Rail Movements

Production growth, new processing infrastructure and increased use of rail are shifting traditional flow patterns in the propane industry. New production and processing is adjacent to historic centers of consumer demand in the Northeast and Mid-Continent – reducing seasonal risks of shortage. Rail distribution improves delivery flexibility. The supply chain has to be flexible enough to balance seasonal consumer demand with increased chemical processing and high export volumes. Today we describe improved regional interconnectivity.

US domestic crude oil production took off in the past year. Most of the production growth is coming from three shale oil plays – the Bakken, Eagle Ford and Permian basins. A number of factors have combined to allow rising production to continue. Today we review what sustains increased crude production and whether it can continue.

The chart below shows total US domestic crude production since the start of 2009. Around August 2011, the level of production started to ramp up dramatically. Despite a brief respite when crude prices fell below $80 / Bbl earlier this year, production is rising again. The latest data from the Energy Information Administration (EIA) shows that between September 2011 and July 2012, production increased from 5.6 MMb/d to 6.3 MMb/d - that’s a 62 Mb/d production increase every month.