Quote:
Originally Posted by Whynotnow
Sure, but who is paying for these new pipelines and exports and who’s taking the oil. Exports east really don’t get you much in terms of putting heavy in the water. There’s no market. Exports west for heavies and Asia has some appetite, but you need to build like 4.5 million of export capacity to displace the Us. What company is building that? What comoany(s) are signing the 25-30 year agreement to underpin it? Is the government building it?
Refining more here isn’t the answer, refining is mostly done as close to the consumer market for lots of good reasons. I guess we could build more upgrader capacity to produce more syn so we wouldn’t habe be the heavy issue it same questions? Who’s building the upgraders?
I just don’t see a path to building out more export capacity in a substantial way and all the people sayign it’s the solution can’t explain the economics to me.
|
I think you greatly underestimate the global market outside the US for cheap energy. We sell our product to the US at massive discounts. The WSC differential, though reducing in recent years, is still $14. We still sell LNG at $4. 14-15 in EU. I'm not suggesting these are the final prices for US alternatives, but I think it's surely an attractive proposition.
I also don't agree you necessarily have to replace 4.5million/d. Obviously you want to get as close as possible, but if we are getting squeezed enough at one end to make the switch (if we even had that ability), I don't think we are comparing apples to apples at that point.
As for who's underpinning it, that's the biggest hurdle. No question about that. I do think we are more likely to have suitable, willing contenders if the government wasn't so hostile towards the idea. But again, I don't want to make it seem like you can snap your fingers and it's done, and there aren't challenges. But I have to believe these projects got to where they were at, prior to being scrapped, because there is at least a compelling business case. Would full government support have caused a successful result? I don't know, but I'd like to think so.