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Energy Tomorrow Blog

Growing the Case for Crude Oil Exports

analysis  energy exports  crude oil  crude oil production  economic benefits  gasoline prices  global markets 

Mark Green

Mark Green
Posted May 1, 2015

API President and CEO Jack Gerard joined members of Congress and others at a Capitol Hill press conference calling for an end to the United States’ 1970s-era ban on the export of domestic crude oil. Gerard:

“We've come to the point where we have a limitation on our ability to continue to grow this renaissance, to create good-paying jobs, to help stimulate the domestic economy. Today, there are few public policy changes that would bring as much economic value to our domestic economy than lifting the ban on crude exports.”

Texas Democratic Rep. Henry Cuellar said other Democrats will support legislation to end the export ban:

“I think we are going to get there. Once we get this on the floor, you’re going to see that we’re going to get more support from the Democratic side. … I’ll continue working with my friends across the aisle to make sure that this outdated ban on oil exports is lifted.”

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Energy Exports, Energy Benefits

news  energy exports  crude oil  oil and natural gas development  north dakota  colorado  ohio  fracking  biofuels 

Mark Green

Mark Green
Posted May 1, 2015

Ravalli (Mont.) Republic: The nation’s energy future is strong, with oil and natural gas production driving the country closer to becoming a net exporter of energy, the commissioner of the Federal Energy Regulatory Commission said Wednesday.

Commissioner Norman Bay said the U.S. has ramped up its oil and gas production while slowing domestic demand for petroleum.

Growth of the nation’s electrical consumption has also slowed to 1 percent a year, and coal is playing a smaller role in U.S. power generation.

“In 2009, all that natural gas flooded the market and the share of electricity generated from coal dropped from 50 percent to 45 percent,” Bay said. “Over time, the share of generation by natural gas continues to increase and electricity generated from coal continues to decrease. It’s primarily driven by market forces.”

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Energy’s Benefits to Investors and Consumers

news  investments  pension plans  epa  gasoline prices  energy exports  oil and natural gas production 

Mark Green

Mark Green
Posted April 29, 2015

Rigzone: For every $1 that public pension funds allocated to oil and gas assets in 2005, investors saw a return of 130 percent in 2013, about double their returns on other investments, according to a new study from the American Petroleum Institute and Sonecon LLC.

“The lesson, frankly, from this analysis is that pension plans would be in better shape if they increased the share they invest in oil and gas,” said Robert Shapiro, a co-author of the report, said during a conference call with reporters. 

Shapiro found that the funds invested an average of 4 percent of their assets in oil and gas, which yielded 8 percent of the returns. The study reviewed the returns of the two largest funds — those owned by public school employees and state workers in every case — for each of 17 states, which included California, Florida, New Mexico and West Virginia for the eight-year period from 2005 to 2013.

“All of these pension plans have been under serious economic stress since 2008. Thirty-five states have enacted changes that will change benefits,” Shaipro said, adding that when the plans’ returns are higher, there is less pressure on them to reduce benefits.

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Energy Policy is Linked to Energy Security

news  energy exports  liquefied natural gas  lng  fracking  economic growth  e15  ethanol  seismic survey 

Mark Green

Mark Green
Posted April 28, 2015

EIA: In its recently released Annual Energy Outlook 2015 (AEO2015), EIA expects the United States to be a net natural gas exporter by 2017. After 2017, natural gas trade is driven largely by the availability of natural gas resources and by world energy prices. Increased availability of domestic gas or higher world energy prices each increase the gap between the cost of U.S. natural gas and world prices that encourages exports of liquefied natural gas (LNG), and, to a lesser extent, greater exports by pipeline to Mexico.

The AEO2015 examines alternate cases with higher and lower world oil price assumptions, which serve as a proxy for broader world energy prices given oil-indexed contracts, as well as with higher assumed U.S. oil and natural gas resources. These assumptions significantly affect projected growth in annual net LNG exports after 2017. Net LNG exports make up most of the natural gas exports in most cases. By 2040, LNG exports range from 0.2 trillion cubic feet (Tcf) in the Low Oil Price case to 10.3 Tcf in the High Oil and Gas Resource case. For comparison, 2040 natural gas net exports by pipeline range from 1.1 Tcf in the High Oil Price case to 2.9 Tcf in the High Oil and Gas Resource case.

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ConocoPhillips’ Lance: Crude Exports Would Boost Economy

analysis  conocophillips  crude oil  energy exports  refineries  economic benefits  gasoline prices  job creation  domestic energy production 

Mark Green

Mark Green
Posted April 27, 2015

ConocoPhillips Chairman and CEO Ryan Lance talks with Energy Tomorrow about key industry challenges ahead and details the case for ending the United States’ 1970s-era ban on the export of domestic crude oil. Lance is a petroleum engineer with 28 years of oil and natural gas industry experience in senior management and technical positions with ConocoPhillips, predecessor Phillips Petroleum and various divisions of ARCO. His past executive assignments with ConocoPhillips have included responsibility for international exploration and production, regional responsibility at various times for Asia, Africa, the Middle East and North America, and responsibility for technology, major projects, downstream strategy, integration and specialty functions. He is a member of the Society of Petroleum Engineers, and earned a Bachelor of Science degree in petroleum engineering from Montana Tech in 1984.

Q: Given the current downturn in oil prices, talk about the key decisions ahead for the industry over the next 10 years.

