The first US crude oil shipment since the 70s is heading for Italy

posted at 4:41 pm on January 4, 2016 by Jazz Shaw

There’s been more than enough bad news to go around so far today, so let’s get to something which is at least on the positive side. Most of you recall the massive spending deal which went through at the end of the last congressional session with a bad taste in your mouth… and for good reason. But the one, small bright spot in that very bad day was that the U.S. crude oil export ban was lifted in exchange for the far, far too many horrible things which were given away to the Democrats. Just this past week, the door which was opened had its first traveler slide through, as Kerry Picket reports at the Daily Caller.

The first crude oil shipment exported from the United States, after a 40 year ban, left from Corpus Christi, Texas last Thursday.

NuStar Energy and ConocoPhillips loaded a vessel with light crude oil pumped from the Eagle Ford Shale of South Texas at NuStar’s North Beach Terminal at Port Corpus Christi. The crude is to be sold to the international trading company Vitol.

“Infrastructure improvements at Port Corpus Christi have placed our port in a unique position as a critical component in the export of U.S. crude and condensate. Port Corpus Christi’s deep draft ship channel and strategic location to some of the largest production areas in the US provides a secure and competitive supply chain to markets worldwide,” John LaRue, Port Corpus Christi Executive Director, said in a statement.

Argus Media reports that the vessel – the Theo T – got underway but won’t be the only carrier heading for Europe. Vitol will be purchasing a shipment of product from Enterprise Products Partners, scheduled to load at the Enterprise Hydrocarbon Terminal (EHT) on the Houston Ship Channel. The opportunities presented here stretch well beyond the simple ability to bring more crude oil products to market and strengthening the position of our allies across the Atlantic. In order to efficiently load and ship crude in large quantities, some of the biggest tankers in service will be required. That means that some of the ports, including Houston, will need to do additional dredging and modernizing of their terminals to keep up with the demands of 21st century shipping infrastructure. And that means more jobs here at home.

I wanted to include an interview with ConocoPhillips Chairman and CEO Ryan Lance, released by the US Chamber of Commerce. He has a lot of insight as to where we stand to reap the most benefits from this expansion and how our partners in the western world can gain some traction at the same time.

None of this makes the spending deal worthwhile, mind you, but we may as well enjoy what small benefits we got from it. When the private industry was cut loose to explore this opportunity they moved at lightning speed and it should only pick up from here.

OilTanker


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Comments

I look forward to the lines of eco-terrorists attempting to blockade these tankers with their kayaks.

St. Pancake, tanker addition

Rogue on January 4, 2016 at 4:44 PM

Certainly not because of anything the Democrats did…

PatriotRider on January 4, 2016 at 4:44 PM

St. Pancake, tanker edition

Rogue on January 4, 2016 at 4:44 PM

fifm

Rogue on January 4, 2016 at 4:44 PM

To be honest, I’d rather the crude stay in the U.S. to keep fuel prices low.

Magicjava on January 4, 2016 at 4:48 PM

“Other than that, Mrs. Lincoln, how did you like the play…?”

ebrown2 on January 4, 2016 at 4:48 PM

This is great. Now the oil donors who lobbied for this, will have more money to spend on their puppets in Congress who will again vote for more spending. Selling oil does not make many jobs. But it fills a lot of pockets. This is why the jackals in Congress agreed to this ONE concession. It was the one concession that did not hurt the establishment, but in fact helped it.

HugoDrax on January 4, 2016 at 4:50 PM

They send wine, we send oil. Good trade.

Oil Can on January 4, 2016 at 4:52 PM

Also, instead of selling our own crude to other countries, I’d rather we use it to reduce or maybe even eliminate importing crude from saudi arabia. They a just a bunch of nut jobs who export terrorism around the world.

Magicjava on January 4, 2016 at 4:53 PM

Prediction, Green Peace YouTubes a video of a crewman throwing a plastic up over the side and the U.S. Congress bans any and all exports all over again.

Limerick on January 4, 2016 at 4:54 PM

They send wine, we send oil. Good trade.

