[ROCKMAN]

OK: the budget deal has just passed and the POTUS will sign it. It also includes some language I've yet to see that removes the US oil export "ban". This is being reported as a win for R negotiators. So let's ignore the fact that there wasn't an effective ban to cancel. Exactly how could this be considered a win for the R's? Especially in a presidential election cycle. Obviously it will be perceived as a push for higher oil prices by the great majority of the voting public and a gift to the much hated oil patch. A point the US oil refinery industry will go out its way to advertise since they've been arguing against lifting the "ban" from the start. The only folks that might reward the R's is the oil patch COMPANIES...not so much from the generally conservative oil patch workers. So what: we were going to vote for Hillary if the R's didn't get the "ban" removed? lol.

This new budget gives the D's a huge new talking point between now and the POTUS election: "The R's have succeeded in causing energy costs to increase for the American people". Even though that probably won't happen IMHO. But what oil prices do increase for other reasons between now and the election? And the R's can't even deny it because increasing the price for US oil producers was the main argument they used. Of course the D's gave in to the R negotiators over the "ban"...it's big win for the D's no matter how you cut it. I honestly don't understand the R motive in this matter: so what if they get some more contributions from the oil companies...they may have just lost millions of the moderate on-the-fence voters.

[Pops]

Could be that the renewable subsidies have a bigger effect than the ban for now...

$this->bbcode_second_pass_quote('', 'T')his small part of a huge spending package has gone almost unnoticed by the general public. Most of the attention in the American media focused on how passage again narrowly prevented a government shutdown and on the rare bipartisan support the measure received in a sharply divided Congress. The total $1.15 trillion bill still awaits full congressional approval, as well as President Obama’s signature.

The subsidy part of the package, approved by Congress on Dec. 15, lets solar power companies to continue taking advantage of tax credits at 30 percent of the price of a solar panel system, whether it’s a modest home solar kit or a huge commercial solar farm. The credit now will last through 2019, then will shrink gradually to 10 percent by 2022.

[vtsnowedin]

Lets see now, We produce 9 million a day and consume 19 million a day so are importing 4 million a day from friends and 6 million a day from enemies. So if we sell a million a day who do we buy the extra million from to get back to 19?
I suppose there are some deals where you can sell it on one coast and buy it on the other from another source cheaper then you can ship it cross country but I wouldn't think that would net out to much.
I don't think the ban accomplished much one way or the other but can't figure out why the GOP wants getting rid of it now on their record.

[Pops]

I think it is about what we are producing. We are oversupplied with light and very light oil after the refiners spent big to refit for heavy and very heavy. That's my thought anyway.

The political reasoning is so they can say they are for oil and the dems can say they are for renewables.

[Tanada]

Oil transport companies are lining up to cash in on exported USA crude. More at link below quote.

$this->bbcode_second_pass_quote('', 'U').S. crude oil exports will change the oil and tanker market said Poten & Partners in its latest weekly report. According to Poten, the potential for U.S. crude exports is a big deal and within a few days many articles and opinion pieces have come out to explain what this means for oil prices, refining margins, the WTI/Brent spread and many other factors.

For the time being, most analysts diverge towards the notion that the impact of the lifting of the ban on oil markets, will be of limited importance, at least in the short-term. This is because, the world oil glut is more than evident at the moment, while also, the currently narrow WTI-Brent spread, renders U.S. crudes uncompetitive in the export market. However, what about the medium to long-term impact to the market?

In its report, Poten raised the question of who will be the most likely importers of U.S. crude, when or even if, the spreads support exports at some point in the future? According to Poten, “that will depend on a number of factors. First of all: export infrastructure. In the short-term, only ports in the U.S. Gulf area have the capability to load crude oil on vessels for export. Most facilities in the Gulf only support Aframax tankers but some (like Corpus Christi) will be able to handle Suezmaxes in the future. VLCCs may be utilized in the short term if the economics support reverse lightering in the U.S. Gulf. Louisiana Offshore Oil Port (LOOP) is the only VLCC facility in the U.S. Gulf, but it is an import terminal. LOOP is thinking about starting loading services by 2018 and adding storage capacity, but reconfiguring LOOP will take time and money”, Poten noted.

[ROCKMAN]

T - Are you aware that for the last few years tankers have lined up at the Corpus Christi OIL EXPORT TERMINAL filling up with Eagle Ford oil and hauling it to eastern Canada refineries? Made easier since they REVERSED two pipelines that used to take imported oil to refineries in the San Antonio area. Hundreds of millions of bbls of US oil have been EXPORTED from Gulf Coast ports in recent years.

