RBN Energy

U.S. oil, natural gas and NGL markets are more interconnected than ever — with each other and with global dynamics. The deep connections we see today have evolved in the 15 years since the start of the Shale Revolution, and in recognizing how the various segments have impacted one another, we can better explain how they are driving today’s markets. That was the focus of our Fall 2023 School of Energy and it’s the subject of today’s RBN blog, which (warning) is a blatant advertorial for School of Energy Encore, a newly available online version of our recent conference.

A draft environmental impact statement (DEIS) tied to a key water crossing along the Dakota Access Pipeline (DAPL) has finally been completed and made public, thereby ending another chapter in the long-running drama about the ultimate fate of DAPL, which is by far the largest crude oil pipeline out of the Bakken. While the DEIS doesn’t finish the story, the document provides hints about possible outcomes — and an opportunity to review just how important the 750-Mb/d pipeline really is to Bakken producers and shippers. In today’s RBN blog, we discuss the latest developments regarding DAPL and Bakken production.

For many years now, the U.S. has been buying — and piping or railing in — virtually all of the crude oil Canada has been exporting, in part because Canadian producers have only very limited access to coastal ports. More recently, greater pipeline access from the Alberta oil sands to the U.S. Gulf Coast (USGC) has created an attractive pathway — a “Carefree Highway,” if you will — for Canadian crude oil to be “re-exported” to overseas customers. This year, much stronger international demand has sent re-export volumes to record highs — and provided Alberta producers very attractive price differentials for their oil sands crude. That overseas demand appears to be sustainable, but with the looming startup of the 590-Mb/d Trans Mountain Expansion Project (TMX), which will increase the capacity of the Trans Mountain Pipeline system to 890 Mb/d and enable much more Alberta crude to be exported from docks in British Columbia, the re-export surge from the USGC may be in for a pullback, as we discuss in today’s RBN blog.

As this brutally hot summer meanders towards Labor Day, we’re all facing rising gasoline prices as we head to the beach, to barbecues, or to the mall for back-to-school shopping. The main culprit is crude oil production cutbacks by the Russians and Saudis and the situation would likely be much more precarious were it not for strong U.S. shale output keeping gasoline prices from climbing to $5 a gallon or more — except in California, of course. Crucial to sustaining that production long-term is not just replenishing U.S. oil reserves but growing them. In today’s RBN blog, we continue our look at crude oil and natural gas reserves with an analysis of the critical issue of reserve replacement by major oil-focused U.S. producers.

Just a couple of years ago, TC Energy finally threw in the towel on its long-planned, long-delayed Keystone XL pipeline project, which would have substantially increased the flow of Western Canadian heavy crude to Gulf Coast refineries and export docks. It was a bitter loss. Since then, however, two other companies headquartered north of the 49th parallel have assumed leading roles in the U.S. crude oil market or, more specifically, crude exports. First, Enbridge acquired the U.S.’s #1 oil export terminal — now called the Enbridge Ingleside Energy Center (EIEC) — and related assets for US$3 billion and then, on August 1, Gibson Energy announced that it had closed on the US$1.1 billion purchase of the nearby South Texas Gateway (STG), which is #2 in crude export volumes. In today’s RBN blog, we discuss the increasing role of Canada-based midstream companies along the South Texas coast.

The 590-Mb/d Trans Mountain Expansion (TMX) project, which is inching closer to its planned early 2024 completion, has been one of the most eagerly anticipated energy infrastructure projects in recent Canadian memory. Preliminary tolls for shipping crude on the expanded pipeline system, submitted to the Canada Energy Regulator (CER) in June, are multiples higher than the tolls currently charged on the original 300-Mb/d Trans Mountain Pipeline (TMP), possibly undermining oil producers’ economics for shipping and exporting crude on the combined 890-Mb/d system. However, the higher tolls are not the only concern. Serious logistical challenges remain in the form of restricted tanker sizes, a circuitous route for ships traveling from the open ocean to the Westridge export terminal near Burnaby, BC, and even a very tight passage under two bridges, all of which will add costs and time for each exported barrel. In today’s RBN blog, we provide more details on the complexities surrounding crude oil exports via the Trans Mountain pipeline system.

Back in the early 2000s, the outlook for energy security in the U.S. was bleak. Domestic oil production had been on a steady decline since 1985 and gas production was also well off its apex in the 1970s. M. King Hubbert’s concept of peak oil ignited fears of eventual energy scarcity. Given fossil fuels’ ubiquity underlying our entire Western economic and industrial structure, it’s no wonder that folks were concerned. But then the Shale Revolution changed everything. It’s often been said that necessity is the mother of invention and, after many trials and with considerable ingenuity, U.S. producers learned to wring massive volumes of previously trapped hydrocarbons from shale and gave the U.S. energy industry a new lease on life. But there are still limits on how much crude oil, natural gas and NGLs can be economically produced — and concerns lately that the best of the U.S.’s shale resources may have already been exploited. In today’s RBN blog, we examine crude oil and gas reserves: how they are estimated and what they tell us about the longevity of U.S. production.