company to confirm
plans to re-export Canadian oil via the United States, followed
by Valero Energy.
The bureau has also green-lighted three re-export licenses to
the United Kingdom since late February and six licenses for
re-exports to South America, according to documents Reuters
obtained through Freedom of Information Act requests.
Aside from these, the bureau granted two licenses for the
temporary export of U.S. oil through the Panama Canal over the
last six months. That oil is expected to eventually return to
the United States.
A majority of the export licenses approved since October
were for barrels destined for Canada.
The bureau does not provide information on the companies
behind the licenses or the volume of oil destined for
re-exports. The licenses are valid for one year.
The table below lists licenses approved for re-exports
between Oct 1, 2013 and March 31, 2014. Exports to Canada and
Panama are not among the 52 re-export licenses.


reuters
Human history becomes more and more a race between education and catastrophe. H. G. Wells.
Fatih Birol's motto: leave oil before it leaves us.
User avatar
Graeme
Fusion
Fusion
 
Posts: 13258
Joined: Fri 04 Mar 2005, 04:00:00
Location: New Zealand

Re: Lifting The US Crude Export Ban

Unread postby ROCKMAN » Wed 09 Apr 2014, 07:48:03

A quick background: At least 50,000 bbls per day of Eagle Ford Shale production is exported to Canada. This doesn’t violate the US oil export ban: the production is run thru a simple upgrader and reclassified as “refined product” for which there is no ban. The port of Corpus Christi has become a major hub for this activity given that 2 pipelines have been reversed to it from the EFS trend. Additionally since the production is being shipped to a foreign there no requirement to use a US flagged tanker.

Now the rest of the story: Will Texas Ship Crude to California?

From Rig Zone: In September 2013, Texas produced 2.7 million bopd, the highest average of oil output in over 32 years. With this excess crude, Texas might become a supplier of oil to California if the trade is profitable. The Golden State now depends on imports for more than 60 percent of its oil supply. Because of California’s history as an oil producer its refining industry was originally built to process local crudes.

{So the question: why are we sending EFS production to Canada and not CA?}

Until now, a U.S. policy, the Jones Act, made domestic shipping more expensive, as California imported oil from the Middle East, Ecuador and Alaska’s North Slope. If a shortage of qualifying ships can be overcome, Texas crude could become affordable on the West Coast as the highest domestic output creates a surplus of light oil while driving prices down. It always comes down to economics. Traditionally, Alaska had been the source for a huge chunk of California’s resources, and that’s still the case, but if you look at the economics, it’s significantly cheaper, both from the initial price per barrel, as well as transportation costs, to move Canadian Albertan crude or Texas crude. Both Middle Eastern, as well as African imports, are going to erode pretty quickly. When this comes on line, there is no way that Middle Eastern crude can compete both at a per barrel cost, plus knowing that a lot of U.S. is trading at a discount to WTI, plus cheaper transport costs.

{The situation has already significantly hurt Nigerian exports to eastern Canada}

The Jones Act: With the lack of infrastructure from Texas to California, industry players are petitioning the government for a waiver of the Jones Act, a maritime act in place since the 30s, which demands for U.S.-flagged only vessels to transport goods between U.S. ports. This waiver would allow for domestic sweet crude to move economically between ports, displacing foreign sweet imports, while maintaining the crude oil export moratorium for the United States. The primary problem is that with so little oil moving between US ports there have been very few US flagged oil tankers. And most are already tied up in long term contracts.

{So it’s simple: because of a US govt policy to protect an almost non-existent business (domestic oil tanker trade) CA has been buying more expensive oil while we’re sending production to Canada. One might think the CA politicians would have been screaming at the feds to allow an exception. In the last 14 months the feds have allowed over 120 exceptions to the oil export ban. But, given the nature of the CA electorate, maybe those politicians didn’t want to be associated with Texas oil from frac’d wells. So better to have their voters pay more for gasoline. LOL.

And there's even a worse horror for a CA politician get tagged with: the potential to re-export Canadian oil sands production from Texas to CA. Of course, it's already happening with the Canadian production slipping through Washington state to CA but they don't talk about that out loud on the "green" left coast. LOL.
User avatar
ROCKMAN
Expert
Expert
 
Posts: 11343
Joined: Tue 27 May 2008, 03:00:00
Location: TEXAS

Re: Lifting The US Crude Export Ban

Unread postby Synapsid » Wed 09 Apr 2014, 16:44:29

ROCKMAN,

Well I talk about it. Not my fault if nobody listens. We take 44% of Alberta crude out of the TransMountain pipeline for our refineries. Sending the actual crude on to California, though--I'll have to look into that.
Synapsid
Tar Sands
Tar Sands
 
Posts: 780
Joined: Tue 06 Aug 2013, 21:21:50

Re: Lifting The US Crude Export Ban

Unread postby Synapsid » Wed 09 Apr 2014, 17:24:27

ROCKMAN et al.,

There are proposals for export terminals for crude in Washington state that are making heavy weather getting through the permitting processes (lots of opposition), but they're set up for Bakken crude that's being railed in. I haven't seen anything about exporting oil-sands crude, which does come in by pipeline to the refineries in the NW corner of the state.

