It's All About Crude Oil Exports -- January 13, 2016

This is truly coincidental. Yesterday I posted a note updating the location of the first ship carrying US crude oil to Europe under the recently relaxed crude oil export rules. Today, on the front page of the on-line edition of the Wall Street Edition (possibly the third page of the print edition) is a long article on that first shipment, as well as a second shipment. And the story is accompanied with a graphic showing the distance from Texas to Trieste (Italy), exactly what I did (except I did it from Miami, FL, to Naples, Italy, for other reasons); and the current location of the tanker, which I also did (based on information freely available).

From the linked article we also learn that the ultimate destination is not Switzerland but rather Bavaria, southern Germany where there is a refinery located between Munich and Nuremberg. We also learn, for what it's worth, that the oil was pumped from around Karnes County, TX, 60 miles south of San Antonio (Eagle Ford).

Also coincidentally, I guess one could say, RBN Energy has a great piece on the huge new export "facility" that is being developed along the Louisiana coast. It's an update of LOOP -- get prepared to read a lot more about that port as the years go by.

And there's another first with regard to US exports. For a bit of off-beat news with regard to natural gas exports, FuelFix is reporting that tugboats left useless by US shale boom finally have a job to do:

Somewhere in the Gulf of Mexico right now, the Energy Atlantic is headed for Louisiana to collect an historic cargo: the first exports from America’s shale gas revolution.

Waiting to steer the giant tanker into Cheniere Energy Inc.’s $15 billion Sabine Pass terminal is a fleet of tugboats that’s spent the past seven years killing time — some days holding emergency exercises, some days racing each other. They were all set to escort shipments of natural-gas imports, but the ships never arrived: unexpectedly, the U.S. started producing enough gas of its own.

“The boats are beautiful — you could eat off the floor in the engine room,” said Richard Ennis, head of natural resources at ING Capital. With the switch to exports, the tugs will at last have a job to do — even if it’s not the one they expected. They “may actually get a scratch on them,” Ennis said.

The surge in oil and gas output from U.S. shale drillers has the potential to transform world markets. At home, it’s left a chain of idle import facilities from the Northeast to the Gulf Coast, as energy companies pile onto the export bandwagon instead: $50 billion-worth of terminals are due to come online in the next five years.