For the U.S. oil patch, exports are the lifeblood of today’s market. U.S. refineries are operating at more than 90% of their rated capacity and using as much domestically produced light-sweet shale oil as their sophisticated equipment will allow. That means that virtually all of the incremental U.S. unconventional light-sweet crude oil production will need to be piped to export terminals along the Gulf Coast, loaded onto tankers, and shipped to refineries overseas. In today’s RBN blog, we discuss what this undeniable link between crude oil exports and production growth means for U.S. E&Ps and midstream companies — and the future of the oil and gas industry.
In observance of today’s holiday, we’ve given our analysts a break and are revisiting our May the 4th blog on the U.S. crude oil export market. If you didn’t read it then, this is your opportunity to see what you missed. Happy Memorial Day! And a sincere thank you to the men and women who made the ultimate sacrifice while fighting for our freedom.
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As certain as things may seem at times, as energy-market forecasters we have to admit that the future doesn’t always turn out like we expect. What forecaster could have predicted 20 years ago, for example, that the U.S. was about to enter a new, golden age of hydrocarbon abundance? And who in 2019 could have foreseen a global pandemic, or a brutal land war in Europe that would make one of the world’s Big Three oil-producing countries an international pariah?
Prognosticate we must, however, basing our predictions on what we know and how things stand today. What we know is that U.S crude oil production (dark-green bar segments in Figure 1) has been rising almost without pause since the start of the Shale Era, reducing the need for crude imports (blue bar segments) — though the U.S. still imports significant (and critically important) volumes of heavy crude from Canada. We also know that through the 2010s U.S. refineries added incremental refining capacity and did all they could to increase their use of cost-advantaged domestic crude — the orange line in the bar chart shows the steady rise in refinery runs through most of that decade. The problem was (and still is), almost all the incremental barrels produced were (and still are) light-sweet crude, and there are limits to how much of the stuff can be processed at the complex refineries that populate the Gulf Coast. As a result, produced volumes in excess of domestic refinery needs — that is, the portion of the green bar segments above the orange line — have to be exported (also shown in Figure 3). There’s really no alternative.
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About the song
“Proud Mary” was written by John Fogerty and was originally released as a single by Creedence Clearwater Revival in January 1969. It went to #2 on the Billboard Hot 100 singles chart for CCR. Ike and Tina Turner’s cover version of the song did nearly as well. Released two years later, in January 1971, and backed by “Funkier Than a Mosquito's Tweeter,” written by Tina's sister, Alline Bullock, the song went to #4 on the Billboard Hot 100 Singles chart and #5 on the Billboard R&B Singles chart. It has been certified Gold by the Recording Industry Association of America and earned the duo a Grammy Award for Best R&B Vocal Performance by a Group in 1972. The song appeared as the ninth tune on Ike and Tina Turner’s highly successful 12th studio album, Workin’ Together.
A cover version of Proud Mary by the Checkmates Ltd. caught Ike Turner’s attention for doing the song. Turner and drummer Soko Richardson rearranged it to start with a slow, “nice and easy” intro by the Turners, evolving into a “nice and rough” swampy, funky rock and roll romp with Tina and the Ikettes delivering gospel-influenced vocals from the church of rock and roll. Proud Mary became a staple of Tina Turner’s live performances throughout her career. She rerecorded the song in 1993 and it was released as the fourth single from her eighth studio album, What's Love Got to Do with It, which served as the soundtrack to the hit biopic of the same name.
Tina Turner (Anna Mae Bullock) was an American singer, dancer, actress, and author. Referred to as the “Queen of Rock and Roll,” as a solo artist she released 10 studio albums, two live albums, six compilation albums, two soundtrack albums and 72 singles. Her career spanned over five decades. She has been featured in 15 motion pictures, including documentaries and wrote four autobiographical books. She won 12 Grammy Awards and a Kennedy Center Honor, and was inducted into the Rock and Roll Hall of Fame as a solo artist in 2021. Tina Turner died in May 2023 at the age of 83 — her passing was the top story on the evening news.
Ike Turner (Izear Lester Turner) was an American musician, band leader, songwriter, record producer, and talent scout. In 1951, his first recording, “Rocket 88,” credited to Jackie Brenston and his Delta Cats, is a contender for the distinction of the first rock and roll record released. As a solo artist, he released 10 studio albums, two live albums, 25 compilation albums, and 30 singles. He received one Grammy Award, one Blues Music Award, and is a member of the Blues Hall of Fame. Ike Turner died in December 2007 at the age of 76.
We at RBN are saddened to learn of the recent passing of iconic legend Tina Turner. We send our sympathies and condolences to her family, friends, and fans.
