♠ Posted by Emmanuel in Energy
at 3/15/2016 04:07:00 PM
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| Salvo #1 in Liquid American Freedom: resuming US oil exports after four decades. |
Given such a scenario, the US was faced with the enviable problem of what to do with so many energy reserves. In 1975, the midpoint of the decade of two oil crises, US lawmakers passed a law that prohibited US energy companies from exporting. Before Christmas last year, however, American lawmakers made the commonsense move of lifting the ban as the US situation has turned from one of a shortage into a surplus because of the aforementioned fracking. It's still a net importer of the stuff, but much less so nowadays.
Shortly after the law was lifted in December of last year, a tanker leaving from the Gulf of Mexico bound for France made portents of what is to come:
The sea stretched toward the horizon last New Year’s Eve as the Theo T, a red-and-white tug at her side, slipped quietly beneath the Corpus Christi Harbor Bridge in Texas. Few Americans knew she was sailing into history. Inside the Panamax oil tanker was a cargo that some on Capitol Hill had dubbed “Liquid American Freedom” -- the first U.S. crude bound for overseas markets after Congress lifted the 40-year export ban.Aside from the US signaling more competition in the oil market--OPEC countries, Canada and Russia watch your backs--the Yanks also set to deliver liquefied natural gas (LNG):
It was a landmark moment for the beleaguered energy industry and one heavy with both symbolism and economic implications. The Theo T was ushering in a new era as it left the U.S. Gulf Coast bound for France. The implications -- both financial and political -- for energy behemoths such as Saudi Arabia and Russia are staggering, according to Mark Mills, a senior fellow at the Manhattan Institute think tank and a former venture capitalist. "It’s a game changer," he said.
Meanwhile, the U.S. is also poised to make its first shipments of liquefied natural gas, or LNG, from shale onto world markets within weeks, about two months later than scheduled. Cheniere Energy Inc. expects to have about 9 million metric tons a year of LNG available for its own portfolio from nine liquefaction trains being developed at two complexes in Texas. That’s enough to power Norway and Denmark combined for a year.Deserved or not, the perception goes like this: Why buy oil from Iran, Iraq, Libya, Russia or some other country with high levels of "political risk" that jeopardize delivery when the rather safer US can sell you the same stuff at the same price? That is, the US isn't going to be overrun by revolutionaries or use energy as a "weapon" anytime soon:
What’s already clear is that even with crude losing about 70 percent of its value since the middle of 2014 amid a worldwide production glut and a slowdown in Chinese demand growth, buyers are happy for the chance to diversify their sources of supply.America's back in the game, and something that it can deliver that developing country exporters cannot is surety that the USA will likely be around as a a supplier in the near future, come rain or shine.
“If you’re a buyer in, say, South Korea, and you’re offered the same price from Saudi Arabia, Russia and the U.S., you’re going to make the obvious choice: the U.S.,” Mills said. “It’s the one supplier you know is never going to threaten you or cut off supplies, which is certainly not the case with Saudi Arabia, Russia or Iran.”