Oil Can on January 4, 2016 at 4:52 PM

And Partanna extra-virgin olive oil from Sicily. Mmmmmm …

M240H on January 4, 2016 at 4:55 PM

Just in time for the Middle East apocalypse.

kcewa on January 4, 2016 at 4:58 PM

To be honest, I’d rather the crude stay in the U.S. to keep fuel prices low.

Magicjava on January 4, 2016 at 4:48 PM

With 1.18 billion barrels in the reserves… I don’t think that will be a real problem anytime soon. Plus, as an added benefit, the U.S. is now competing head-to-head with OPEC.

That should keep prices down.

Turtle317 on January 4, 2016 at 4:58 PM

And all it took was just conceding everything on planned parenthood, executive amnesty, Obamacare, etc., to the point where Nancy Pelosi taunted Ryan with an end zone dance in front of his face.

But worry not, Ryan plans on several show votes to rectify those concerns.

At least the long suffering oil companies got thrown a bone.

Redstone on January 4, 2016 at 5:00 PM

To be honest, I’d rather the crude stay in the U.S. to keep fuel prices low.

Magicjava on January 4, 2016 at 4:48 PM

No need. Fuel prices are set on a global level. The more oil in the global market, the lower the price. Also, these prices are set on futures so you’ll notice that the price dropped after the ban was lifted but before the first tanker left port.

The other good news is that this probably hurts Norway the most since they’ve been supplying Europe with oil. If it’s cheaper to frack it in Texas and ship it to Europe than it is to buy it off Norway’s rigs in the north Atlantic, they’re going to have to lower their prices. Since their oil income funds their socialist state, it’s a bad day for Scandinavian socialism.

Occams Stubble on January 4, 2016 at 5:02 PM

Yea!…lets start selling when the oil is selling for $38/barrel!
Smart power! Boy!…Paul Ryan really snookered those dumb democrats!

Mimzey on January 4, 2016 at 5:03 PM

Mimzey on January 4, 2016 at 5:03 PM

In the next few weeks I have a feeling the supply will be decreasing in the Middle East.

Oil Can on January 4, 2016 at 5:07 PM

To be honest, I’d rather the crude stay in the U.S. to keep fuel prices low.

Magicjava on January 4, 2016 at 4:48 PM

*head desk* *head desk* *head desk*

Crude oil is a fungible commodity. It is pretty much the fungible commodity. What this means is the global price of crude oil is functionally the spot price for crude oil, and US refiners are in no meaningful way effected by an export ban. The people that are effected by an export ban are US producers, but this was irrelevant while US refining crude input requirements exceeded US domestic crude output, which up until the advent of the frackers wasn’t so much the way to bet as an implicit, unexamined assumption. The export ban was political pap in the 70’s, utterly meaningless, and done for cause of the reaction evidenced in your comment- political benefit due to public apocryphal understanding of the situation at no immediate or assumed ultimate cost whatsoever- and currently just an unforced error and pure unmitigated domestic economic damage; up until recently we actually expended effort to theoretically undo the foundational innovation in crude oil production (smoothing out the incessant boom-bust cycle for producers; hail Rockefeller), just for ourselves. Now we are not. This isn’t so much a good thing as a decision to stop doing a stupid thing- the worm has turned away from the pain.

normalphil on January 4, 2016 at 5:14 PM

Turn us into a nation that sells our raw natural resources at bottom dollar instead of making value added end products. Expect prosperity.

Constitutionalist on January 4, 2016 at 5:16 PM

In the next few weeks I have a feeling the supply will be decreasing in the Middle East.

Oil Can on January 4, 2016 at 5:07 PM

Could be.

Mimzey on January 4, 2016 at 5:17 PM

“When the private industry was cut loose to explore this opportunity they moved at lightning speed and it should only pick up from here.”

Not that I don’t believe that when markets change dramatically, free enterprise is there with it pants on to take full advantage of it, but I am curious as to any campaign contributions Vitol, NuStar and ConocoPhillips might have made recently.