Can anyone chip in on this?
Synapsid
Tar Sands
Tar Sands
 
Posts: 780
Joined: Tue 06 Aug 2013, 21:21:50

Re: Lifting The US Crude Export Ban

Unread postby ROCKMAN » Thu 10 Apr 2014, 10:55:48

Syn – I’ll have to dig up the stats for Washington state but here’s the latest numbers for CA: Dec 2013 – 700k bbls of Canadian oil railed in and 90k bbls from N Dakota. Total imports: almost 1.2 million bbls per month. Looks like most of the rest comes from Alaska these days. So I suspect with the high price that they are getting in CA little or none of that oil is being exported from anywhere along the west coast.

What’s really interesting is that in January 2013 virtually no oil was being railed into CA from Canada. So zero to 700k bbls in less than 12 months. Do you think the MSM in CA may have avoided putting out stories that the so environmentally conscious state of CA was suddenly importing so much of the “dirtiest oil on the planet”?
User avatar
ROCKMAN
Expert
Expert
 
Posts: 11343
Joined: Tue 27 May 2008, 03:00:00
Location: TEXAS

Re: Lifting The US Crude Export Ban

Unread postby ROCKMAN » Thu 10 Apr 2014, 11:54:50

Some more foolish spin attempt by a Reuter’s reporter this time. The US has not “replaced OPEC as a supplier of oil to the world”. But domestic producers have replaced a good bit of oil supplies coming to the US from the exporters. At least he does seem to understand how the US is becoming the outsourced oil refiner for much of the world: a lot of the oil imported into the US is re-exported out as refined products. BTW: the average fuel efficiency of the EXISTING US auto fleet has improved just 1 mpg in the last 3 to 5 years. New vehicle efficiencies have improved significantly but they are the minority on the road today.

Reuters - The United States has replaced OPEC as the marginal petroleum supplier to the world thanks to the shale revolution and improvements in automotive fuel efficiency. Net U.S. imports of crude and products have halved over the last five years, or by an amount equivalent to the entire daily crude exports of Saudi Arabia…U.S. refiners and traders are successfully arbitraging around the ban by replacing imports of foreign crude with cheaper domestic oil and turning domestic crude that cannot be exported into refined products that can. Total imports of crude and products shrank to an average of 9.8 million barrels per day in 2013 from a peak of 13.7 million in 2005. Over the same period, product exports climbed to 3.6 million barrels per day from 1.1 million. Diesel exports doubled, while exports of gasoline, LPG and petroleum coke all recorded big increases. - See more at: http://www.rigzone.com/news/oil_gas/a/1 ... ejidX.dpuf
User avatar
ROCKMAN
Expert
Expert
 
Posts: 11343
Joined: Tue 27 May 2008, 03:00:00
Location: TEXAS

Re: Lifting The US Crude Export Ban

Unread postby Pops » Thu 10 Apr 2014, 14:52:01

According to the Business Dictionary the "marginal producer" is defined as

"An individual producing company within an industry that is only just making a profit on their products at prevailing market prices. Such an organization may operate on too small a scale to take advantage of economies that benefit larger producers."

Probably more true than not in this case, LOL

Perhaps the reporter is thinking more along the lines of the "producer of last resort" - which is also probably literally true (just not in the unicorny way he's thinking).

Finally, I think he probably wanted to say "Market Stabilizer" in that the US is acting as KSA once did, turning on the taps and turning them off as the market heated and cooled. Although I think here too he's getting the wrong idea - on the optimistic side. More likely everyone is just pumping flat out and there is no stabilizing to be done on the supply side through increasing and decreasing production, the market is now stabilizing on the demand side through decreasing consumption when the price nears the ceiling (maybe $110 Brent) and increasing consumption when it nears maybe $100 on the low side.

The Goldilocks zone I think Gail called it.

What no one wants to accept is it isn't Them in control any more, it's Us.
The legitimate object of government, is to do for a community of people, whatever they need to have done, but can not do, at all, or can not, so well do, for themselves -- in their separate, and individual capacities.
-- Abraham Lincoln, Fragment on Government (July 1, 1854)
User avatar
Pops
Elite
Elite
 
Posts: 19626
Joined: Sat 03 Apr 2004, 04:00:00
Location: QuikSac for a 6-Pac

PreviousNext

Return to Peak Oil Discussion

Who is online

Users browsing this forum: No registered users and 2 guests