January 2019 Commerce Club Luncheon Featuring Anthony Chovanec, Enterprise Products
2-Way Vessel Traffic Vital to Houston’s Robust Energy Exports
It came close to “standing room only” as the Greater Houston Port Bureau (GHPB) kicked off the first Commerce Club luncheon of 2019 on January 10 at the Houston Hobby Marriott South. As the first luncheon serves as the Port Bureau’s annual meeting, opening remarks were given by GHPB chairman Vinny Pilegge. Pilegge touched on the Port Bureau’s advocacy campaign, the white paper written and presented to the Army Corps of Engineers and congressional leaders about the importance of investing in the Houston Ship Channel for keeping two-way vessel traffic, and our many networking events.
Guest speaker, senior vice president for fundamentals and commodity risk assessment for Enterprise Products Partners, centered his talk on “Our Energy Future is Now”, a presentation highlighting the benefits shale production has brought to the oil and gas industry, the optimistic outlook for energy exports, and the importance of two-way vessel traffic to exports on the Houston Ship Channel.
Referencing a presentation Chovanec presented to the Commerce Club in 2017, he identified Asia as continuing to be the dominate emerging market for liquid hydrocarbon products, trailed by Saudi Arabia and the U.S., through 2040. “Really, nothing changed since I showed a similar slide in 2017,” he said as he showed charts representing liquid hydrocarbon demand growth throughout the world and the population and energy intensity of selected major economies. Asian demand growth is attributed to its rising standards of living among its large population.
Chovanec showed a steadily growing, prosperous upswing for U.S. hydrocarbon exports, identifying gains in gasoline and distillates, ethane, crude, and LPG exports over a seven year period, January 2012 through January 2018. While noting that “demand for hydrocarbons in the U.S. is not expected to grow”, he shared expectations for the continued growth of U.S. oil and gas supplies through 2025. Chovanec specifically identified forecasted growth in oil and condensate production, NGL production, and dry NG production.
In looking at U.S. crude oil production, Chovanec quoted the Energy Information Administration’s data showing the nation’s production now surpasses both Russia and Saudi Arabia. “It’s stunning,” he said, “but that’s where we are.”
Global demand for petrochemicals is expected to remain strong, and Chovanec illustrated how ethylene and propylene is a part of a wide array of consumer products internationally. “The U.S. Gulf Coast will be the world leader in ethylene capacity,” he said while listing current U.S. ethylene capacity from steam crackers online now and those expected to be up by 2020.
Focusing the conclusion of the presentation locally, Chovanec called Houston the “epicenter” of petrochemical and energy growth and named the Houston Ship Channel as the “largest and most strategic energy/industrial port in the U.S.” He estimated 140,000 people in the Houston area are directly employed in oil and gas, refining and chemicals, representing approximately $14 billion in total wages. Supporting jobs, such as in service, construction, etc., are estimated at a total of 700,000, with total wages at about $42 billion.
Chovanec concluded his talk by stressing the potential impact two-way vessel traffic limitations on the Houston Ship Channel could have on the bright picture for exports. “It’s all at risk,” he said. “The industry in this room, our employees, our customers deserve better. No one compares to Houston, Texas
- Date March 19, 2019
- Tags 2019 February