The Future of Crude Oil in the U.S. and Canada Trisha Curtis, Director of Research Upstream and Midstream Energy Policy Research Foundation, Inc. (EPRINC) BNSFs Crude By Rail Summit June 18, 2014
About EPRINC www.eprinc.org Infrastructure Paper http://eprinc.org/wp- content/uploads/2013/10/EPRINC- PIPELINES-TRAINS-TRUCKS-OCT31.pdf Oil and Gas Journal Embassy Series Presentations at Imperial College London, Colombia…
The entire strip Source: HPDI May 2014 3
North American Oil Production 12000 10000 8000 Thousand Barrels Per Day Canadian Crude Oil Production 6000 U.S. Field Production of Crude Oil Mbbl/d 4000 2000 U.S. 8.2 mbd Canada 3.7 mbd 0 Source: EIA,…
Permit Activity Williston Basin Powder River Basin DJ Basin (Niobrara Reservoir) Uinta Basin Utica Permian Anadarko Basin (Mississippian, Granite Basin Wash, Mississippi Lime and other stacked plays) Eagle Ford…
EPRINCs Jan 2014 Forecast for Major U.S. Shale Plays 7,000,000 EPRINC forecasts 6,000,000 over 2 mbd by 2020 5,000,000 Barrels Per Day 4,000,000 Periphery Permian Eagle Ford 3,000,000 Bakken EPRINC's May 2013 Forecast…
CAPPs Canadian Crude Oil Forecast Source: CAPP 2014, Crude Oil Forecast. Markets, and Transportation 7
CAPPs Canadian Crude Oil Forecast Source: CAPP 2014, Crude Oil Forecast. Markets, and Transportation 8
U.S. Total Imports, Production, Canadian Imports 12000 10000 U.S. Imports from Canada of Crude 8000 Thousand Barrels per Day Oil Mbbl/d U.S. Imports of Crude Oil Mbbl/d 6000 U.S. Field Production of 4000 Crude Oil…
U.S. Imports from Abroad Steadily Decline 4500 4000 3500 THOUSAND BARRELS PER DAY 3000 2500 2000 1500 1000 500 0 Africa Middle East South America Europe North America Eurasia 10
Drilling Activity and Production 11
U.S. Rig Count 2500 2000 1500 of Rigs 1000 500 0 Oil Gas Total Source: Baker Hughes 12
Barrels Per Day Source: NDPA 1,000,000 1,200,000 0 200,000 400,000 600,000 800,000 Jan-07 Mar-07 May-07 Jul-07 Sep-07 Nov-07 Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 North Dakota May-09…
Barrels Per Day - 1,000,000 1,200,000 1,400,000 1,600,000 200,000 400,000 600,000 800,000 Jan-07 Mar-07 May-07 Jul-07 Sep-07 Source: HPDI May 2013, EIA, NDPA Nov-07 Jan-08 Mar-08 May-08 Jul-08 Sep-08…
Reassessing the Bakken Source: Cosima Theloy and Steve Sonnenberg, SPE Paper 168870, presented Denver Aug 2013, Integrating Geology and Engineering: Implications for Production in the Bakken Play, Williston Basin 16
Increased Density Source: Triangle Petroleum Corporation, Presentation Bakken Product Markets and Take-Away Denver Jan 31-Feb Source: Continental Resources March Investor Presentation, Permission granted 1 2012 17
Possible Production Figures 1,600,000 1,400,000 1,200,000 1,000,000 Barrels Per Day 800,000 600,000 400,000 200,000 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: NDPA 18
Pad Drilling Source: From NDIC Lynn Helms presentations 19
North Dakota Crude Oil Transport January 2012 Estimates March 2014 Estimates Source: North Dakota Pipeline Authority 22
March 2014 Williston Basin Crude Transportation Williston Basin Production: 1,054,776 b/d North Dakota: 977,051 b/d South Dakota: 4,712 b/d Eastern Montana: 73,013 b/d Tesoro Refinery: 68,000 b/d Truck to Canadian Pipeline:…
Pipeline Capacity Ample, But Plenty of pipeline capacity now, but if more crude should move back to pipe (rail concerns) could see prices further decline in Clearbrook and in Wyoming Source: EPRINCs article in Oil and Gas Journal…
Where does Bakken end up 1 mbd Williston Basin Production Plus 28,000 b/d Canadian imports 7,000 b/d trucked to Canada 68,000 b/d to refinery 300,000 b/d into pipelines Rockies, Midwest, and Canada 715,000 onto rail 400,000 b/d…
U.S. Crude Oil Exports 300 All exports of crude oil from the U.S. are sent to CANADA 250 Canada imported a total of 331,000 b/d (oil THOUSAND BARRELS PER DAY 200 and refined products) from the U.S. in Jan 2013 150 110,000…
Pipeline Choke Points Source: EPRINC Choke Point Map using Hart ArcGIS Mapping software 27
2014 vs. 2013 Source: CAPP Crude Oil Forecast June 2013 29
All Canadian Pipeline Export Options are Full Kinder Morgans Transmountain line off BC coast - currently 300,000 b/d capacity- planned expansion up to 900,000 b/d (early 2017) (Now Spectra) Platte line to Wood River 280,000…
