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Tom Petrie Expresses Optimism at EnerCom’s The Oil & Service Conference™ 13

Tom Petrie presented at EnerCom’s The Oil & Service Conference™ this week, sharing his insight on a variety of topics concerning the oil and gas industry. Mr. Petrie is a well-known energy expert with global oil and gas expertise. He has served as a senior oil analyst for First Boston, co-founder of Petrie Parkman & Co., Vice Chairman of Bank of America Merrill Lynch and most recently he co-founded Petrie Partners.

Keystone will pass before the end of Obama’s time in office

Speaking about the future of TransCanada’s (ticker: TRP) Keystone XL pipeline, Mr. Petrie said that legislation would be approved by President Obama before leaving office in 2016. “I believe this is so necessary that I remain maybe perversely optimistic that this legislation will pass before this president is out of office.”

The oil is going to move to market one way or another, Petrie said. But oil by rail can have dangerous consequences, most recently seen in the form of an exploding rail car following a derailment in West Virginia. In order to eliminate surface transportation incidents, pipeline projects like the Keystone are needed to transport crude, says Petrie. Beyond the practical need for Keystone XL, Mr. Petrie believes that the Republican controlled Congress is in a position to move the legislation to a positive conclusion.

“With Republicans controlling both Houses they have the ability to attach this bill to other bills that [Obama] needs to pass,” said Petrie. “This is an inevitable confrontation that’s going to come up, then [Obama] will probably negotiate to get something else he wants,” before passing the bill.

Simultaneous Imports and Exports Make Sense

During the course of his presentation, Mr. Petrie also addressed whether the U.S. should be trying to increase light crude exports while it continues to import crude from elsewhere. His answer was a resounding “yes.”

“Oil exports in the U.S. make sense,” he said. “We’re going to reach the limits of WTI processing capacity in this country very shortly, maybe this year. We need to have the flexibility to export higher value WTI and import the oils that are most suited to our refining system.” The refining system we have today was built over a decade ago when refiners were anticipating much heavier oils, says Petrie, and imports of those heavier grades of crude needs to continue. Meanwhile, the Energy Information Administration (EIA) reported earlier this month that imports of light crude to the Gulf Coast have been virtually eliminated.

Other topics covered during Mr. Petrie’s presentation ranged from oil price cycles, previous collapses, oil supply overhang and potentially transforming developments. For audio of the entire presentation, along with the slides that accompanied it, click here.

Important disclosures: The information provided herein is believed to be reliable; however, EnerCom, Inc. makes no representation or warranty as to its completeness or accuracy. EnerCom’s conclusions are based upon information gathered from sources deemed to be reliable. This note is not intended as an offer or solicitation for the purchase or sale of any security or financial instrument of any company mentioned in this note. This note was prepared for general circulation and does not provide investment recommendations specific to individual investors. All readers of the note must make their own investment decisions based upon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Investors should consider a company’s entire financial and operational structure in making any investment decisions. Past performance of any company discussed in this note should not be taken as an indication or guarantee of future results. EnerCom is a multi-disciplined management consulting services firm that regularly intends to seek business, or currently may be undertaking business, with companies covered on Oil & Gas 360®, and thereby seeks to receive compensation from these companies for its services. In addition, EnerCom, or its principals or employees, may have an economic interest in any of these companies. As a result, readers of EnerCom’s Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this note. The company or companies covered in this note did not review the note prior to publication.


Important disclosures: The information provided herein is believed to be reliable; however, EnerCom, Inc. makes no representation or warranty as to its completeness or accuracy. EnerCom’s conclusions are based upon information gathered from sources deemed to be reliable. This note is not intended as an offer or solicitation for the purchase or sale of any security or financial instrument of any company mentioned in this note. This note was prepared for general circulation and does not provide investment recommendations specific to individual investors. All readers of the note must make their own investment decisions based upon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Investors should consider a company’s entire financial and operational structure in making any investment decisions. Past performance of any company discussed in this note should not be taken as an indication or guarantee of future results. EnerCom is a multi-disciplined management consulting services firm that regularly intends to seek business, or currently may be undertaking business, with companies covered on Oil & Gas 360®, and thereby seeks to receive compensation from these companies for its services. In addition, EnerCom, or its principals or employees, may have an economic interest in any of these companies. As a result, readers of EnerCom’s Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this note. EnerCom, or its principals or employees, may have an economic interest in any of the companies covered in this report or on Oil & Gas 360®. As a result, readers of EnerCom’s reports or Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.