Lance: We foresee several key decisions ahead for companies in our industry. First they have to determine their strategic direction.  Industry has transitioned from an era of limited resource access to one that, due to the productivity of North American shale and the potential for shale development elsewhere, offers a new abundance of resources. Although many of the best conventional resource areas remain off limits in traditional exporting countries, shale and other unconventional resources offer immense potential in many areas that are accessible. So companies now have an unprecedented range of options – pursuing North American shale,  international shale, deepwater development, LNG, oil sands, international exploration, and so on. Companies must determine where they have or can build competitive advantages and leverage relationships with host nations, potential partners and suppliers, and identify the long-term opportunities best for them.  

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Made for Each Other: Energy and Free Trade

news  energy exports  crude oil  liquefied natural gas  pipelines  hydraulic fracturing  fracking  ozone standards  canadian oil sands 

Mark Green

Mark Green
Posted April 27, 2015

Wall Street Journal op-ed (John Hess): While one can debate the reasons for the Organization of Petroleum Exporting Countries’ decision in November to continue flooding the oil markets, the fact is that this is squeezing many U.S. shale oil producers out of business. Oil prices have dropped by 50% in the past six months, and crude oil inventories in the U.S. have grown from 350 million barrels last year to more than 480 million barrels today.

Part of the reason inventory has ballooned is that crude produced in the U.S. is literally trapped here, because American firms are not allowed to sell it overseas. An antiquated rule bans crude oil exports from the lower 48 American states, even though producers could earn $5-$14 more per barrel by selling on the world market. At this moment the U.S. government is considering lifting sanctions on Iranian crude oil exports. Why not lift the self-imposed “sanctions” on U.S. crude exports that have been in place for the past four decades?

The export ban is a relic of a previous era, put in place around the time of the 1973 Arab oil embargo against the U.S., when Washington thought very differently about ensuring America’s energy needs. Other measures related to the 1973 embargo, such as price controls and rationing, were eliminated decades ago, as policy makers realized that they impeded, rather than aided, American energy security. But the ban on crude oil exports persists.

There is no defensible justification for the continued ban on the export of U.S. crude oil.

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Energy Exports, Infrastructure and the ‘Turning Point’

news  energy exports  lng  crude oil  pipelines  regulation  shale energy 

Mark Green

Mark Green
Posted April 24, 2015

The Hill Op-ed (U.S. Reps. Calvert and Israel): These days there doesn’t seem to be many things Democrats and Republicans can agree on, but after a recent bipartisan Congressional Delegation trip to Ukraine, we came back in agreement on one thing. Visiting Kiev, and speaking with Ukraine’s leaders it is clear that while their economy is faltering, there are steps that we can take, in addition to sanctions, that will hamper Russia’s economy and future border advances. …

… It has become clear to us, and many others, that the U.S. is sitting on a unique opportunity to advance our economic and national security goals.  By increasing our ability to export natural gas – in the form of liquefied natural gas or LNG – to Europe, the U.S. can weaken Russia’s strategic stronghold while boosting our domestic economy by increasing energy exports.

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Sound Regulation, Policy Choices Key to Energy Growth

renewable fuel standard  rfs34  biofuels  energy exports  crude oil production  pennsylvania  fracking  solar 

Mark Green

Mark Green
Posted April 16, 2015

The Wall Street Journal: A former White House economic adviser is calling for changes to a 2005 law mandating increased use of alternative fuels in the nation’s transportation supply, adding a key voice to a growing chorus of people who say the policy is not working.

In a report published Thursday, Harvard University professor Jim Stock, who served on President Barack Obama’s Council of Economic Advisers in 2013 and 2014, proposes several reforms to the biofuels mandate, known as the renewable fuel standard, including some requiring congressional approval.

The report adds to a growing body of politicians and experts who are questioning the law’s effectiveness amid regulatory uncertainty and lower oil prices.

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Energy, Exports and Production

energy exports  oil and natural gas development  economic growth  ozone  regulation  pipelines  innovation  technology 

Mark Green

Mark Green
Posted April 14, 2015

The National Interest (James Jay Carafano): Increasing American production and export of energy is a win-win-win proposition. It would enhance our national security, make international energy markets more free, and address environmental issues realistically. The next president should lead the campaign for an American energy export agenda. In the meantime, the present Congress can do much to prepare for the march.

The acme of presidential leadership is crafting policies that make the nation safe, free, and prosperous. Satisfying all three priorities is often the Oval Office's greatest challenge. It is like single-handedly trying to get squabbling triplets into their car seats. Yet, the confluence of geopolitics, America's energy abundance, and economic and environmental realities offers an almost unprecedented opportunity to do this successfully.

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Crude Exports to Help Grow the U.S. Energy Revolution

energy exports  crude oil production  global markets  trade  eia  russia  saudi arabia  shale energy  economic benefits 

Mark Green

Mark Green
Posted April 7, 2015

Following on yesterday’s post on increased domestic energy production that is backing out imports, we see that the U.S. remained No. 1 in the world in the production of petroleum and natural gas hydrocarbons last year, according to the U.S. Energy Information Administration (EIA).

The government agency responsible for quantifying all things energy says that U.S. oil and natural gas production has been trending higher than the output of Russia and Saudi Arabia, the second- and third-largest producers:

Since 2008, U.S. petroleum production has increased by more than 11 quadrillion British thermal units (Btu), with dramatic growth in Texas and North Dakota. Despite the 50% decline in crude oil prices that occurred in the second half of last year, U.S. petroleum production still increased by 3 quadrillion Btu (1.6 million barrels per day) in 2014. Natural gas production—largely from the eastern United States—increased by 5 quadrillion Btu (13.9 billion cubic feet per day) over the past five years. Combined hydrocarbon output in Russia increased by 3 quadrillion Btu and in Saudi Arabia by 4 quadrillion Btu over the past five years.

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