RBN Energy

For a few days last week, Canada experienced a nationwide shutdown of its rail transportation network — the backbone of its economy. Of the literally thousands of items railed across Canada to consumers and for export to the U.S. and overseas, we consider three important liquid energy commodities — crude oil, propane and butane — that are transported by rail to provide some perspective on the volumes and dollar values that could have been jeopardized by an extended shutdown. In today’s RBN blog, we summarize the short-lived disruption to Canadian and international commerce and tally the impacts that could have been. 

Fast-rising NGL supplies during the early years of the Shale Era fueled excitement about the potential for new petrochemical plants in the U.S., especially ethane-only crackers to make ethylene and other byproducts, along with propane dehydrogenation (PDH) plants to make propylene. While 11 new ethane-fed crackers have come online in the U.S. since the mid-2010s and the world’s largest — Chevron Phillips Chemical and QatarEnergy’s 4.8-billion-lb/year facility — is under construction in Texas, only three of the many PDH projects proposed over the same period were actually built. In today’s RBN blog, we’ll look at why the initial rush of new PDH project announcements resulted in so few new U.S. plants. 

Energy Transfer’s plan to buy WTG Midstream, a West Texas-based and private equity-backed natural gas gatherer and processor, just got a bit less expensive — and not quite so comprehensive. Energy Transfer will still acquire WTG’s network of more than 6,000 miles of gas pipelines, eight processing plants and more, but WTG’s 20% stake in the joint-venture (JV) BANGL pipeline system is no longer part of the deal. In today’s RBN blog, we’ll take a look at the detour from the original transaction. 

Rome wasn’t built in a day and neither were the large, wellhead-to-market natural gas and NGL networks that Phillips 66 and a handful of other midstream empires have assembled — many of them targeting the all-important Permian. Now, P66 has reached an agreement to acquire Pinnacle Midstream, whose associated gas gathering system and gas processing complex in the heart of the Midland Basin nicely complement a host of other gathering and processing assets P66 controls through its majority stake in DCP Midstream. In today’s RBN blog, we’ll discuss P66’s planned purchase of Pinnacle Midstream and what it means for the Permian piece of the acquiring company’s broader natgas/NGL system. 

Normal butane is an important gasoline blendstock, with a great combination of high octane and relatively low cost. It also has a high Reid vapor pressure, or RVP, which is a good news/bad news kind of thing because while regulators allow higher-RVP gasoline — that is, gasoline with higher levels of butane — to be sold during the colder months of the year, they forbid its sale during the warmer months, thereby forcing butane levels in gasoline to be kept to a minimum. As we discuss in today’s RBN blog, air-quality regulations and seasonal shifts in butane blending may add complexity to gasoline production and marketing, but they also create opportunities to increase gasoline supply and earn substantially larger profits through much of the year. 

In North Dakota’s Bakken production region, crude oil is king. The light, sweet crude produced there is attractive to buyers in the Midwest and Gulf Coast and is the primary driver of producer economics in the basin. And when the crude is produced, it comes along with a healthy dose of NGL-rich associated natural gas. But while those are valuable products in their own right, providing economic uplift when sold, it’s a double-edged sword. Natural gas and NGL volumes are increasing rapidly and will soon test the limits of takeaway capacity, with the potential to disrupt not only those commodities but also the crude production with which they’re associated. In today’s RBN blog, we discuss three potential limitations faced by Bakken producers: natural gas pipeline capacity, NGL pipeline capacity and, at the fulcrum of those two, the Btu heat content of the gas being piped out of the basin. 

After a roughly three-year wait for a critical state permit, Enbridge’s Great Lakes Tunnel and Pipe Replacement project for its Line 5 pipeline across the Straits of Mackinac in Michigan has taken a step forward. The Army Corps of Engineers’ permits for the tunnel project would seem to be the only major obstacle standing in the way of construction, but there may well be more challenges ahead. Like a few other oil and gas projects — namely, Mountain Valley Pipeline (MVP) and Dakota Access Pipeline (DAPL) — Line 5 has become entangled in controversy, including local opposition worried that a spill would irreparably damage their surroundings and spoil the state’s natural resources. In today’s RBN blog, we take a closer look at the Line 5 project, its next steps, and the opposition it continues to encounter.