Caught up with the CEO of ConocoPhillips today, here’s an overview of what he had to say:
http://gcaptain.com/conocophillips-ceo-calls-urgent-end-crude-oil-export-ban/
What do you all think? Should the export ban be ended? why/why not?
of course he would…he runs a large corporation who’s only concern is profits for shareholders and in no way concerned with the health of the nation!
What do you all think? Should the export ban be ended? why/why not?
NO! As long as we import one barrel of oil from foreign sources, every barrel of US produced crude should remain in the US
BUT! If we do export any crude, it should be in US flagged tankers (they don’t have to be Jones Act but do need to fly the Star and Stripes off their fantails)
[QUOTE=c.captain;152004]of course he would…he runs a large corporation who’s only concern is profits for shareholders and in no way concerned with the health of the nation!
NO! As long as we import one barrel of oil from foreign sources, every barrel of US produced crude should remain in the US
BUT! If we do export any crude, it should be in US flagged tankers (they don’t have to be Jones Act but do need to fly the Star and Stripes off their fantails)[/QUOTE]
I agree 100%. COP is a good portion of my portfolio but any departure from current law should bolster U.S. shipping. An increase in refining capacity would go a long way also.
I don’t think requiring U.S. flagged tankers for the shipping of U.S. crude is feasible. If you’re going to put that requirement on crude, why not say the same thing for U.S. refined products? The reason is, it’s a global market. If you’re going to take a U.S. flagged tanker from Galveston to say Korea, what are you going to do when it gets there? Send it back to the U.S. empty to pick up another cargo?
The economics of that don’t work.
Listen, I’m not anti-US flag by any means, I would love to see a more robust U.S. merchant marine. I’m just being realistic.
[QUOTE=rob;152017]I don’t think requiring U.S. flagged tankers for the shipping of U.S. crude is feasible. If you’re going to put that requirement on crude, why not say the same thing for U.S. refined products? The reason is, it’s a global market. If you’re going to take a U.S. flagged tanker from Galveston to say Korea, what are you going to do when it gets there? Send it back to the U.S. empty to pick up another cargo?
The economics of that don’t work.
Listen, I’m not anti-US flag by any means, I would love to see a more robust U.S. merchant marine. I’m just being realistic.[/QUOTE]
a crude carrier will not load a cargo in Korea. It will sail in ballast to it’s next loading port which could easily back in the GoM and why is a idea of a US flag crude carrier in international trade so abhorrent anyway? Because one wouldn’t be as profitable for owners is the only reason…enough with supporting corporate profits over benefiting our nation
[QUOTE=injunear;152005]I agree 100%. COP is a good portion of my portfolio but any departure from current law should bolster U.S. shipping. An increase in refining capacity would go a long way also.[/QUOTE]
+1 agreed, tho the need for us to increase our domestic refining and storage is a WHOLE other discussion.
I’d have to agree with Rob too but if we were reintroducing refined product back into the US domestic market couldnt we the vessels ship it back too?
[QUOTE=c.captain;152019]a crude carrier will not load a cargo in Korea. It will sail in ballast to it’s next loading port which could easily back in the GoM and why is a idea of a US flag crude carrier in international trade so abhorrent anyway?[/QUOTE]
Valid point c.captain.
Ok, so what do the charterers say about all this? We’d like to hear from you.
Crude carriers travel in ballast quite often. Not a crazy idea. A Panamanian flagged tanker will load what after discharging in Korea that an American one wouldn’t?
Ain’t you guys forgetting a few important things?
- The availability or rather the unavailability of an US flagged ship. The US simply does not have ships to carry this oil.
- The added Panama Canal costs.
- The costs of a US manned ship v/s foreign crewed.
This article will, for most part, explain/clarify everything:
[ATTACH]4148[/ATTACH]
In case, the attachment does not work, the link: Shipping U.S. Crude Oil by Water: Vessel Flag Requirements and Safety Issues
For this to really work, the US deep sea sailor has to be tax exempt.
If you are required to transport it by U.S. flag ships, the tonnage will be built.
Don’t ship the oil through the canal, plenty (most) crude oil bypasses the canal.
Bullshit on everything else, because the requirement to do so, we have US ships/Mariners to do everything else. Crude should be no different. If they want to export that oil it should be on US bottoms.
