“I’m baffled,” one US government official said last week.
“I have no clue,” said another.
“I have absolutely no idea what he’s talking about,” one frustrated analyst said after an hour of phone calls. “I’m not sure anybody does.”
On October 9, President Donald Trump told reporters aboard Air Force One that he was getting “expedited approval” for a Texas pipeline project.
According to a press pool report, Trump gave no additional details.
“It’s unclear exactly what project he was referring to,” the report notes.
As the week wore on, the Trump administration offered no additional information.
Officials with the US State Department, which can issue permits for cross-border liquid pipelines; the Pipeline and Hazardous Materials Safety Administration, which regulates interstate pipelines that cross state boundaries; the Federal Energy Regulatory Commission, which approves the siting of natural gas pipelines; and the Department of Energy all referred questions to the White House.
The Railroad Commission of Texas, which regulates the state’s roughly 467,000-mile pipeline infrastructure and permits all new intrastate pipelines, declined to comment.
“Any question regarding comments by the President should be directed to the White House or the President’s representatives,” Ramona Nye, a commission spokeswoman, said in a statement.
The White House did not respond to multiple requests for comment from S&P Global Platts and other media outlets.
Analysts speculated that Trump may have misspoke, claiming that the president may have been briefed on Permian oil midstream constraints and thought the federal government could hasten approval of a pipeline project there.
But, as analysts noted, those permitting decisions would likely all be made at the state level.
“How would Trump expedite a Texas pipe?” asked Rusty Braziel, president and CEO of RBN Energy.
Permian oil production is expected to average about 3.5 million b/d this month, up about 843,000 b/d from a year ago.
Platts Analytics forecasts Permian production to grow to about 4.5 million b/d by the end of 2019 as midstream companies add about 3 million b/d of new pipeline takeaway capacity.
Most recently, EPIC Midstream announced earlier this month that it will temporarily move Permian crude oil to the Gulf on its NGL pipeline before its 825,000 b/d pipeline between the Permian and Corpus Christi comes in service.
Trump’s comments on the Texas pipeline project came amid his recent criticism of OPEC for, he claims, driving up global oil prices, an attempt to show he’s addressing rising energy prices ahead of next month’s congressional elections.
For Trump, $80/b Brent and $3/gal retail regular gasoline is a “red line,” according to Bob McNally, founder and president of Rapidan Energy Group and a former White House international and domestic energy adviser.
“It’s binary,” McNally said in an interview with the Platts Capitol Crude podcast. “Below that level, he really doesn’t care too much, he doesn’t tweet much, he doesn’t really talk much about OPEC or oil prices. But everything switched on the approach and then above $80/b Brent, $3/gallon retail gasoline. Oil can quickly become the most important issue.”
Which likely means that if Brent prices fall below $80/b and US drivers are, on average, paying less than $3/gal for gasoline, last week may be the last time we hear about this mysterious Texas pipeline project Trump wants to expedite.
But if prices climb, the project may come up again, even if no one is entirely sure just what it is.
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