RBN Energy

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. 

Midstream developers have complained for decades that federal courts reviewing agency approvals for their infrastructure projects have cast too wide a net — that is, instead of requiring agencies to simply analyze the specific environmental impacts of the project in question, the courts have been insisting regulators also examine the effects of the upstream and downstream activities the project would enable. As we discuss in today’s RBN blog, the U.S. Supreme Court ruled last week that under the all-important National Environmental Policy Act (NEPA) of 1969, it’s up to regulators to set the boundaries of their environmental review and that courts should defer to their judgment as long as they fall within a “broad zone of reasonableness.” 

It has been 12 months since the Trans Mountain Expansion Project — aka TMX — finally began operations after years of delay, creating a much-needed, larger conduit to move Western Canada’s rising crude oil production to the Pacific Northwest and overseas markets. Although the customer base for exports remains limited, the Trans Mountain pipeline system has been responsible for opening up entirely new markets for Canadian crude. As we discuss in today’s RBN blog, despite its numerous delays and immense cost, the pipeline has recently seen record crude shipments and is nearing its nameplate capacity, driven by rising exports. 

There’s a lot to like about the Uinta Basin’s waxy crude, but ramping up its production and use in refinery feedstock slates will require multimillion-dollar investments in rail terminals, special rail cars, heated storage, refinery equipment and other midstream and downstream infrastructure. A natural concern for E&Ps, midstreamers, and refiners is whether the basin has sufficient long-term staying power to justify the upfront costs and commitments. As we discuss in today’s RBN blog, a machine-learning-based analysis can provide many of the answers by assessing the basin’s long-term outlook under various scenarios. 

Over the past 15 years, the U.S.’s crude oil supply/demand balance has been transformed by the Shale Revolution. Increasing production unlocked through horizontal drilling and hydraulic fracturing have pushed up the nation’s overall supply without an equal change in refining capacity, resulting in significant changes in regional balances. In today’s RBN blog, we discuss what PADD-by-PADD crude oil supply/demand balances can tell us and preview our latest Drill Down Report. 

As crude oil pipelines from the Permian to the Gulf Coast edge closer to full utilization, it’s becoming a challenge for producers and shippers alike. Amid this capacity crunch, converting Enterprise’s Midland to ECHO 2 (M2E-2) pipeline back to crude oil service can’t come quickly enough. In today’s RBN blog — the latest in our series on Permian crude oil pipelines — we discuss Enterprise’s crude oil footprint from West Texas to Houston. 

The Rocky Mountain region (PADD 4), with a population that is both smaller and more spread out than other parts of the Lower 48, consumes only around 650 Mb/d of refined products — just one-fourth the volume of the next-smallest PADD. That limits the need for refinery capacity, which matches the region’s average annual consumption and is only outstripped in the summer months. Yet, the Shale Revolution has impacted the Rockies as much as any other region, boosting production in the Denver-Julesburg (DJ) and Uinta basins, and the Montana portion of the Bakken. At the same time, the area has also seen increasing volumes coming in from PADD 2 and Canada. In today’s RBN blog, we’ll look at how PADD 4 dispenses these barrels and its role in balancing continental crude oil supply and demand.