US Oil Exports May Surge Globally
News Article Sponsored by Ross & Yerger Insurance
As previously predicted in these columns, the lifting of the 1974 Nixon Oil Embargo as part of the last December budgetary compromise, is already activating an export surge even earlier than expected.
Already in early January, shipments from Corpus Christi, Texas, bound for Germany’s Bavaria and Marseilles, France by Enterprise Products LP launched what is likely to become a major world market for WTI light sweet crude. This may signal an eventual U.S. market export development estimated to reach two million barrels a day within the latter part of next year.
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In anticipation of this eventuality, Enterprise Product Partners and Plains All American Pipeline have already spent billions of dollars in the past five years in building new pipelines, oil storage tanks, and dock space at ports.
In fact, “Enterprise” had already received permission from the U.S. Energy Agency to ship less than 20% light condensate oil even before the embargo lifting. While the U.S. export potential will require a considerable additional expenditure in pipeline infrastructure and port expansion, this will likely proceed in tandem with work already underway to prepare many “export outlets.” These will formulate and ship liquid natural gas (LNG), already in the developmental stage in Southern Texas and Louisiana.
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What is overhanging this unprecedented oil and natural gas expansion opportunity is the current unexpected drop in world oil prices, which has generated severe cutbacks, both in employees and monumental capital expansion.
While the near-hysterical predictions of oil prices as low as $20 per barrel, or even less, have been predicted by such major financial institutions as Goldman Sachs, a moderate reversal from a $30 bottom makes the future U.S. oil and natural gas export bonanza even more promising for America’s future economic development.
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