Connecting The Dots

This is a "cut and paste" from a post that I am working on. But this is quite incredible.

RBN Energy:  Wow, talk about a timely post from RBN Energy today. The lead story in Section B of The WSJ today: US refiners export more fuel than ever.

U.S. refiners are selling more fuel abroad than ever before, effectively exporting the American energy boom to the four corners of the world.

As crude production soars in places like the Eagle Ford shale formation in Texas, U.S. refiners along the Gulf Coast are increasingly using local oil, which is less expensive than the North Sea crude that European refiners use. That often means diesel and other fuels made in the U.S. are a bargain abroad even after adding the shipping costs.

While federal law bars overseas shipments of most U.S.-produced oil, refiners can export petroleum products created from that crude, including gasoline, diesel and jet fuel.
In July, U.S. refiners shipped a record 3.8 million barrels of products a day to places as far flung as Africa and the Middle East, according to the latest monthly data from the Energy Information Administration. That volume is nearly 65% above the 2010 export level, when the U.S. oil boom was still in its infancy.

And then this from RBN Energy:  This is the third in a series on the fuel oil industry in Houston. This sounds like a niche industry, and seems a bit unrelated to the Bakken, but it doesn't take many dots to connect what is going on. To put some of the numbers in the linked article in perspective, remember that Cushing has about 35 million bbls of storage capacity, and that the southern leg of the Keystone XL, due to open next month, will flow 5 million bbls/week.

The BOSTCO Terminal started operations this week on the Houston Ship Channel. By early next year (2014) the terminal will have 6 MMBbl of storage capacity. This $500 Million investment by two midstream companies is designed to meet the expanding needs of fuel oil blenders at the Gulf Coast. Before the first phase could be completed, 900 MBbl of additional refined product storage planned for phase two, was snapped up by Morgan Stanley for distillate fuels. Today we describe the terminal facilities and ownership structure. 

This is the third installment in our series covering fuel oil infrastructure on the Gulf Coast.

Disclaimer: this is not an investment site, and I constantly remind folks not to make any investment decisions based on what they read here, or what they think they may have read here, but it is incredibly clear what is happening in the US. The center of gravity for global energy has moved to the US. Saudi and Russia have oil and natural gas, but the US now outproduces both Saudi Arabia and Russia, but equally important is the entrepreneurial spirit; free market capitalism; banking resources; free flow of capital; in America.