The CEO of America's largest oil export gateway predicts another record year in 2023 as strong global demand continues despite efforts to ditch fossil fuel.
Sean Strawbridge, chief executive officer of the Port of Corpus Christi, says foreign bans on Russian crude boosted exports by about 15 per cent last year. In December alone, that worked out to about 70 million barrels.
The Texas state-run port has snapped its annual oil export record for six consecutive years, Strawbridge says. Volumes have climbed from an average of nine million barrels a month in 2016, the year following a decision by the U.S. Congress to repeal a ban on shipping crude abroad.
"We see an American barrel in higher demand than ever before because it's not being controlled by a cartel like OPEC, or influenced directly by a despot like Putin," Strawbridge told Yahoo Finance Canada at CERAWeek by S&P Global. The annual energy conference in Houston, TX draws executives from some of the world's largest oil and gas companies. However, a significant portion of the dialogue is now devoted to newer, cleaner forms of energy such as hydrogen.
According to the U.S.Energy Information Agency, American oil production nearly doubled between 2009 and 2015. Removing the export ban has allowed producers to charge higher prices relative to comparable foreign grades.
Strawbridge says he was only six months into his tenure as CEO when Congress expanded the market to overseas buyers. To cope with the growth, he implemented "a very aggressive capital investment program" as the global conversation around energy transition was becoming mainstream.
"We opened eight new crude facilities over that period of time," he said. "It's been really fortuitous for us. While we were criticized for building that infrastructure early, now, instead of being reviled, we're revered for having that capacity and being able to."
Strawbridge says while oil, and increasingly liquefied natural gas, are mainstays at the port, he is also "fully embracing" the energy transition.
"We think hydrogen from hydrocarbons will be first to market, but ultimately green hydrogen is what the ambition is, particularly for the EU with the declarative 20 million tons by 2030," Strawbridge said.
Hydrogen emits only water when burned, but creating it can be carbon intensive. Green hydrogen is the only type produced in a climate-neutral way, splitting water into hydrogen and oxygen using renewable electricity. The European Union aims to produce 10 million tons annually, and import the remaining 10 million.
"It's going to be hard-pressed for them to achieve that goal. But we certainly want to be contributory on that," Strawbridge said.
Port of Corpus Christi is currently in the late stages of the permitting process for the largest desalination facility in the United States. Once completed, Strawbridge says it will significantly enhance the port's position in the hydrogen value chain.
"What nobody is talking about with hydrogen is the water needs," he said.
"Hydrogen is extremely water intensive."
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.