Emphasize higher-value energy exports, EPRINC president recommends

Benefits from US energy exports are so obvious that policymakers should look beyond crude oil and LNG to higher-value petroleum products, a Washington energy observer suggested.

Luician Pugliaresi, president of Energy Policy Research Foundation Inc. (EPRINC), said a barrel of product could fetch up to twice as much as a barrel of crude. “The challenge we face is how we adjust our policies so we don’t lose this value-added opportunity,” he said during an energy imports discussion at the US Energy Association’s 5th annual Energy Supply Forum on Oct. 3.

“Our regulatory framework is not set up for this,” he maintained. “It isn’t equipped to handle an opportunity this big. It’s a very serious problem.”

A second panelist, Guy F. Caruso, a senior advisor in the Energy and National Security Program at the Center for Strategic and International Studies, said the US already exports 2.6 million b/d of petroleum products. “The crude oil export debate almost certainly will come during the next administration no matter who is elected president in November,” he predicted.

The prospect that US crude imports will continue to drop could take global markets’ spare production capacity back to its level before Hurricanes Katrina and Rita in 2005 and restore market stability, said Caruso, who led the US Energy Information Administration from July 2002 to September 2008.

“We’re seeing significant innovation at all levels,” he said. “When the incentives are there and the regulation is right, this country has a great deal of potential. We will still be part of a global energy market. Even if we become a net energy exporter, we’ll still be vulnerable to supply interruptions.”

LNG exports

The dramatic growth in US gas production from tight shale formations and in association with tight oil development makes LNG exports increasingly likely, the panelists agreed. There also will be some problems, they added.

“It’s not going to be easy to convert the nine existing facilities which have submitted applications to the [US Department of Energy] to exports,” said the panel’s third member, Charles K. Ebinger, director of the Energy Security Initiative at the Brookings Institution.

“We believe that by 2020, US LNG exports will be 4-6 bcfd, and facilities beyond these nine will find it hard to penetrate the global market,” he told the audience. “Getting long-term commitments to provide the necessary financing for projects may be an even bigger stumbling block.”

Caruso noted that $3-5/Mcf gas prices will probably be a range in which US refiners, chemical, and other manufacturers will be comfortably competitive. Challenges will primarily be with regulations and infrastructure development for both processing and transportation, he indicated. Already, about 1 million b/d of light, sweet crude produced from the Bakken formation moves to customers by truck and rail, Caruso said.

“We could get in a position where the US has the low-cost refining capacity, and becomes dominant,” said Pugliaresi. “There’s too much capacity in the Atlantic Basin, but rationalization is more likely in Europe and, to a degree, on the East Coast than on the Gulf Coast.”

Contact Nick Snow at nicks@pennwell.com.

Related Articles

MARKET WATCH: NYMEX oil prices rise on revised OPEC forecast

02/10/2015 Crude oil prices climbed more than $1/bbl on Feb. 9 to settle above $52/bbl, marking a third consecutive trading session that ended with higher pri...

MEO, Eni to exchange sections of Timor Sea permit

02/10/2015 MEO Australia Ltd., Melbourne, and Eni SPA—MEO’s joint-venture partner in the NT/P68 permit in the Timor Sea—have decided to split the permit betwe...

MRPL increases ownership in aromatics complex

02/10/2015 Mangalore Refinery & Petrochemicals Ltd. (MRPL), a subsidiary of Oil & Natural Gas Corp. Ltd. (ONGC), has increased its ownership interest ...

CNOOC signs two South China Sea PSCs with SK Innovation

02/10/2015 China National Offshore Oil Corp. Ltd. signed two production-sharing contracts with SK Innovation Co. Ltd., Seoul, for two blocks in the Pearl Rive...

Renewed uncertainty emerges over Greater Sunrise development

02/10/2015 There has been renewed uncertainty over the development of the Woodside Petroleum Ltd.-operated Greater Sunrise gas field in the Timor Sea followin...

Senators’ bill aims to curb flaring by expediting permit process

02/09/2015 North Dakota and Wyoming’s US senators introduced legislation that aims to capture methane and reduce flaring by expediting procedures for obtainin...

USW union workers add two BP refineries to strike list

02/09/2015 Union workers at two BP PLC-owned refineries in Indiana and Ohio have joined the United Steelworkers union’s (USW) unfair labor practice (ULP) stri...

Bendine elected as Petrobras’ chief executive officer

02/09/2015

The board of Petroleo Brasileiro SA (Petrobras) has approved the election of Alde Mir Bendine as the company’s chief executive officer.

Central starts gas sales from Palm Valley field

02/09/2015 Central Petroleum Ltd., Brisbane, is to start sale of early natural gas from Palm Valley field to Northern Territory Power & Water Corp. under ...
White Papers

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...

Accurate Thermo-Fluid Simulation in Real Time Environments

The crux of any task undertaken in System Level Thermo-Fluid Analysis is striking a balance between ti...

6 ways for Energy, Chemical and Oil and Gas Companies to Avert the Impending Workforce Crisis

As many as half of the skilled workers in energy, chemical and oil & gas industries are quickly he...
Sponsored by
Available Webcasts

On Demand

Global LNG: Adjusting to New Realities

Fri, Mar 20, 2015

Oil & Gas Journal’s March 20, 2015, webcast will look at how global LNG trade will be affected over the next 12-24 months by falling crude oil prices and changing patterns and pressures of demand. Will US LNG production play a role in balancing markets? Or will it add to a growing global oversupply of LNG for markets remote from easier natural gas supply? Will new buyers with marginal credit, smaller requirements, or great need for flexibility begin to look attractive to suppliers? How will high-cost, mega-projects in Australia respond to new construction cost trends?

register:WEBCAST


US Midstream at a Crossroads

Fri, Mar 6, 2015

Oil & Gas Journal’s Mar. 6, 2015, webcast will focus on US midstream companies at an inflection point in their development in response to more than 6 years shale oil and gas production growth. Major infrastructure—gas plants, gathering systems, and takeaway pipelines—have been built. Major fractionation hubs have expanded. Given the radically changed pricing environment since mid-2014, where do processors go from here? What is the fate of large projects caught in mid-development? How to producers and processors cooperate to ensure a sustainable and profitable future? This event will serve to set the discussion table for the annual GPA Convention in San Antonio, Apr. 13-16, 2015.

This event is sponsored by Leidos Engineering.

register:WEBCAST


The Future of US Refining

Fri, Feb 6, 2015

Oil & Gas Journal’s Feb. 6, 2015, webcast will focus on the future of US refining as various forces this year conspire to pull the industry in different directions. Lower oil prices generally reduce feedstock costs, but they have also lowered refiners’ returns, as 2015 begins with refined products priced at lows not seen in years. If lower per-barrel crude prices dampen production of lighter crudes among shale plays, what will happen to refiners’ plans to export more barrels of lighter crudes? And as always, refiners will be affected by government regulations, particularly those that suppress demand, increase costs, or limit access to markets or supply.

register:WEBCAST


Oil & Gas Journal’s Forecast & Review/Worldwide Pipeline Construction 2015

Fri, Jan 30, 2015

The  Forecast & Review/Worldwide Pipeline Construction 2015 Webcast will address Oil & Gas Journal’s outlooks for the oil market and pipeline construction in a year of turbulence. Based on two annual special reports, the webcast will be presented by OGJ Editor Bob Tippee and OGJ Managing Editor-Technology Chris Smith.
The Forecast & Review portion of the webcast will identify forces underlying the collapse in crude oil prices and assess prospects for changes essential to recovery—all in the context of geopolitical pressures buffeting the market.

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected