Monday, August 06, 2012

US Shale Oil Blooms Despite Obama's Keystone Capers

Despite US President Obama's intention to stonewall oil pipeline projects and slow the growth of the North American oil industries, crude production continues to increase and to find its way to refineries and markets.
The oil boom in North Dakota shows no signs of letting up though there's not much pipeline infrastructure to handle the production, an official said.

Oil production in North Dakota has increased every year for the past four years. Much of the production is from the lucrative Bakken formation. _No End In Sight for Bakken
In lieu of pipelines, companies are increasingly shipping crude oil via rail tank cars, barge, and highway tanker trucks.
Tesoro Corp aims to ship more cut-price North Dakota Bakken crude to its Washington state refinery than originally planned, CEO Greg Goff said on Thursday.

The company had aimed to ship up to 40,000 barrels per day of Bakken crude via rail to its 120,000 barrels-per-day (bpd) refinery in Anacortes, Washington... _Reuters
In fact, the crude oil shipment infrastructure is being built up rapidly across the country, in the face of the Obama administration's dragging its feet on pipeline approvals.
Plains All American Pipeline, L.P. (NYSE:PAA) today announced it is constructing new crude oil rail facilities in Tampa, Colo. and Yorktown, Va. and making additional modifications to its Yorktown facility. The new rail facilities and modifications are expected to be completed by the third-quarter of 2013 at an aggregate cost of approximately $125 million.

The Tampa facility is located approximately 50 miles northeast of Denver and is designed to receive crude oil via truck and pipeline and to load unit and manifest trains at a rate of up to 68,000 barrels per day. The facility is being built to service increasing DJ Basin crude oil production and is underpinned by firm contracts with large independent producers. The Tampa facility is expected to be in service in the third quarter of 2013. BNSF Railway Company will provide the rail transportation for the facility.

The Yorktown crude oil rail facility is being constructed at PAA’s multi-product terminal and is designed to receive unit and manifest trains with the capability to unload at a rate of up to 130,000 barrels per day. The project includes making modifications to the existing dock and related infrastructure to facilitate loading barges and ocean-going vessels at higher rates and handling multiple products. The rail facility and other modifications are expected to begin service in the first half of 2013. CSX will provide the rail transportation for the facility. _Businesswire
Bakken, Eagle Ford, Permian, and other looming shale oil fiels are proving to be economic bonanzas for small to medium sized oil, gas, and services companies. This wealth is distributing itself to transportation companies, raw materials companies (fracking sand etc), and to a wide range of service industries and local and regional governments.

The Obama administration has been very hostile to offshore oil & gas, coal, nuclear, and oil sands. Obama's anti-pipeline bias -- meant to slow Canadian oil sands shipments -- also slowed the outflow of US shale oil to refineries. But oil companies are finding alternative ways to get the oil to processing plants and to market.

Economic prosperity can only arise from a smoothly functioning private sector, in the long run. Until recently, the US private sector has been its strong point, the foundation of the country's strength. Electing an anti-private sector US President has not been good for the US' economy, or its global standing. Perhaps American voters -- dumbed down though they may be -- are still capable of learning a hard lesson when it slaps them in the face.



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