With U.S. production growth for oil and natural gas out-pacing refining capacity and domestic demand, respectively, the United States is on a path to assume a position among the largest global exporters of both commodities over the next few years.
The report’s authors note that, because of a growing mis-match of domestic production growth to U.S. refining capacity, incremental production volumes of oil will essentially all be exported through the year 2025 and beyond. Virtually all incremental U.S. production during that time frame will be in the form of light, sweet crude from shale plays like the Permian Basin, the Bakken Shale and the Eagle Ford Shale, a mis-match for domestic refineries set up largely to refine heavier grades of crude coming in from Canada and other exporting countries.
As of February 2018, the United States ranked as the 7th largest crude exporting country , shipping about 1.6 million barrels of oil per day (bopd). DrillingInfo projects that export volume will double to 3.36 mmbopd by 2020, and grow by another 45% to 4.84 mmbopd by 2025. That volume of exports would rank the U.S. third among current exporting countries, behind only Saudi Arabia and Russia.
DrillingInfo anticipates that the majority of those incremental exports will move out from the burgeoning Port of Corpus Christi, which currently handles more than half of the country’s crude exports. This is largely due to the Port’s proximity to the Eagle Ford Shale and Permian Basin, which are currently providing most of the country’s production growth.
This obviously anticipates that the long-awaited project for the Army Corps of Engineers to deepen the Port’s main channel will ultimately be fully funded and move forward. While congress has been negligent in allocating such funds, the Port itself approved a plan earlier this year to take on debt for the first time in its history in order to get that project kick-started. So, the Port is intent on gaining this market share, and its advantageous location and comparatively low traffic level gives it an edge over other major Gulf Coast ports.