Press

2.7 million b/d US Crude Oil Pipeline Capacity Delayed in 2021

Posted by Jake Wright

21-Jul-2020


Pipeline projects in the US that were slated for start-up in 2021 are facing huge challenges from an uncertain demand outlook, lengthy court battles and regulatory review. ESAI Energy's recent North America Watch notes that while some projects already under construction are moving forward, about 2.7 million b/d of new takeaway will be postponed. The most noteworthy is the potential loss of the 570,000 b/d Dakota Access Pipeline (DAPL) and its planned expansion due to legal hurdles. ESAI Energy describes how a shut-down DAPL will create bottlenecks as other pipelines fill up, resulting in more dependency on rail and weaker prices for Bakken crude. This in turn will adversely impact production that had already been shut in due to the impacts of covid-19.

In its summation of postponed projects, ESAI Energy's North America Watch report shows that while DAPL is facing a potential shut-down due to environmental permitting, the 350,000 b/d Liberty pipeline that would deliver more Bakken crude to Cushing was deferred in March due to deteriorating economic conditions resulting from covid-19. The lack of pipeline takeaway from North Dakota is expected to result in an increase in crude-by-rail of approximately 300,000 – 350,000 b/d. The report further concludes that some curtailed Bakken production may not be brought back, and the basin will decline by roughly 270,000 b/d on an annual basis in 2020 and by a further 65,000 b/d in 2021.

“An uncertain outcome for Dakota Access will have knock-on effects for the Bakken, such as capital being diverted to other basins that have better access to markets”, notes Elisabeth Murphy, analyst at ESAI Energy. “Without spending on more rigs and frac crews, the Bakken will have a more difficult time offsetting decline and getting production back up to 2019 levels.”



New service from OilVoice
Trip Shepherd is for companies who need to track their staff in areas of risk.
It's free to use, so we invite you to try it.

DAPLOilDakota Access PipelineCrudeBakkenUSA

More items from jwright


After the Russian Middle Distillate Flood

After Russia flooded the global middle distillate market in the second quarter, Russia's surplus will recede to more typical levels, according to ESAI Energy's recently published CIS Watch . Early in the second quarter, Russia's extraordinary surplus of roughly 1 million b/d of diesel and jet fue ...

Jake Wright


Posted 17 days agoPress > RussiaMiddle distillatejet fuel +1

China’s oil demand gradually recovers amidst deteriorating geopolitics

In the second half of 2020, China's oil demand is forecast to be 120,000 b/d lower year-on-year, or 14.1 million b/d, according to ESAI Energy's newly released China Watch report. The recovery of oil demand is more gradual than recent data suggest. Furthermore, and increased tensions with U.S. and I ...

Jake Wright


Posted 24 days agoPress > ChinaOiloil demand +1

Shale Could Contract by 1.0 Million b/d Within the Year

As a price-elastic source of supply, US shale production will respond relatively quickly to the steep drop in oil prices. Already US E&Ps are reporting further reductions to their 2020 spending guidance and cutting back on planned drilling activity. A new-normal is here, with fiscal discipline and ...

Jake Wright


Posted 4 months agoPress > ShaleOilPrice War +1

ESAI Energy Introduces "Green Energy Trends"

ESAI Energy introduces its new publication,  Green Energy Trends , that will build on and replace their  Global Biofuels  report. The new publication will highlight the market impact of policies and other developments associated with climate change and combating its effects. Meanwhile, the publicat ...

Jake Wright


Posted 6 months agoPress > Climate Changeenergy transitiongreen energy +3

U.S.-IRAN CONFLICT ESCALATES

On Monday, the 30th, ESAI Energy wrote that conflict between the U.S. and Iran is a military as well as economic contest and that oil facilities in the region remain at risk. Last night's U.S. attack, killing the leader of the IRGC Quds Force, was described as pre-emptive self-defense designed to ...

Jake Wright


Posted 7 months agoPress > U.S.IranIraq +2
All posts from jwright