US needs to increase infrastructure investments to tap into the export market for oil and gas

UPI:
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The United States is now an oil exporter, though infrastructure necessary to move the oil to the market can't keep up with production trends. A report from consultant group IHS Markit found it was the lack of infrastructure, not the lack of spending on exploration and production, that presented a growth challenge for the U.S. energy sector.

Last week, officials at the Port of Corpus Christi said they secured nearly $23 million from the U.S. Army Corps of Engineers to help deepen and widen the waterway. More funding is expected for a project slated for completion by the early part of the next decade.

Sandy Fielden, the director for oil and products research at Morningstar, told UPI that new pipelines from inland shale basins will increase the flow of crude oil to the port by more than 1.5 million bpd by the second half of next year.

"Without the channel improvements the Port of Corpus Christi seeks, the next congestion point will invariably be export docks at Corpus," he said during the weekend.

A report from the U.S. Energy Information Administration found export levels are increasing even though terminals on the southern U.S. coast can't load the largest types of carriers. Those vessels, dubbed Very Large Crude Carriers, are the most economic for crude oil transportation.

"The inability to fully load larger and more cost-effective vessels has pricing implications for U.S. crude oil exports," the EIA's report read. "Using a number of smaller ships requires a wider price spread between U.S. crude oil and international crude oil prices to compensate for the lower economies of scale."

The spread is the difference in price between West Texas Intermediate, the U.S. benchmark, and Brent, the global benchmark. The spread as of Monday morning was $9.48 per barrel with the premium for Brent.
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The revenues losses are significant.  Larger ships that would justify the world price can load a million barrels or more of crude as opposed to the 500,000 limit ships used now.  That is roughly $5 million a shipload being lost because of lack of infrastructure and it is also lost revenue to the government from the taxes that would have been collected on the $5 million per shipload.

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