November 20, 2018

Top 12 Energy Developments in 2018 to be Thankful For

Stratas Advisors

This year, like all years, has seen ups and downs, advances and gains. Yet from an energy perspective, there is much to be thankful for in this uniquely American holiday. Here is our 2018 year- to-date countdown list of energy developments to be thankful for:

12. No Peak Oil:  That in 2018, peak oil output did not arrive in the US at the 6.3 MMbbl/d level predicted by the EIA 2008 Long Term Energy Outlook. (Our most recent Oil Comparables Weekly report shows the nation hit a new record of 11.7 MMbbl/d of crude and condensate production in the field last week, according to the latest EIA data). 

11. Lower Emissions: That available 2018 year-to-date data for CO2 equivalent emissions from energy use are down 11.4% from data for the same period of 2008, according to EIA monthly data through July.

10. Strong Growth and Tame Inflation:  That 2018 EIA's reference annual outlook for inflation is still 2.3% while the EIA's short-term GDP growth forecast is 2.9% for the next four quarters.

9. Energy Security: That a more self-reliant US will likely exit 2018 with just 10-15% of liquid petroleum demand being met by net imports rather than the 60% import reliance of a decade earlier. Our most recent Oil Comparables Weekly report shows the US already is a net offshore exporter, sending out more overseas than we take in. Canadian crude and product trade with the US that utilizes pipelines and rail-tanker logistics enables this strategic energy security advantage.

8. Top Exporter: That the US is recognized as the world's leading liquid petroleum energy producer, topping both Saudi Arabia and Russia.

7. Taxes: That in 2018, the top US corporate tax rate is now 21% vs. the 35% of recent years past.

6. Downstream Expansion, not Contraction: That in 2018, the US downstream crude processing and petrochemical manufacturing industry is running/investing/growing, not idling/shrinking/offshoring. (And congratulations on the announcement of the USVI's restart at Limetree Bay with BP PLC. We look forward to FID decisions on Gulf Coast refinery expansions by Exxon and Chevron soon).

5. Crude Prices:  That key benchmark oil prices in 2018, although volatile, have found a floor well above 50$/bbl (with OPEC's role now setting a floor as the US industry effectively sets the short-term ceiling).

4 Gas Prices:  That US natural gas prices in most trading hubs have recovered enough to enable continued investment in supply side infrastructure (gas production, logistics, and processing and fractionation facilities) while also enabling advantageous purchases and investment by export markets and domestic consumers seeking fuels for heat, power and industrial processes. 

3. Low Gasoline Prices:  That 2018 unleaded regular gasoline prices are nowhere near the $4.59/gal that California paid in 2008 (the highest cost lower-48 state).

2. Energy Transformation:  That in 2018, US energy companies are improving and transforming more lives across the world via access to low-cost, abundant US-supplied energy that reaches more global markets thanks to pipelined or tanked light shale crude oil exports, to pipelined, tanked and railed refined fuel product exports, to abundant and clean natural gas exported via pipelines or liquefied LNG carriers, to NGL exports via pipelines, rail tankers and marine tankers, and more. (The weekly EIA data and more within the our latest Oil Comparables Weekly and our Gas Comparables Weekly reports show that the US exported 7.25 million barrels per day of oil-equivalent energy across the globe last week).

1. Our Clients:  That Stratas Advisors serves a great roster of financial, operating, governmental and manufacturing clients across and around the globe's fullstream energy industry.  We are grateful and look forward to supporting your efforts into the future. 

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