Supply vs. Take-Away Capacity is Risky at Best AT RISK Source: CAPP 2014, Crude Oil Forecast. Markets, and Transportation 31
Regional Pricing Disparities Source: Map from AFPM, Flint Hills, EIA, CME Group, and estimates 32
Daily Crude by Rail Shipment in U.S. and Canada 1,600,000 1,400,000 U.S. Average Barrels Per Day of 1,200,000 Petroleum and Petroleum Product Canadian Average Barrels Per Day 1,000,000 of Petroleum and Petroleum Barrels Per…
Pipeline vs. Rail Costs From Bakken to Coasts between 10 - 15 Slight increases due to fees by railroads for older tank cars and testing fees From Alberta to Gulf 20 Source: EPRINC Maps using Hart Energy data and ArcGIS…
Canadian Crude by Rail Movements Source: CAPP 2014, Crude Oil Forecast. Markets, and Transportation 37
Refineries 38
Where light sweet Bakken and heavy (blended bitumen) needs to go Total Coking Capacity vs. Atmospheric Crude Distillation Capacity by PADD 10,000,000 Cokers = 60 Operable 9,000,000 Heavy Atmospheric 8,000,000 refining 50 Crude…
Canadian vs. Total Foreign Imports by PADD PADD I PADD II PADD III 1500 2000 6000 Thousand Barrels per Day Thousand Barrels per Day Thousand Barrels per Day East Coast 5000 1000 1500 Gulf Coast (PADD 1) Total 4000 Midwest…
Refinery Expansions and Adjustments Not really about the Bakken To accommodate rising volumes of light sweet crude and condensate from the Eagle Ford and the Utica: Flint Hills and Valero in the Gulf making expansions this year and…
Domestic vs. Imported RAC 140 140 East Coast (PADD 1) East Coast (PADD 1) 120 Crude Oil Domestic 120 Crude Oil Imported Acquisition Cost by Acquisition Cost by Refiners /bbl Refiners /bbl 100 Midwest (PADD 2) 100 Midwest (PADD…
The nature of the oil we're producing may not be well- matched to our current refinery capacity, Mr. Moniz said Tuesday after an energy conference in Seoul. The administration is studying the issue, though government officials declined to…
Crude Exports Timeline of Discussion Talk during past few years in analyst and think tank community Adam Seminski publically talks about crude oil exports in 2012 During the course of 2013 several new pipelines came online to alter…
Geology of the Eagle Ford = Varying Liquid Grades Source: Momentum Oil and Gas LLC, DUG Eagle Ford Conference Presentation Oct 2011; EOG Investor Presentation Feb 2014; 47
Those differences are impacting prices June 13, 2014 WTI 107 Brent 113 48
Regional Discounts Matter with High Cost Production Source: ITG Investment Presentation Nov 2012 49 49
Cash Flow of the Shalers Discounts and transportation issues matter when considering high cost of production, debt, and cash flow Can be argued production still in infancy Source: WSJ, April 20, 2014, Russel Gold Theo Francis The…
U.S. Exports of Petroleum and Petroleum Product U.S. Exports U.S. Petroleum Products Exports 3000 1200 2500 1000 U.S. Exports of Distillate U.S. Exports of Fuel Oil Mbbl/d Finished Petroleum Products Mbbl/d 2000 Thousand…
Water Issues The analysis suggests that a likely contributing factor to the increase in earthquakes is triggering by wastewater injected into deep geologic formations. This phenomenon is known as injection-induced seismicity, which has…
Colorado Fracking Ban Initiative to change constitution in November statewide ballot Give communities to choose what type of activity would take place despite state laws Source: Images directly from In Colorado Local Fracking…
Crude by Rail Accidents July 6, 2013, a run-away train crashed and exploded in Lac-Mgantic, Quebec, killing 47 people and destroying parts of the town November 8, 2013, about 12 cars derailed in a unit train of 90 cars carrying…
Many Entities Involved Issues Groups Involved labeling producers volatility truckers rail safety shippers tank car strength marketers refineries railroads tank car manufacturers 58
Not on the same page Rail executives, including Mr. Harrison, have criticized the moves, warning that such regulation could prove costly and onerous. Those bureaucrats have no transportation experience, he said, adding that reducing…
New York Moratorium NYs Albany County placed a moratorium on crude oil processing expansions in the Port of Albany until health investigations and environmental impacts could be assessed Global Partners and Buckeye in Albany…
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