(August 12, 2014 – Houston Chronicle) Abundant light crude creates a sweet situation for refiners (By Robert Grattan)
The future of oil refining in Houston and the Gulf Coast increasingly belongs to the pipeline.
Refineries are embracing domestic oil flowing mostly through pipelines from the nation's bounteous shale fields, after counting for years on tankers full of imported crude.
Since 2011, the amount of foreign crude shipped over water to the Houston area has fallen from 1.5 million barrels a day to under 1 million barrels, according to data from locally-based energy analysts RBN Energy….
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Not a problem yet
For now, crude oil flowing to the Gulf Coast has to go somewhere, and it has to have a place to sit if it's not used immediately.
That's not a huge problem if the oil is shipped by tanker, said RBN's Director of Energy Analytics Sandy Fielden. The ship can postpone delivery or head to another port and sell the oil elsewhere if a refinery needs to scale back production temporarily.
It's harder to reroute oil arriving by pipeline. Storage sites provide a buffer and allow refineries to close for maintenance and repairs while producers continue pumping.
Houston-area refineries have about one-third less storage than comparable facilities in other areas of the country, according to Fielden's report.
So far, he said, storage has been adequate, but it could get tighter, with the projected growth in pipeline capacity sending oil to Houston, and July crude production reaching a 27-year high of 8.5 million barrels per day.
