RBN Energy

Western Canada’s vast bitumen sands are estimated to contain reserves of 575 billion Bbl of recoverable crude oil. The largely untapped bitumen carbonate formations lying beneath the oil sands could contain another 243 billion Bbl of recoverable reserves. When added to untapped tight oil shale reserves these huge hydrocarbon deposits potentially could make the Province of Alberta the world’s largest crude oil resource. Today contributor Mike Priaro concludes his description of Alberta’s crude oil reserves.

Prices for West Texas Intermediate (WTI) crude at Midland, TX -- close to the Permian Basin production region -- traded at a discount of $7.78/Bbl to WTI at Cushing, OK on Monday of this week (3/10/14), even though the pipeline tariff between the two trading hubs is less than $1/Bbl. Soaring production and tight pipeline capacity out of West Texas mean small changes in the region’s supply balance can cause the discount to blow out - a situation expected to continue at least until the middle of 2014. Today we investigate the probable causes.

Reformate is a blending component that makes up about 30 percent of US gasoline supplies. It is also an important source of aromatics used as feedstocks for the petrochemicals industry. Ongoing changes in the US crude oil slate are reducing the volume of heavy naphtha available to feed catalytic reformer units that make reformate. At the same time better economics for lighter ethane feedstock are reducing the volume of aromatics produced as byproducts of olefin cracking. The result is a shortage of the aromatic materials used to produce a number of petrochemical intermediates such as polymers and fibers. But more changes are coming to the reformate market due to reductions in the use of reformate in gasoline.  Today we look at the changing role of reformate.

The US Energy Information Administration ranks Alberta’s bitumen oil sands reserves second or third to those of Saudi Arabia and Venezuela. However, evidence from the field and new research indicate that Western Canada’s oil reserves are possibly far larger and could rival or exceed those of the Saudis or the Venezuelans. Today contributor Mike Priaro begins a two part series describing Western Canada’s vast bitumen resources.

There are no crude pipelines running from the Gulf Coast refining region to the West Coast. A Kinder Morgan plan to build such a pipeline last year (2013) floundered on lack of shipper interest. Surging crude supplies at the Gulf Coast and downward pressure on prices in the absence of an end to the crude oil export ban raise the tantalizing possibility of moving crude East to West through the Panama Canal (or the Transpanama pipeline). Today we look at the economics of such shipments.