U.S. oil-export projects stall as output slips, opposition builds
By Laila Kearney
NEW YORK (Reuters) - The coronavirus pandemic has stalled a once fierce race between energy companies to build deep-water oil export terminals off the coast of Texas as delays and mounting environmental opposition have allowed it.
Only three of originally a dozen offshore oil export proposals on the US Gulf Coast remain before the federal maritime authorities. They are operating slowly as the coronavirus lowered global fuel demand and the torrent of U.S. shale fields subsided, analysts said.
"While these projects are on the agenda, they are more or less pending as there is already more than sufficient export capacity in the current crude oil price environment," said Andrew Lipow, president of consulting firm Lipow Oil Associated.
U.S. oil production has declined 18% and crude oil prices have fallen 35% this year, reducing demand for new export ports. According to US data, daily US crude oil exports slowed to 8% by July from 46% a year earlier.
US crude oil exports https://graphics.reuters.com/USA-CRUDE/EXPORTS/bdwpkkwbdpm/chart.png
The Bluewater Texas Terminal, a joint venture between Phillips 66 oil refiner and dealer Trafigura, has not yet been finally approved by the partners. Phillips 66 spokesman Rich Johnson said the companies will continue to provide information for the required permits.
The Sea Port Oil Terminal, backed by Enterprise Product Partners LP and Enbridge Inc, is no longer expecting federal permits this year, said Rick Rainey, spokesman for Enterprise.
The approval reviews proposed by Sentinel Midstream LLC and Freepoint Commodities LLC for the Texas GulfLink deepwater port have also been suspended. Sentinel was not immediately available for comment.
CALL FOR PUBLIC HEARINGS
While the growth in crude oil exports has slowed, environmental opposition to the major proposals has increased. Environmentalists have asked federal regulators to suspend reviews until the pandemic fades and public hearings can take place.
The Sierra Club recently filed a letter signed by 22,400 people to the Maritime Administration against the Bluewater Terminal. It and other groups have also rallied opponents for Enterprise's SPOT terminal.
"There's a lot of resistance in the community to these projects," said Devorah Ancel, a Sierra Club attorney, who said many of those who oppose the projects are Texas-based. The groups reject the projects, saying that they could lead to oil spills in the ocean and are not needed.
There is no export terminal in Texas that can directly load supertankers, ships that can carry 2 million barrels of oil. Smaller ships are loaded with oil that is transferred to larger ships further out at sea. One method that advocates of deepwater ports argue is costly and increases shipping traffic.
When the Permian Basin in Texas and New Mexico increased U.S. crude oil production up to 13 million barrels a day, pipeline companies with shale oil supplies jumped into the deepwater terminal race.
"The reality now is that there are too many Permian pipelines, the demand is insufficient, and the urgency has eased," said Sandy Fielden, oil and gas analyst with financial services firm Morningstar.
He suspects advocates will slowly move the projects forward.
"When the export market recovers and crude oil production rises to a higher level than at the end of last year, there is obviously a market for these terminals," said Fielden.
(Additional reporting by Julia Payne in London; editing by Marguerita Choy)
You should check here to buy the best price guaranteed products.
First Casualty by Toby Harnden review: this is Afghanistan's Black Hawk Down
Boat captain who lost everything to Ida dedicates his time to helping others
South Dakota man recycles his collection of a million aluminum cans to raise $105K for Make-A-Wish
Trump pushed back when Lindsey Graham asked him to 'repair the damage' with Pence after January 6 riot: book
Minnesota police group says a man claiming to be Derek Chauvin's bodyguard 'never spent one minute' with him
Kyrie Irving Addresses Rumor He Would Retire If Traded by Nets