Dusty on January 4, 2016 at 5:18 PM

To be honest, I’d rather the crude stay in the U.S. to keep fuel prices low.

Magicjava on January 4, 2016 at 4:48 PM

You see, that’s our whole problem right there when it comes to this kind of exporting. Thanks to commenters above for explaining.

Meremortal on January 4, 2016 at 5:24 PM

Paul had one priority in the negotiations and that was to throw a bone to his big lobbyist contributors. He did nothing to convince anyone this was the right move on a principled basis and in fact it’s deeply unpopular. So after fighting and winning to get a huge majority in the House and to take the Senate, we’re awarded with credit for a deeply unpopular corporate give away. The Republican party needs to go the way of the Whigs. Cruz or bust 2016!

livefreeordie76 on January 4, 2016 at 5:30 PM

Turn us into a nation that sells our raw natural resources at bottom dollar instead of making value added end products. Expect prosperity.

Constitutionalist on January 4, 2016 at 5:16 PM

You should probably realize that the reason we are selling crude instead of refining it and selling finished products is because the Feds have not allowed any refineries to be built since the 1970s (well, a tiny one in ND and a condensate refinery in Houston in 2015). We are vastly under capacity.

George Dubbya didn’t manage to fast-track one single solitary damn refinery permit in spite of 8 years in office, and the paucity of refinery capacity is the real bottleneck in this country ever reaching energy independence.

That tanker leaving Corpus Christi full of light sweet? Even though there are plenty of refineries right here in Corpus, they can only process heavy sour crude from Venezuela (among other places) because the Fed says so. South Texas crude has to be transported to the east coast to be refined.

The insanity is not in the energy companies, who would be delighted to fulfill every expectation of your capitalist heart, but in a government that has put its heavy thumb on the side of the scale that favors the Saudis, and not America.

Dolce Far Niente on January 4, 2016 at 5:32 PM

This is great. Now the oil donors who lobbied for this, will have more money to spend on their puppets in Congress who will again vote for more spending. Selling oil does not make many jobs. But it fills a lot of pockets. This is why the jackals in Congress agreed to this ONE concession. It was the one concession that did not hurt the establishment, but in fact helped it.

HugoDrax on January 4, 2016 at 4:50 PM

Exactly, the fact that there never should have been such a ban in the first place does not disguise the fact that this is a bennie for the corporate donors. The COC hellpigs hate laissez-faire capitalism with a blue-burning passion.

Average Republican voters can DIAF as far as Taliban Ryan the Budget Terrorist and his merry Congressional allies are concerned.

ebrown2 on January 4, 2016 at 5:32 PM

That tanker leaving Corpus Christi full of light sweet? Even though there are plenty of refineries right here in Corpus, they can only process heavy sour crude from Venezuela (among other places) because the Fed says so. South Texas crude has to be transported to the east coast to be refined.

The insanity is not in the energy companies, who would be delighted to fulfill every expectation of your capitalist heart, but in a government that has put its heavy thumb on the side of the scale that favors the Saudis, and not America.

Dolce Far Niente on January 4, 2016 at 5:32 PM

Yep, NIMBY rules the day.

ebrown2 on January 4, 2016 at 5:34 PM

Yea! I knew if we could just take the House and Senate….

celt on January 4, 2016 at 5:37 PM

Yep, NIMBY rules the day.

ebrown2 on January 4, 2016 at 5:34 PM

You misunderstand. Refitting these refineries is PROHIBITED. New refineries re PROHIBITED. By our EPA overlords

Corpus and other cities and towns on the Gulf are not the ones preventing or objecting to anything (although there are always those would would object.)

Dolce Far Niente on January 4, 2016 at 5:38 PM

conservatives evidently don’t like having low gas prices after all.

everdiso on January 4, 2016 at 5:39 PM

And Partanna extra-virgin olive oil from Sicily. Mmmmmm …

M240H on January 4, 2016 at 4:55 PM

You have to watch the olive oil imported from Sicily as 75% is fake.