A friend of mine noted that the U.S. does not have a “natural resource management plan” which addresses how the country plans to manage the lifespan and profits from oil production. My response:
I think it’s important to also realize that we have a couple options - either we import oil from the middle east, west africa, venezuela and elsewhere, or we produce it ourselves. Right now we’re choosing the latter - because we can. In 1970, U.S. oil production peaked at 11 million bbls/day. It fell to 7M bbls/day in 2009 and is now up to 10 million bbls/day, meeting a significant portion of our domestic needs. By 2020, experts predict we’ll be producing upwards of 12 million bbls/day.
Wells “dry up” on a regular basis and we continue to drill for more oil, it’s the nature of the beast, but we also utilize new technology to get more oil out of existing wells - such as fracking and horizontal drilling. We may not have a natural resource management plan (I don’t know if we do or not), but I don’t know if that’s really the issue. We have at least century’s worth of natural gas alone in the U.S. - probably more, and deepwater fields hold more oil than we could possibly imagine - probably more enough to effect widespread climate change unfortunately. The answer will be renewables, clean energy of some sort, and/or vast improvements in efficiency in order to save this planet.
Running out of hydrocarbons is very unlikely I think.
[QUOTE=smoker;152033]Ain’t you guys forgetting a few important things?
- The availability or rather the unavailability of an US flagged ship. The US simply does not have ships to carry this oil.[/quote]
it is perfectly acceptable for a foreign built crude carrier to be US flagged although it would not have coastwise trade privileges. Reflagging foreign ships to US happens all the time…having been with Maersk you know this.
- The added Panama Canal costs.
not too many crude oil carriers use the canal but for those which might, there is no difference in tolls paid
- The costs of a US manned ship v/s foreign crewed.
they are more to be sure but that does not mean such crude oil carriers could not be run profitably…just not as profitable but I say if there were a US flag mandate to carry US crude exports, then if the operators want the business they’ll take it with the flag. Hell make MSP available to these new crude carriers to make the crew cost burden a little less painful for the operators. That would be fair.
For this to really work, the US deep sea sailor has to be tax exempt.
No it doesn’t at all but I am not against making US mariners in foreign trades exempt from paying taxes but the owners would use that to pay less so in the end, the mariner would not get any benefit from that but the owners will get plenty.
[QUOTE=z-drive;152035]If you are required to transport it by U.S. flag ships, the tonnage will be built.
Don’t ship the oil through the canal, plenty (most) crude oil bypasses the canal.
Bullshit on everything else, because the requirement to do so, we have US ships/Mariners to do everything else. Crude should be no different. If they want to export that oil it should be on US bottoms.[/QUOTE]
I would have to say BS to your entire post, simply because you’re looking at it from a sailor’s point of view v/s a trader’s point of view.
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You seriously think that an Aframax/Suezmax tonnage can be built overnight, by the few capable and already overloaded ship yards?
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Do you even know how uneconomical the price of US steel is versus steel available overseas? An e.g. A lb of imported rebar, landed in US after paying all taxes, is approx $24/lb v/s US made rebar which ex-mill is around $36/lb. You don’t need ore to make a rebar, but recycled scrap. At last count, there were 5 mills I knew in US making rebars. Now, how many mills making specialized steel plates? Arcelor is the ONLY mill in USA which has been approved by Lloyds. You want to take a guess as to how much they charge for their monopoly?
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Read the .pdf file and go through what it costs to ship 1bbl within USA v/s what it costs to ship it from overseas. Will leave you depressed.
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The Mid-East/Far-East is the most heavily traded and competitive route. What makes you think that the existing owners with cheaper hulls will allow US to muscle into their market & business? OPEC has made it very clear that they won’t allow, haven’t they? Now, add ship owners to this mix. The Panama Canal was built for a reason. Going around it costs both money and time. Why would anyone buy from US Gulf when cheaper crude is available and faster?
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Read the article again. The US has all of 11 ships. Which may also include the 2 Maersk line US flagged tankers. Crude is just another commodity and when cheaper crudes are available, nobody cares whether its Russian or Mid-East. The US, if it wants to compete internationally, people are going to ask for parity in prices. How are you going to achieve that on expensive hulls manned by an even costly US manpower and taking even longer to deliver it? A ship sailing to Mid-East or the Reliance refinery at Jamnagar will have reached, loaded and turned around before a ship has even finished loading in the US Gulf. So, how are you going to compete with US crudes on US ships manned by US crew, all which you think are exceptional?
