[Pops]

Enterprise Products Partners (EPD.N) is now considering two options to move the glut of crude oil landlocked in Oklahoma down to Gulf Coast refineries.

Enterprise, the largest publicly traded midstream energy service company in the nation, confirmed on Wednesday that it is in talks with partner ConocoPhillips (COP.N) to buy them out of their 50 percent stake in the Seaway pipeline."

High levels of oil inventories in the Cushing, Oklahoma, delivery hub have pushed the U.S. benchmark West Texas International crude price to trade recently at more than a $25 discount to North Sea Brent and other U.S. crude grades, making the first pipeline to move crude imperative to narrowing the price gap.

http://uk.reuters.com/article/2011/11/0 ... SF20111102

This will drain the "glut" of tar oil in the MId-continent out to the GOM where it will be priced on the world market. Currently the midwest refiners are buying that oil at a discount but selling finished product as if it were the same price as the world market, pocketing the difference. Enterprise obviously wants that position.

No real difference to consumers, the largest effect probably is to make it easier for China to get their oil out of Canada and N. Dakota.

[babystrangeloop]

No real difference to consumers, the largest effect probably is to make it easier for China to get their oil out of Canada and N. Dakota.

Current export regulations prohibit the export of domestically produced crude oil under the terms of the Energy Policy and Conservation Act (42 USC 6212) and other federal laws. Refined products are exportable AFAIK.

[Rod_Cloutier]

I sometimes wonder what the sub-text is on all this, 'lets attack Iran soon' by Israel and the US is? The pre-text of attacking Iran could be a convienent ploy to cover up rising oil prices, to provide the masses a scapegoat for a rapid shootup of oil prices.

Just like they papered over and avoided the real issues of the financial crisis, they could paper over a oil crisis with an unnecessary war against a hapless 3rd world oil country.

[copious.abundance]

What this might do is narrow the spread between WTI and Louisiana Light Sweet Crude, while having little impact on Brent. Maybe.

[Cog]

So more expensive oil? Very nice.

[Pops]

No real difference to consumers, the largest effect probably is to make it easier for China to get their oil out of Canada and N. Dakota.

Current export regulations prohibit the export of domestically produced crude oil under the terms of the Energy Policy and Conservation Act (42 USC 6212) and other federal laws. Refined products are exportable AFAIK.

You're right.

[PeakOiler]

And here's the graph of just US oil exports:


So where is the exported oil going? Canada? Mexico? Japan? et.al.? I haven't learned that yet. Does the EIA tell us anywhere on their website?
http://www.eia.gov/dnav/pet/hist/LeafHa ... REXUS2&f=W

Perhaps the Excel file gives that info.

[Pops]

I think lots of unleaded goes to Mexico and distillate to the EU

[PeakOiler]

I think lots of unleaded goes to Mexico and distillate to the EU

I agree with that, but where is the 36 thousand barrels per day of US exported OIL going to? I guess I need to do a little more web browsing.

[PeakOiler]

I found the EIA reference that answers my question:
http://www.eia.gov/dnav/pet/pet_move_expc_a_EPC0_EEX_mbbl_m.htm

[PeakOiler]

I downloaded the Excel file on US Oil Exports-By Destination. Interesting data. I made a graph of the total US oil exports:



Japan, Korea, China, Taiwan, and Canada were big buyers of US crude in the mid-to-late 90s. I guess they were getting a lot of Alaska's oil. Hard to say. It appears the EIA wasn't keeping track of the receiving countries when the North Slope came on-stream. Now it's pretty much just Canada. (What? Aren't those oil sands providing enough oil for their own country?)

At any rate, the data are interesting in that it provides an export model. Kinda. The pipeline for WTI may not change the oil exports from this country, but I suspect it may change the oil products this country exports. The value-added products...

[babystrangeloop]

I found the EIA reference that answers my question:
http://www.eia.gov/dnav/pet/pet_move_expc_a_EPC0_EEX_mbbl_m.htm

Yeah, I think Canada is grandfathered-in on some trivial amount of Alaskan crude oil.

[evilgenius]

No real difference to consumers, the largest effect probably is to make it easier for China to get their oil out of Canada and N. Dakota.

Current export regulations prohibit the export of domestically produced crude oil under the terms of the Energy Policy and Conservation Act (42 USC 6212) and other federal laws. Refined products are exportable AFAIK.

Imagine the war that we would start with any Middle Eastern country if they developed enough to write a law like this! All the same the West claims to be backing them. I wonder if we back them like most men back independent women, on the surface but always with the idea that she will do the housework.

[copious.abundance]

Some North Dakota oil is exported via pipeline to Canada, only to be re-imported back into the US. The pipeline system up there just makes it logistically easier, for the time being at least. I suspect that's where a lot of those Canadian exports are going to (though certainly not all). Notice there's a bit of an uptick in exports to Canada after 2008, which is when the ND Bakken picked up steam.



Ideally, one would be able to track this just by looking at oil imports from Saskatchewan and comparing them to the export graph above, but unfortunately the data doesn't get that detailed.

EDIT: Now that I think of it, I recall reading a couple years ago that there's a rail oil-loading facility in Saskatchewan (or Manitoba?) that a lot of drillers in ND use to unload their oil. So the trucks from ND go to the border, report their freight at the border crossing and so it gets counted as an oil "export," but then they take it to the rail facility where they unload it, and the trains just go back down to the US. They recently opened a big new rail-loading facility somewhere in western ND so maybe the exports to Canada will go down.

[Keith_McClary]

http://uk.reuters.com/article/2011/11/0 ... SF20111102

That article is very confusing, is there a map that shows all the pipes?

[Pops]

All the pipes?



Here is Seaway:

[Tanada]

Two years later I would say Pops is right on target, the WTI glut is fading day by day and soon we will be back in the global market pricing dominance we had before the tight shale boom.

[ROCKMAN]

Good point. Obviously Pop understands the time lag. The system always responds...just takes the amount of time required to make those changes. When there are $billions at stake the motivation is there from day one. All it takes is TIME and changes will be made. I still suspect that 99% of Americans (bombarded with news of all that new Eagle Ford Shale production) would be shocked if they knew how much was been shipped to eastern Canadian refineries because that's what the economics dictate. They've just reversed another pipeline to get more of it to the terminals at the port of Corpus Christi. They would probably also be outraged at the little trick EFS producers use to bypass govt restrictions on exporting oil: they do a quick and dirty pseudo cracking so they aren't technically exporting oil but are sending “refined products” to Canada which don't fall under fed authority. Another example of “if there’s a way to make a buck we’ll find it”.

[Pops]

I kept meaning to take some pics of the new pipeline that is going in just about 50' from the corner of my property. It's in addition to the CONOCO pipe that carries product from down by Tulsa to my area. It's maybe 18". I'm pretty sure it doesn't go farther, I was told that back in the day it went all the way to Chicago. Quite an operation but I procrastinated too long and it's done and buried now.

Also on the way up Kansas a couple of weeks ago we caught sight of the big Missouri Pipe going in around Emporia it's much bigger, maybe 2-3 feet in diameter.

[Loki]

Another example of “if there’s a way to make a buck we’ll find it”.

Why do you hate America so much Rockman Seriously, we should put that on our currency instead of "In God We Trust." It'd be a lot more honest.