RickB on January 4, 2016 at 5:39 PM

conservatives evidently don’t like having low gas prices after all.

everdiso on January 4, 2016 at 5:39 PM

Do you know what a fungible asset is? What do they teach at liberal school?

Oil Can on January 4, 2016 at 5:44 PM

conservatives evidently don’t like having low gas prices after all.

everdiso on January 4, 2016 at 5:39 PM

So… you believe our low gas prices are because we haven’t been sending crude overseas? You think more crude on the international market will raise the price of gas?

.
.
.
.
BWAHAHAHAHHAHAHAHAHAAHAHAAAAA!!

Oh, that hurts my ribs. Thank you, Mr. Eckononononix Perfesser.

Dolce Far Niente on January 4, 2016 at 5:48 PM

You should probably realize that the reason we are selling crude instead of refining it and selling finished products is because the Feds have not allowed any refineries to be built since the 1970s.

Dolce Far Niente on January 4, 2016 at 5:32 PM

It appears they are adding refining capacity, to some extent.

cimbri on January 4, 2016 at 5:49 PM

Also, instead of selling our own crude to other countries, I’d rather we use it to reduce or maybe even eliminate importing crude from saudi arabia. They a just a bunch of nut jobs who export terrorism around the world.

Magicjava on January 4, 2016 at 4:53 PM

We don’t import much from Saudi. This oil from Eagle Ford cannot be easily refined in Texas as most refineries are set to handle heavy crude from Caribbean area. So easier to send to ally in Europe and wean them from the middle east terrorists and we will use Canadian, and Mexican oil in Texas (can you say Keystone Pipeline)

txdoc on January 4, 2016 at 5:50 PM

Dolce Far Niente on January 4, 2016 at 5:32 PM

Nice post.

Joseph K on January 4, 2016 at 6:12 PM

Thank you for the lesson on oil prices. I didn’t realise that’s how it worked.

Magicjava on January 4, 2016 at 6:18 PM

Dolce Far Niente on January 4, 2016 at 5:32 PM

Interesting argument when I just stated that we should turn it into a value added end product. That requires refineries. I know we have not been building any new refineries. Congress should have made it possible to build more rather than exporting our raw resources. And expanding the ones we have might have some value, but more competition is far better than larger monopolies.
Fungible or not, if we are exporting it cheap and importing expensive then we are not winning.

Constitutionalist on January 4, 2016 at 6:34 PM

So, the big win in this spending bill is a gift to the oil companies, lol.

It’s the stupid party for reason, folks.

xblade on January 4, 2016 at 6:51 PM

So, the big win in this spending bill is a gift to the oil companies, lol.

It’s the stupid party for reason, folks.

xblade on January 4, 2016 at 6:51 PM

Says the voice of someone who doesn’t understand d*ck about publicly traded companies.
Have a 401k? What’s in it: Lint?
The major oil companies produce a dividend of 4-8% annually for the owners.
Who are STOCK. HOLDERS. Like US. And when they prosper, the OWNERS benefit.
Personally, I plan to load up on a thousand shares or so among the majors, while their price points are in the toilet. I can wait.
Meanwhile: Dividends >>savings accounts or bonds. Fun!

But no, no: go on pontificating about the ‘evil’ oil companies. While you run your automobile on herbs and spices and healing crystals, or something.

orangemtl on January 4, 2016 at 7:13 PM

Says the voice of someone who doesn’t understand d*ck about publicly traded companies.
Have a 401k? What’s in it: Lint?
The major oil companies produce a dividend of 4-8% annually for the owners.
Who are STOCK. HOLDERS. Like US. And when they prosper, the OWNERS benefit.
Personally, I plan to load up on a thousand shares or so among the majors, while their price points are in the toilet. I can wait.
Meanwhile: Dividends >>savings accounts or bonds. Fun!

But no, no: go on pontificating about the ‘evil’ oil companies. While you run your automobile on herbs and spices and healing crystals, or something.

orangemtl

lol..you got me. This wasn’t a gift to the oil companies at all. They spent millions lobbying for it because they care about my 401k.

