President Trump wasted no time enacting his agenda, declaring a ‘National Energy Emergency’ on his first day in office. An executive order intended to boost US energy production could be just the ticket to break up a permitting queue for several deepwater terminal projects.
The ‘energy emergency’ declaration could be the most impactful of Trump’s orders, as the president believes this will allow him to remove environmental restrictions on oil and gas projects and streamline permitting for new energy infrastructure. A January 20 executive order, ‘Unleashing American Energy,’ lays out the agenda in detail.
The order ends a moratorium on new LNG export licenses, as East Daley Analytics had anticipated in our Macro gas forecast. It also requires the heads of federal agencies to review regulations and policies “to identify those agency actions that impose an undue burden on the identification, development, or use of domestic energy resources”, and to develop plans to address “all agency actions identified as unduly burdensome.” Agency heads are to report their action plans to the directors of the Office of Management and Budget (OMB) and the National Economic Council (NEC) within 30 days.
Investors in crude oil infrastructure could benefit from this initiative. Four offshore oil terminal projects have filed for a deepwater port license from the US Maritime Administration (MARAD). Only one, Enterprise Products’ (EPD) Sea Port Offshore Terminal, has received the coveted deepwater license, and EPD spent five years, and a big budget, to gain the permit. Meanwhile, Energy Transfer’s (ET) Blue Marlin Offshore Port, Sentinel Midstream’s Texas Gulf Link, and Phillips 66 (PSX) and Trafigura’s Blue Water projects are waiting on approval.
In the Crude Hub Model, East Daley had projected robust supply growth prior to President Trump taking office. We forecast US crude oil production to grow 500 Mb/d this year and exit 2025 at 13.65 MMb/d (see figure). The Permian Basin drives growth, accounting for 82% (420 Mb/d) of the new supply. However, as egress tightens out of the Permian and congestion increases on pipelines to export docks, price spreads will widen and price volatility will increase, leading to a bumpy ride during 2025.
Another FID would set other projects and strategies in motion to further expand production. Producers will need additional infrastructure to move more barrels to the Gulf Coast, and one or more deepwater projects will provide efficient access for crude oil to reach international demand.
East Daley believes the Permian Basin will be the big winner in this new political climate. However, we are not discounting potential gains from other basins, including the Bakken and Eagle Ford. The offshore Gulf of Mexico will also be a big beneficiary of eased regulations and faster permitting, but results will take time on these long-lead projects (5+ years). - Kristy Oleszek Tickers: EPD, ET, PSX.
The Dirty Little Secrets 2025 Report is Live!
The 2025 Dirty Little Secrets written report is available now. This report goes beyond the webinar discussions to provide a deeper analysis of the topics covered. Learn how commodities are intertwined and identify opportunities for profit from market dislocations. Request a copy of the Dirty Little Secrets report.
Sign Up for the Crude Oil Edge
East Daley’s Crude Oil Edge provides weekly updates on the US crude oil market including supply and demand fundamentals, basin-level views, and analysis of market constraints and infrastructure proposals. We explore sub-basin dynamics and provide market insights on crude oil flows, production growth, and import and export characteristics. Sign up now for the Crude Oil Edge.
The Daley Note
Subscribe to The Daley Note (TDN) for midstream insights delivered daily to your inbox. The Daley Note covers news, commodity prices, security prices and EDA research likely to affect markets in the short term.