Hi yard man,
Yes the refineries in the midwest are designed to use Canada's heavy tar sands oil. Pipelines to Illinois are already built. The EXCEL pipeline was an effort to take the heavy crude South to the Gulf refineries. Obama and Biden killed it with delays and environmental excuses.
Canada has now built out the Trans Mountain pipeline going west for export to China Asia, and Japan markets. Canada wanted this, to reduce the large discounts the US extracts via fostering competitive bids from other than the US.
Refineries in the Gulf of America are already built to use heavy crude like Venezuela only has. All shale oil is light oil and it has plateaued already by some experts. Longer laterals now to 3 and 4 miles are producing more oil production and lasting longer, but geology laws of depletion look to now have a reducing impact on all shale sectors including the largest (Permian).
New drilling innovations are still reducing the cost, but once half of the barrels have been drawn out, the depletion of the old wells collectively caps the total production. New wells will equal the depletion of all of the wells and production peak is reached. As shale fields mature, they produce less crude and become more gassy - the pipelines from the Permian will ship more and more gas to the liquefaction plants along the gulf Coast. Another great plan.
I disagree with her view only in that heavy crude does have asphalt and bitumen, but I've read it also produces a lot of diesel. Diesel is in short supply and can be exported to Europe and/or used in our near shoring construction boom that is just beginning. Another great plan.
Venezuela's oil coming to the US exclusively is a boom for CVX, XOM, COP. All who have refineries in TX,and LA that are designed for heavy crude. US shale and Guyana are lighter crudes. So the Venezuela crude is a great fit for the US refiners.
Military demands for diesel are always high during wars.
It will create demand for ship building if we are to deliver refined products to the world.
It is a good plan for the US to become energy dominant.
It also keeps us from becoming China reliant - the bigger picture in Trumps long term plan for the US!
It's a powerful plan.
The so called "glut" in oil will not be impacted.
Tens of Billions will just keep Venezuela's current production reliable. It will take many tens of billions and ten years to get Venezuela back to 3 million per day production levels.
Her view on Petro Dollars sounds correct, but I'm not educated in foreign currency flows to know for sure.
The demand growth was supposed to be diminished with EV's. EV's are an urban niche vehicle and not a big factor in large geography countries like the US.
Demand for fossil fuels of all types is chronically underestimated in emerging markets - think India and Africa where the young populations are still expanding. They don't care about global warming scams, they want what we take for granted - cheap energy.
The US will develop Gulf of America first and Alaska next. Add to that crude ships and LNG along with refineries and we will have a stable sector of high paying jobs. The Saudi's have JV 's all along the gulf coast for refineries and plastics manufacturing for the world. XOM and the Saudi's are big in refineries and co-located plastics manufacturing. Darrin Worth refers tothem as "advantaged assets".
This fits very well with Trumps view of America First. All of that business will be transacted with Dollars. Petrodollars and tariffs will be a powerful way to make the world live in peace together, (with the US calling the shots).
Bottom line a brilliant long term growth plan.
Bob |