There is a reason why McCain keeps going after Jones Act. Allow the US ship yard to import in cheaper steel, allow foreign made ships to be US flagged to carry US crude internationally ONLY and make the US deep sea sailor tax exempt and things become more competitive. A foreign licensed and experienced sailor earns almost the same as a USCG licenced sailor does, post taxes.
If you were the owner/operator with millions invested and at stake, plying an US made, flagged & manned ship on international trade would be committing suicide. Your emotional rationale, not withstanding.
[QUOTE=injunear;152005]I agree 100%. COP is a good portion of my portfolio but any departure from current law should bolster U.S. shipping. An increase in refining capacity would go a long way also.[/QUOTE]
Agree re: refining capacity. That’s also a national security concern.
Smoker…
you and I agree on much but with this issue we are miles apary I am afraid.
If the US must import crude why export any? Profits for producers is the answer.
Now why should I be concerned more about the profits made by oil producers than I would be for American mariners or the entire nation!
it’s really just that simple
[QUOTE=c.captain;152046]If the US must import crude why export any? Profits for producers is the answer.[/QUOTE]
It’s not the producers that profit in this case, it’s the traders. The only reason we would import crude is because it’s cheaper than getting it elsewhere.
[QUOTE=c.captain;152046]Smoker…
you and I agree on much but with this issue we are miles apary I am afraid.
If the US must import crude why export any? Profits for producers is the answer.
Now why should I be concerned more about the profits made by oil producers than I would be for American mariners or the entire nation!
it’s really just that simple[/QUOTE]
I am afraid that you’re wrong on this, in the sense that I completely agree with you that US oil should NEVER be exported. Maybe, it’s because, my parents having witnessed shortages, impressed upon me the meaning and importance of savings.
My argument was for those who are for US made and manned ships and I’m simply giving a trader’s view why that is untenable. As a commodities dealer, as much as I’ve SERIOUSLY tried to export US made metal, I have failed, for these 2 simple reasons:
- The cost of US made steel, and even after over coming that hurdle
- I’ve never, NEVER been able to over come the outrageous shipping + transportation costs.
For the record, I am pro-Jones Act, even though I’ve been at the receiving end of it. I understand the importance of having a cabotage law. But, being a trader, also allows me to see the other side of the coin and that is, how the US Steel industry, one of the most protected industries in USA, coupled with the monopoly of power supplying cos as well as the expensive inland transportation, is making the economics of ship building in USA, very expensive.
Also, if US oil has to be exported, then the billion $ subsidy that each oil co gets per year, should be refunded back to the tax payer. An oil co should not be allowed to keep that subsidy as well as selling subsidized oil at international prices on the international market and still charging the US tax payer international prices.
There is one serious question for the average person…Exactly WHAT is in the US National interest about exporting our crude ? Seriously.
Crude, once consumed, cannot be replaced. Ever. Last I checked, US absolute and per capita oil consumption was still the highest on Earth, so it isn’t exactly going out of style.
Why would we sell something in finite supply, that we use more of than anyone else, and when we burn thru what we’ve got, we will simply have to import from places that only cause trouble.
Naw. I don’t get it and any high and mighty speechiftying think tank research and policy group palaver is only a smokescreen to cover up who is robbing us.
Enough already. There won’t be any jobs for you and me and anyone we could ever point to come out of all of this. Oh, there’s them that will say jobs will fall like manna from heaven as a result of lifting the export ban. Is anyone here old enough to remember WHY we have an export ban ??
Be an American for the love of God. Tell 'em to go piss up a rope.
[QUOTE=rob;152048]It’s not the producers that profit in this case, it’s the traders. The only reason we would import crude is because it’s cheaper than getting it elsewhere.[/QUOTE]
Rob, ALL oil producers have their own privately held trading desks, both for oil and shipping, and they ALL trade in spots as well as futures. They’re the ones who make the MOST money as they also own the product. That’s why Shell’s share price went down when it misstated their reserves. Same goes for iron ore producers, steel manufacturers, etc. In today’s world, you can’t trade if you don’t own, simple. Notice all the traders chartering VLCCs, etc to store their oil?
I want desperately to reply to these last four posts but all I have at the moment is my puny smartphone and sausage fingers…gonna be back soon