by ROCKMAN » Sat 05 Apr 2014, 19:35:05
"Lifting the ban would increase U.S. crude-oil production by about 700,000 barrels a day, raise exports by about 1.5 million barrels a day and push up imports by about 500,000 barrels a day by 2020". Those numbers make no sense to me. I can't even imagine what type of an illogical thought process would even lead to such estimates.
But let's get back to the basics: the US consumers DO NOT BUY OIL. None...nada...zip. They do not compete with the other oil buyers on the planet. The US consumers buy REFINED PRODUCTS. Refined products for which there is no export ban. Refined products the US consumers currently compete for with all the other consumers of refined products on the planet. US oil producers want to export so they can sell for a higher price...if it is actually higher. And has to be high enough to cover the transport cost to just break even.
But guess what: at least 20 million bbls of US production are being exported every year right now even with the so called "ban". But how can that be? Easily done: take a bbl of Eagle Ford Shale production, run it thru a minimal upgrader plant, pump it down one of the two pipelines reversed for just this very reason, load it on a tanker and ship it to a refinery in eastern Canada. And this is happening to at least 50,000 bbls of EFS production every day because once it comes out of the upgrader it's classified as a "product" and not oil. And how much more of these "products" will be exported in the future? A company has just announced their plans to build the largest upgrader in S Texas in the history of the US. And why are producers paying this extra cost? Because those other refineries are capable of producing more valuable product then the Gulf Coast refineries.
The entire discussion about oil exports has nothing to do with US energy independence, punishing Russia or whatever other lame ass rationale expressed. It's about simple business economics. Just like the fact that US consumers compete on the world market today for the liquid hydrocarbons they consume. And will continue to do so whether the oil export ban is lifted or not. And how much refined products do we export: The United State became a net exporter of petroleum products only three years ago, but it is already the world's largest exporter of them. U.S. exports of petroleum products — which include diesel, jet fuel and gasoline, but not crude oil — stands at about 2.9 million barrels per day, up from 2.6 million barrels in 2012 and only 1.3 million gallons in 2007. "The U.S. was the bread basket to the world. Now we're the refiner to the world."
Last edited by
ROCKMAN on Sat 05 Apr 2014, 20:42:46, edited 1 time in total.