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.
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