Throughout the middle and latter parts of the 2010s, crude oil production growth in major U.S. basins and in Western Canada — not to mention the end to the ban on most U.S. crude exports in December 2015 — has caused noteworthy shifts in crude flow patterns, stressed existing pipeline infrastructure, and highlighted the importance of crude storage and distribution hubs. A common theme through all this has been that more and more crude needs to find its way to the Gulf Coast, with its bounty of refineries and export docks. To that end, lately, there’s been a slew of new pipeline and export-terminal projects announced that are tied to the St. James crude trading hub, which is located in Louisiana, about 60 miles up the Mississippi River from New Orleans. Today, we begin a series on St. James and why it’s becoming an even bigger player in crude markets.
Canadian crude output is rising, requiring new export routes. As traditional pathways face constraints, the U.S. Rockies—especially the Guernsey, WY hub—are emerging as key corridors for moving Canadian heavy crude to downstream markets, including the Gulf Coast.
All but the youngest of our blog readers can recall a time — the Pre-Shale Era — when U.S. crude oil production was on a decades-long decline, increasing volumes of foreign oil were being imported to fill the supply gap, and the general direction of flows on U.S. crude pipelines were northbound from the Gulf Coast to inland refineries. In the past 10 years or so, these trends and flows have flipped: U.S. (and Western Canadian) production is up, up, up; crude imports to the U.S. are down (but leveling out); and — as we said in our intro — crude is being pulled toward the Gulf Coast, not away from it.
In a series of blogs last summer and fall, we discussed how these and other changes have been affecting the crude oil hub in Cushing, OK — the self-proclaimed “Pipeline Crossroads of the World.” We’ve also reviewed plans by a number of midstream companies and others to develop new crude export terminals along the Gulf Coast, from Brownsville, TX, to near the mouth of the Mississippi, that together would add tens of millions of barrels of new crude storage capacity and be capable of fully loading Very Large Crude Carriers (VLCCs). Today, we turn our attention to another hub with a renewed purpose in the Shale Era: St. James, LA (purple hexagon in Figure 1 map and inset), which has long been the trading hub for regionally produced crudes [i.e., Light Louisiana Sweet (LLS), Heavy Louisiana Sweet (HLS) and the offshore-produced medium sour crude Mars], but is now increasingly a destination for Gulf-bound crude from other producing regions.
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About the song
"Louisiana Rain" was written by Tom Petty and appears as the final track on his third studio album, Damn the Torpedoes. The LP was recorded at Sound City and Cherokee studios in Los Angeles and was produced by Jimmy Iovine and Tom Petty. Released in October 1979, the album would prove to be a big breakthrough record for Tom Petty and the Heartbreakers, eventually being certified triple-platinum by the Recording Industry Association of America. It was the first of their albums to reach a Top 10 list (#2 on the Billboard Top 200 Albums chart), and produced two hit singles: "Don't Do Me Like That” (a song from Petty’s days in his first group, Mudcrutch) made it to #10 on Billboard Hot 100 chart, and "Refugee," co-written with Mike Campbell, made it to #15.
Tom Petty was an American singer, songwriter, musician, record producer, and actor. He was the lead singer in Tom Petty and the Heartbreakers, the band he formed in 1976. He previously led the band Mudcrutch and was a co-founder of the superstar group the Traveling Wilburys. Tom Petty and the Heartbreakers made 13 studio albums, Tom Petty made three solo albums, Mudcrutch made two albums, and the Traveling Wilburys made two albums. Tom Petty and the Heartbreakers have three Grammy Awards, three MTV Video Music Awards, and one Billboard Music Award. They have a star on the Hollywood Walk of Fame and were inducted into the Rock and Roll Hall of Fame in 2001. Tom Petty passed away in October 2017.
