US oil-export projects stall

Only three out of an initial dozen offshore US Gulf Coast oil export proposals remain before federal maritime regulators. (Getty Images)
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Updated 09 October 2020

US oil-export projects stall

  • Energy companies have been hit by the coronavirus, permit delays and environmental concerns

NEW YORK: The pandemic has stalled a once-furious race among energy companies to build deepwater oil export terminals off the Texas coast, amid permitting delays and rising environmental opposition.

Only three out of an initial dozen offshore US Gulf Coast oil export proposals remain before federal maritime regulators. They are being slow-walked as the coronavirus slashed global fuel demand and the gusher from US shale fields ebbed, analysts said.

“While these projects may be on the drawing board, they are more or less in a state of limbo given that in the current crude oil price environment, there’s more than ample export capacity already available,” said Andrew Lipow, president of consultancy Lipow Oil Associates.

US oil production has declined 18 percent and crude prices have tumbled 35 percent this year, lessening demand for new export ports. Daily US crude exports slowed to 8 percent gain through July, down from 46 percent last year, according to US data.

Bluewater Texas Terminal, a joint venture of oil refiner Phillips 66 and trader Trafigura, remains far from a final go-ahead by the partners. The companies are continuing to supply information for needed approvals, Phillips 66 spokesman Rich Johnson said.

Sea Port Oil Terminal, backed by Enterprise Product Partners LP and Enbridge Inc, also no longer expects to secure federal permits this year, said Enterprise spokesman Rick Rainey.

Permit reviews for Texas GulfLink deepwater port, proposed by Sentinel Midstream LLC and Freepoint Commodities, was also suspended. 

While crude export increases have slowed, environmental opposition to the major proposals has soared. Environmentalists have petitioned federal regulators to halt reviews until the pandemic fades and public hearings can be held.

Sierra Club recently submitted a letter signed by 22,400 people to regulator Maritime Administration opposing the Bluewater terminal. It and other groups also have rallied opponents to Enterprise’s SPOT terminal.

“There is huge community opposition around these projects,” said Sierra Club attorney Devorah Ancel, who said many of those opposed to the projects are Texas residents. The groups oppose the projects saying they could lead to ocean oil spills and are unneeded.

There is no Texas export terminal capable of directly loading supertankers, vessels able to carry 2 million barrels of oil. Smaller ships are loaded with oil that is transferred to larger vessels farther out at sea, a method that proponents of the deepwater ports argue is costly and increases ship traffic.

As the Permian Basin in Texas and New Mexico led US crude production to as much as 13 million barrels per day, pipeline companies with shale oil supplies jumped into the deepwater terminal race.

“Now the reality is there are too many pipelines out of the Permian, there’s not enough demand and so the urgency around these has subsided,” said Sandy Fielden, oil and gas analyst at financial services firm Morningstar.

He suspects proponents will move slowly on the projects: “If the export market recovers and crude oil production booms back up to higher levels than it was at the end of last year, then obviously there’s a market for these terminals.” 

Britain, EU tell each other to move on trade

Updated 20 October 2020

Britain, EU tell each other to move on trade

  • Both sides call on each other to protect billions of dollars of trade between the neighbors

BRUSSELS: Britain and the EU said on Monday the door was still open for a deal on their post-Brexit relationship, calling on each other to compromise to find a way to protect billions of dollars of trade between the neighbors.

With just over two months before Britain ends a status quo transition arrangement with the EU, talks on a trade deal are deadlocked, with neither wanting to move first to offer concessions.

A no-deal finale to Britain’s five-year Brexit drama would disrupt the operations of manufacturers, retailers, farmers and nearly every other sector — just as the economic hit from the coronavirus pandemic worsens.

European Commission Vice President Maros Sefcovic repeated on Monday that the EU still wanted a trade deal but not “at any cost” after British Prime Minister Boris Johnson said on Friday there was no point in continuing talks.

“It has to be a fair agreement for both sides — we are not going to sign an agreement at any cost,” Sefcovic told reporters after meeting Michael Gove, Britain’s point man on the existing divorce agreement, in London.

“The EU is ready to work until the last minute for a good agreement for both parties,” Sefcovic said.

Britain, increasingly frustrated by the EU’s refusal to start text-based talks, called on the bloc to make the first move, with its housing minister saying that Brussels only had to make “some relatively small but important changes.”

Housing Secretary Robert Jenrick called on the EU to “go that extra mile, to come closer to us on the points that remain for discussion.”

A spokesman for Johnson again ruled out prolonging any negotiation beyond the end of this year, when the transition period runs out, saying the EU “must be ready to discuss the detailed legal text of a treaty in all areas with a genuine wish to respect UK sovereignty and independence.”

EU chief negotiator Michel Barnier had been due in London for talks with British counterpart David Frost this week. Instead, they will now speak by telephone on Monday to discuss the structure of future talks, Barnier’s spokesman said.

Negotiations broke down on Thursday, when the EU demanded Britain give ground. Issues still to be resolved include fair competition rules, including state aid and fisheries. EU diplomats and officials cast Johnson’s move as a frantic bid to secure concessions before a last-minute deal was done, and European leaders have asked Barnier to continue talks.

British officials have repeatedly said any deal has to honor Britain’s new status as a sovereign country and not try to tie it to EU rules and regulations.

German Chancellor Angela Merkel said compromises on both sides would be needed. French President Emmanuel Macron said Britain needed a deal more than the 27-nation EU.

Britain is launching a campaign this week urging businesses to step up preparations for a no-deal departure. In a statement accompanying the launch, Gove says: “Make no mistake, there are changes coming in just 75 days and time is running out for businesses to act.”

More than 70 British business groups representing over 7 million workers on Sunday urged politicians to get back to the negotiating table next week and strike a deal.