Analyst: Pipeline Projects Key for Canada to Win N. America Oil Export Race
We are talking about the ability to export at least 2 million bpd – assume US$100 per barrel world crude oil price and one gets a magnitude of the revenues at stake. We are talking about billions of dollars in tax revenue and the ability to develop multiple oil sand projects in Alberta, requiring manpower and capital, such as pipes, services, housing and food.
Rigzone: How would you characterize the cost to the US economy in terms of losing first-mover advantage for North American crude oil exports?
Rositano: The U.S. recently approved the export of liquefied natural gas (LNG) from facilities to be built in the Gulf, East and West Coast areas. Customers in Europe and Asia have already committed to taking LNG volumes from facilities to be built. The economy suffers when the optimal use of resources is not permitted. Refiners in the U.S. have been able to process increasing volumes of oil shale crudes from Eagle Ford and Bakken. However, the ability to process ever-increasing volumes of these crudes is reaching its zenith. Product exports from the U.S. will now be competing with new export-oriented refining capacity in the Middle East and Asia and new capacity in Latin America that could cap product import levels in this area. The option to export crude oil and adjust to a rapidly changing U.S. energy landscape is key to optimizing activity in an economy still struggling to recoup job losses from the last recession.
Rigzone: Would you like to add any comments?
Rositano: There have been recent discussions with the Obama administration and oil shale producers concerning the possibility of allowing super-light condensate exports. Some refiners have admitted that there is an excess of this super-light oil that has resulted in operational challenges at their refineries and have caused them to reduce runs. Exporting super-light condensate would be an excellent first step on which the U.S. could take the lead in terms of crude oil exports.