Despite the hurricane headwinds from the pandemic and the 2020 oil market crash, the port of Corpus Christi has had a good year.
Sean Strawbridge, the port’s chairman, told attendees at the Texas Independent Producers and Royalty Owners Association’s 75th annual meeting, which was held virtually. The port saw crude oil exports increase by 55 percent last year compared to 2019.
“We don’t expect that – I’m calling 2021 a year off,” he said. Port officials are seeing some cuts this year. The recovery will depend on how quickly vaccines are delivered around the world and how economies get back on track, he said. He predicted it will be 2024 or 2025 before the port makes its move again.
Port officials expect north of 11 million barrels of U.S. production per day this year, Strawbridge said. “Some have said we’ve seen peak oil. We assume that we will not see global peak oil for one to five decades. We’re nowhere near peak oil. “
One reason for his optimism is that there are 2 billion people who do not have a secure source of energy to heat and cool their homes or to cook their food.
“There are enormous advantages. But we have to be disciplined. We recognize that when we compete with a cartel like OPEC, which can influence prices, we need to ensure that we are operating with the utmost efficiency. “
In addition to being able to feed and supply its own people, the US has enough to power its trading partners around the world, he said. The forecast assumes that China will be the largest buyer of liquefied natural gas by 2023 and the US will be the largest seller of LNG by 2025. For this reason, it is important that the port invest in the infrastructure to accommodate these exports.
“There is a real foreign policy advantage in getting American hydrocarbons on the international market,” he said. “Some can replace nefarious sources of petrodollars that can be used against the US.”
While on his first day in office he joined those concerned about President Biden’s order to pause oil and gas leases in states – since expired – and to suspend new oil and gas leases in states, Strawbridge was more likely to see those measures as a goal to appease Biden’s base. He sees the president pragmatic enough to be aware of the foreign policy advantages of domestic production.
One barrel of oil – that’s 42 gallons – provides 19.4 gallons of gasoline, Strawbridge said. The remaining 53 percent is accounted for by products such as aspirin, clothing, phones, glasses, cosmetics, synthetic carpets, house paints, fishing rods, solar panels, toothpaste, sports equipment, cameras, luggage and refrigerators.
The phones in the port offices are ringing again, Strawbridge reported. But this time around, he wasn’t hearing from the traditional producers, midstream companies, and refiners, but rather from manufacturers interested in bringing their operations back to the US, attracted by the country’s cheap natural gas and the port’s infrastructure that enables them to Procure supplies and relocate their goods.
“We are in a good place for more growth. It will be a different demographic – downstream manufacturing versus oil and gas companies, ”he said.