Stuck.On.Stupid. That would be you. Never mind I didn’t say a damn thing about oil companies being evil, dip shit. Just because congress handed them a gift….their major accomplishment btw…doesn’t make oil companies evil. No, it makes congress dumb and tone deaf. And so are you apparently.

xblade on January 4, 2016 at 7:37 PM

Yep, NIMBY rules the day.

ebrown2 on January 4, 2016 at 5:34 PM

You misunderstand. Refitting these refineries is PROHIBITED. New refineries re PROHIBITED. By our EPA overlords

Corpus and other cities and towns on the Gulf are not the ones preventing or objecting to anything (although there are always those would would object.)

Dolce Far Niente on January 4, 2016 at 5:38 PM

I’m well aware of that. It’s the mentality of the bureaucracy for the country as a whole. In any case, the constituencies are all going to be up in arms:

1) Placing them in marginal and lightly occupied areas/Federal lands will get the environuts riled up.

2) Building more of them in cheap, poor semi-urbanized areas, do I really need to spell this out?

3) Martha’s Vineyard can’t even stand wind farms off the coast, so they’re not going anywhere where the “elites” gather, obviously.

4) Retrofitting the refineries in already “contaminated” areas is an admission that we need fossil fuels, so the Luddite morons will be screaming.

ebrown2 on January 4, 2016 at 7:53 PM

Crude oil is a fungible commodity. It is pretty much the fungible commodity. What this means is the global price of crude oil is functionally the spot price for crude oil, and US refiners are in no meaningful way effected by an export ban.
normalphil on January 4, 2016 at 5:14 PM

Oil is not all the same. If your refinery was build to handle heavy Venezuelan crude, the very light shale oil from fracking is not what you want. OTH if a European or Mexican refinery finds their own oil to heavy to work in their refineries which were build for light sweet oil, one can use shale oil to dilute the heavy oil and make a workable blend. Just based on what refineries handle best, we will get some additional exports. Mexico actually trades heavy crude for light crude in a mutually benefical swap with the US.
I suspect if you want to make asphalt which is the heavy bottoms of the distillation process, you would rather have Orinoco tarry oil or Canadian Tar sands oil than shale oil. So, even if there is not a net decrease in imports from this measure, just allowing flexibility to trade will allow maximizing value which is in the consumer interest.

KW64 on January 4, 2016 at 8:31 PM

KW64 on January 4, 2016 at 8:31 PM

“functionally” and “meaningful” was meant to cover the down and dirty of juggling and shifting around assays; it gets itself sorted out.

normalphil on January 4, 2016 at 9:04 PM

Don’t forget the geopolitical benefit here. Europe could depend less on Russia and get oil from an ally.

wvmikep on January 5, 2016 at 8:39 AM

Low US oil prices effect all of us. Exporting oil only makes a few rich and creates a few jobs in comparison.

Stupid… which is why both parties voted for it.

aniptofar on January 5, 2016 at 9:20 AM

Hasn’t anyone noticed who’s buying the stuff?

We’re letting Europe (especially the Ukraine) get out from under the Soviet Union Russian boot, regarding energy! Which cuts Putin’s influence, and increases ours. For this alone, it’s worth it.

ReggieA on January 5, 2016 at 2:44 PM

Bottom Line: When the guvment gets outta da way, good things happen…

More US well-paying jobs… in the field.
More US well-paying jobs… in transport to the docks.
More US well-paying jobs… at sea.
New US infrastructure and port enhancements = more US jobs.
Lower world market prices.
We take away market share from Russia, Saudi Arabia, etc.
Refiners get the crude type they need, raising utilization and lowering prices on diesel, gas, etc.
Lower prices spur new technology advances and research of such = more US jobs.
Our balance of trade is significantly improved.
The value of the Dollar as world currency is enhanced.
The loyalty of our allies who buy oil from us is strengthened.

What’s not to like?

Jumpintimmy on January 6, 2016 at 9:42 PM