Daily Energy Blog

It seems almost nothing is going to stop Western Canada’s crude oil production growth. But getting those incremental barrels to refiners and exporters will require more pipeline takeaway capacity, including expansions to Enbridge’s Mainline and Express systems, which should keep barrels flowing to key markets in the U.S. and avoid a capacity crunch. In today’s RBN blog, we consider how our outlook for Canadian production over the next several years stacks up against takeaway capacity and what additions will be needed to keep pace.

Today, we celebrate Juneteenth, which honors the end of slavery in the U.S. In observance of today’s holiday, we’ve given our analysts a break and are revisiting our June 6 blog on Western Canada’s crude oil production growth, which also serves as a preview of our upcoming School of Energy Canada. If you didn’t read it then, this is your opportunity to see what you missed.

There’s been a surge in E&P interest in the Utica Shale’s volatile oil window the past couple of years, and EOG Resources has been particularly optimistic about its potential for producing large volumes of condensate, the lightest of superlight crude oils. A few days ago, EOG — known for growing its business organically, not via M&A — announced one of the largest acquisitions of the year so far: the planned purchase of Encino Acquisition Partners (EAP), the Utica’s #1 condensate producer by far, for $5.6 billion, including the assumption of EAP’s debt. As we discuss in today’s RBN blog, the deal will give EOG its third “foundational” focus area (the others are the Eagle Ford and the Permian's Delaware Basin) and supports the view that the Utica really is an up-and-comer. 

Exports of Venezuelan crude to the U.S. have moved lower in recent months, a trend that seems likely to continue with the May 27 expiration of Chevron’s permit to operate there. But while a limited extension of that permit appears likely, if not yet official, the development adds new challenges for Gulf Coast refiners that process heavy crude. In today’s RBN blog, we’ll update the situation in Venezuela, assess what it means for Chevron, and discuss the outlook for the heavy crude-capable Gulf Coast refiners. 

We’ve discussed the qualities of the Uinta Basin’s unusual waxy crude, the challenges inherent in moving it to market, and the use of machine-learning AI to optimize its extraction from two key geologic layers or “benches” deep below the rugged hills of northeastern Utah. Now, in today’s RBN blog, it’s finally time to reveal what all this tells us regarding the prospects for continued Uinta production growth; the need for new takeaway capacity, blending and refining infrastructure to handle it; and — very important — the estimated duration of economically recoverable waxy crude under various price scenarios. 

The pipelines carrying crude oil from the Permian Basin in West Texas to the Corpus Christi area have been as jammed as an urban highway on the Friday before Memorial Day weekend. The Gray Oak Pipeline, the largest from the Permian to Corpus, has just completed the 80-Mb/d first phase of a planned two-phase expansion that will add a total of 120 Mb/d of capacity. In today’s RBN blog, we’ll discuss what this project means for pipeline congestion and crude exports out of Corpus and nearby Ingleside. 

In just a few years, the Uinta Basin has morphed from a quirky, waxy-crude curiosity to a burgeoning shale play with production north of 170 Mb/d and initial production (IP) rates that compare favorably with the best wells in the Permian. Still, there are a host of logistical challenges associated with transporting waxy crude out of the basin and questions have remained about the Uinta’s potential for growth and its staying power. In today’s RBN blog, we begin an in-depth look at the basin — with an assist from our friends at Novi Labs, whose innovative use of AI and machine learning provides valuable insights. 

The West Coast energy market, PADD 5, is undergoing a profound transformation. Consumption of petroleum-based refined products is declining due to a host of factors including increased renewable diesel (RD) usage, slowing population growth, electric vehicle (EV) penetration and fuel efficiency improvements, just to name a few, but that’s only half the story. Further upping the stakes, crude oil production in the region has declined faster than downstream consumption, so it has had to increasingly rely on imported barrels to support its dwindling refinery throughput. In today’s RBN blog, we look at how the West Coast’s supply of refined products and crude oil has evolved over time and why its reliance on imports has grown.