So I'll ask the same question again: who will be the "new buyers" of US oil exports given that anyone who wanted to buy our could have been doing so before the "ban" was lifted? Asia? Over a year ago we were exporting EFS produ gion to S Korea. That will probably be the next bullsh*t headline: first load of US oil shipped to Asia after ban lifted. Which isn't the same as saying it's the first load ever shipped to Asia, is it? lol

[Pops]

[ROCKMAN]

pstarr - True: NGL's are not "oil" and are priced on a different basis. OTOH condensate is oil and is priced on the basis as oil. In the case of Eagle Ford condensate is typically benchmarked to WTI. But some of my lighter oil I barge to La is benchmarked to La Light Sweet because ut gets a better price then WTI. Texas liquid hydrocarbon classification is not based on the gravity of the production. IOW a 42 API might be oil and a 37 API might be condensate.

The condensate/light oil used to make dilbit is typically not removed from the blend before processing. in fact sometimes more conde sate is added to the blend. In either case condensate is not used to make plastic: NG and some NGL's are used to make plastics.

Condensate is the term the oil industry uses for the lighter gravity OILS. The distinction is often based on how much NG a well produces. IOW the oil is dissolved in the gaseous phase. IOW that OIL condenses out of the NG. I suspect this is often the source of the confusion between condensate/oil and NGL's. I have a well in La currently producing a lot of NG, condensate and NGL's. The NG is sold as NG, the NGL as NGL and the condensate as oil. Condensate has good or better refinery yields as some heavy oils. Which is why some condensates sell for a higher price then many heavy oils.

[ROCKMAN]

And just one more side note from Platts about the volume of oil that has been shipped out of the Corpus Christi terminal in recent years. I’ll point out some pertinent comments in the piece.

Sanchez Energy considers condensate export terminal near Corpus Christi, Texas (Platts 2 Jun 2015)

Executives had said in prior earnings calls that they were considering export opportunities for oil produced at Sanchez's Catarina shale play in the Eagle Ford. The company reached 50,000 b/d of oil equivalent by the end of the first quarter, and for the Catarina production, about a third was oil. Sanchez Energy is now looking to build an export terminal near Corpus Christi. The port records volumes of outbound crude and condensate, and those volumes have been falling this year. March's 596,773 b/d in shipments were 9% below January's 654,109 b/d.

{IOW about 200 MILLION BBLS of oil per year has been shipping out of CC. Obviously not all to foreign buys. But some has been…mostly Canadian refineries that need the lighter oil to blend with their heavier stocks}

The port's proximity to the Eagle Ford provides a direct route for moving crude to domestic destinations on the US Gulf and East coasts, as well as Canada. It also makes it a prime exit point for condensate exports. The amount of crude shipped from the marine facility is listed in short tons in the port data. A conversion rate of 277.24 lb/barrel was used to derive the b/d rate. The conversion rate is common for a 47 API barrel of light sweet crude such as that found in the Eagle Ford Shale.

{And again to help resolve the ongoing confusion between NGL’s and condensate here are the words from someone other than the Rockman. In this case one of the biggest US keepers of oil patch statistics, Platts: “…for a 47 API light sweet CRUDE OIL such as found in the Eagle Ford Shale”. Condensate = crude oil…not NGL’s. Condensate is lighter OIL that is in suspension with the NG. When produced it CONDENSES (and thus the term “condensate”) into liquid OIL. It’s no different than steam: when the steam cools and the pressure decreases the water CONDENSES back into liquid form. But it’s still water. Just as condensate is still oil. And there are many heavy oils that sell for less per bbl then condensate.

[geopressure]

Now days, when people say Condensate, they usually mean crude oil with an API Gravity above 50, and I guess Eagleford Light Sweet @ 47 Degrees sneaks into that classification somehow, though I would call it a light crude...

Natural Gas Liquids are the hydrocarbon molecules that condense out of a stream of Natural gas production. This would be really low molecular weight Hydrocarbons. Chiefly ethane, propane, butane(s), pentane(s), & hexane(s)... On the light end, a good portion of the ethane often remains in the gas stream... On the heavy end of these molecules, some hexanes & pentane molecules will be be produced as liquids (mixed in with the larger crude oil molecules)...

Natural gas = Methane, a little ethane & trance amounts of propane & butane
Natural gas liquids = Ethane through Hexane(s)
Condensate = Hexane & up, but mostly around C-10 (guess, but probably pretty close)
Crude Oil = Hexane & up, but mostly larger hydrocarbons

[Pops]

Thanks geo, sorry we took so long to approve you.

[Pops]

That didn't take long...

First Tanker of U.S. Crude Oil for Export Sails From Texas

[TheDude]

You may need to open this graph in a new tab to see it all. Tried to make a thumbnail but couldn't figure out how.

I like how the response to the Arab embargo was to deny exports of a commodity that had hardly been exported before, pay attention to the ban for about 3 years, then start to export it anyway. As the header on my graph states the products export data only goes back to 1980 at ca. 500 kb/d, of course they'd been exporting tons of the stuff before then, and the idea of banning exports of product was probably tossed around in 1975 too, only to have it shot down as too draconian.

Is shale oil too light/sweet for refineries to handle, like Pops mentions above? I've seen that mentioned here and there. Here's an interesting write up: United States Crude Exports: Setting Sail in 2016 - Oil & Gas 360

[ROCKMAN]

Dude - Here's an easier way to view the situation: simply look at the actual numbers. According to the EIA since the "oil export ban" law was signed the US exported about 1.5 BILLION BBLS OF OIL. In fact the year after the bill was signed the US exported more oil the the year before it was signed. And a decade later 10X that volume.

And no: the first tankers hauling oil from Texas didn't just started making runs: thousands of tankers have shipped oil overseas from Texas over the last 40 years since the "ban" became law. The uttery dishonest spine: the first tankers since the "ban" was lifted. Likewise a tanker setting sail tomorrow will be the first oil exported since 3 January 2016.

And as a sidenote most of that 1.5 BILLION BBLS of exported oil was not lighter shale oil. In fact prior to the shale boom the US had to import the same lighter oil to blend with our heavier imported oil. The US refineries are optimized to crack blends with a very narrow gravity range: 31 API to 33 API.

[Pops]

Yes, do look at the link
http://www.eia.gov/dnav/pet/pet_move_ex ... mbbl_a.htm


In 2014 exports went up from 48 to 128mm bbl/yr on the special permits, 120 to CA, 8 elsewhere. Before that it was just Canada, and likely most of that came back. Not sure why this is such a thing with you ROCK, all anyone needs to do is look at the link to see that no, we haven't been exporting crude forever.
http://www.eia.gov/dnav/pet/pet_sum_snd ... _a_cur.htm

Here is a good overview from earlier in the year.
http://www.reuters.com/article/us-usa-o ... RI20150814

[TheDude]

"We haven't been exporting crude forever." Well, according to the data we've been exporting since 1870. Technically, true, not forever.

Tanada's link forecasts crude exports to hit 1.5 mb/d in 2020, too. I guess that wouldn't be feasible with this niggling "ban" and its attendant red tape in place. Now, let's repeal that ridiculous Jones Act.

[ROCKMAN]

Dude - BTW none of the US oil exported to Canada comes under the Jones Act since those are foreign ports. But you have a point: last time I saw the numbers there were only 3 tankers that qualified for US intra-country transfer and one of those was tied up on long a term contract.

It’s bad enough when some dumb ass Yankee writes this bullsh*t but this comes from a newspaper in San Antonio, Texas in the heart of the Eagle Ford play. Right - the first oil exported from Corpus Christi. lol It’s of little wonder the American public doesn’t understand sh*t about the energy situation since they get most of their “information” from the MSM.

FYI during 2015: $1.94 BILLION in oil was exported from the port of CC. This was an increase from $1.44 BILLION during 2014. Most was exported to Canada which is the leading destination by value of oil exports from CC. Additionally about $950 MILLION other petroleum products were exported. BTW the US, according to the EIA, has been exporting oil to various EU countries (including Italy) off and on for many years so even the “first oil exports to Europe” is an easily proven lie.

“A foreign tanker carrying an historic shipment of Eagle Ford crude oil from the Port of Corpus Christi appears to be headed to the Italian coast. Less than two weeks after the federal government lifted the ban on exporting crude oil, ConocoPhillips landed a contract with Switzerland-based trading company Vitol. In quick turnaround, ConocoPhillips used pipelines to send light sweet crude oil from its leases in the Eagle Ford Shale just southeast of San Antonio to a terminal owned by San Antonio-based NuStar Energy LP (NYSE: NS) in the Port of Corpus Christi.

It is an historic voyage for the Theo T, which is carrying the first U.S. crude oil export shipment in more than 40 years. The federal government banned crude oil exports during the Arab oil embargo of the 1970s, but the shale revolution has resulted in record domestic production. ConocoPhillips and NuStar beat other competitors along the Texas Gulf Coast to become the first to export crude oil from the United States after the ban was lifted. Enterprise Products Partners LP (NYSE: EPD) also landed a deal with Vitol and plans to load a shipment of domestic light crude oil at its terminal in the Houston Ship Channel during the first week of January.”

And Pops - Did you look at the link and saw where the US exported more oil the year AFTER the so called "ban" bill was signed into law then the year before it was passed? My point is really fucking simple: there has never been an effective ban on exporting US oil. BTW: none of the oil exported to Canada (the biggest destination for US oil exports) was done by granting wavers: exports of US oil to Canada has always been exempt from the "ban": no wavers have eve been required. As much US oil production can be exported to Canada as there's demand without getting permission from our govt.

[Pops]

$this->bbcode_second_pass_quote('ROCKMAN', 'A')nd Pops - Did you look at the link and saw where the US exported more oil the year AFTER the so called "ban" bill was signed into law then the year before it was passed?