AOPL cites need for more pipelines as Obama visits Cushing

More pipeline capacity will be needed to handle changing US crude oil and refining markets, the Association of Oil Pipe Lines said as US President Barack Obama prepared to visit a major pipeline project at Cushing, Okla.

“The project the president will visit today—the TransCanada Keystone XL Gulf Coast Project—addresses only part of the problem,” AOPL Pres. Andrew J. Black said on Mar. 22. “Expanding crude oil production in North Dakota, Montana, Western Canada, and other US producing regions cannot reach the Gulf Coast in sufficient amounts by pipeline,” he said.

Black added, “Additional pipeline capacity is also needed from these areas into Cushing and beyond. These projects would generate greater consumer benefits by moving more crude oil to Gulf Coast refineries that serve millions of American gasoline consumers.”

Cushing is the main collection and sales point for crude produced from Alberta’s oil sands and North Dakota’s Bakken shale as well as other mid-North American sources, Black observed.

West Texas Intermediate crude delivered to Cushing sells for $18/bbl less than crude represented on international markets by the North Sea Brent price, he said. “Adding southward pipeline capacity from Cushing to the Gulf Coast will give the Gulf Coast refinery hub more crude oil supply options,” Black noted.

Changes in US refining capacity, including closures of some refineries, are creating the need for additional refined product pipeline capacity too, he said, adding that the Federal Trade Commission has noted that product prices in an area tend to fall when pipelines into it are expanded.

‘A bottleneck here’

In his remarks at Cushing, Obama said while the US has added enough pipelines “to encircle the earth, and then some,” there’s still not enough capacity to deliver crude that is being produced, and “there’s a bottleneck right here.”

TransCanada Corp. is trying to move ahead with the southern portion of its proposed Keystone XL system, he continued, and the president said he is directing his administration “to break through the red tape and clear the hurdles” so it can get done.

“You would not know this by what some of the media have reported because another part of this project’s original route passed through an area in Nebraska which raised concerns about drinking water supplies there,” Obama said. His administration needed more time to address those concerns, but Congress wouldn’t allow it so the project’s cross-border permit had to be rejected, he indicated.

“Getting the southern part of this pipeline done is a priority, and we will get it done,” Obama said at Cushing. “And we’ll work hard on resolving questions about the northern part, too.”

More oil and gas associations responded to Obama’s speech by urging him to approve the entire Keystone XL project. “The benefits of this project are just as real today as they were when the State Department finished its comprehensive, 3-year review last fall,” said American Petroleum Institute Executive Vice-Pres. Marty Durbin.

‘A strong signal’

“Approving the full project could help put downward pressure on prices at the pump by sending a strong signal to the markets that more supply is on the way, and it will create tens of thousands of jobs for the safest, most highly trained and productive workforce in the world,” Durbin said on Mar. 22.

Construction of the Keystone segment from Cushing to Gulf Coast refineries is certainly needed, but it will do nothing to move to nearly 1 million b/d of crude south from North Dakota, Montana, and Canada, American Fuel & Petrochemical Manufacturers Pres. Charles T. Drevna said on Mar. 21.

“After more than 3 years of waging war on fossil fuels, it’s long past time for President Obama to declare a cease-fire and approve construction of the entire Keystone XL pipeline to serve American consumers,” he declared. “He doesn’t need to travel across the country for an elaborately staged and costly media event to do this—he can do it immediately with the stroke of a pen.”

Other oil and gas groups criticized the president’s continued calls to increase regulations and repeal federal tax deductions that companies in the industry take. “[He] cannot have it both ways,” American Exploration & Production Council Pres. Bruce Thompson said on Mar. 21. “The president cannot claim credit for independent producers’ success in increasing domestic oil and gas regulation while zealously advocating duplicative and burdensome regulation as well as significantly higher taxes.”

Obama concluded, “I want us to determine our own destiny. I want us to determine our own course. Yes, we’ll continue to drill and try to get more oil where it’s needed. But we’ll also continue to look at alternative and renewable energy sources and becoming more efficient in how we use energy.”

Contact Nick Snow at nicks@pennwell.com.

Related Articles

Congressional Republicans renew bid to halt sue-and-settle maneuvers

02/05/2015 Calling it an affront to regulatory accountability that results in unchecked compliance burdens, US Sen. Charles E. Grassley (R-Iowa) and US Rep. D...

Oil-price collapse may aggravate producing nations’ other problems

02/05/2015 The recent global crude-oil price plunge could be aggravating underlying problems in Mexico, Colombia, and other Western Hemisphere producing natio...

Goodlatte reintroduces bills to repeal, reform RFS

02/05/2015 Calling it “a true ‘kitchen table’ issue,” US Rep. Bob Goodlatte (R-Va.) reintroduced a pair of bills to address problems in the federal Renewable ...

MARKET WATCH: NYMEX oil drops, ending 4-day rally

02/05/2015 Crude oil prices dropped on the New York market Feb. 4 to settle below $50/bbl and to end a 4-day rally after a weekly government report showed oil...

Alberta’s premier seeks more North American energy integration

02/05/2015 Better policy integration and cooperation will be needed for Canada, Mexico, and the US to fully realize the North American energy renaissance’s po...

Deloitte studies oil supply growth for 2015-16

02/04/2015 A Deloitte MarketPoint analysis suggested large-field projects, each producing more than 25,000 b/d, could bring on 1.835 million b/d in oil supply...

Oil, gas infrastructure investments essential, House panel told

02/04/2015 Investments in oil and gas transportation and storage should move ahead because they are essential in continuing the US economic recovery and North...

Petrobras CEO, five other senior executives resign

02/04/2015 Maria das Gracas Foster, chief executive officer of Petroleo Brasileiro SA (Petrobras) since 2012, has resigned along with five other senior execut...

MARKET WATCH: NYMEX crude oil prices reach 2015 high

02/04/2015 Crude oil prices surged more than $3/bbl on the New York market Feb. 3, closing at the highest level so far this year, but some analysts believe th...
White Papers

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...

Accurate Thermo-Fluid Simulation in Real Time Environments

The crux of any task undertaken in System Level Thermo-Fluid Analysis is striking a balance between ti...
Available Webcasts


Prevention, Detection and Mitigation of pipeline leaks in the modern world

When Thu, Apr 30, 2015

Preventing, detecting and mitigating leaks or commodity releases from pipelines are a top priority for all pipeline companies. This presentation will look at various aspects related to preventing, detecting and mitigating pipeline commodity releases from a generic and conceptual point of view, while at the same time look at the variety of offerings available from Schneider Electric to meet some of the requirements associated with pipeline integrity management. 

register:WEBCAST



On Demand

Global LNG: Adjusting to New Realities

Fri, Mar 20, 2015

Oil & Gas Journal’s March 20, 2015, webcast will look at how global LNG trade will be affected over the next 12-24 months by falling crude oil prices and changing patterns and pressures of demand. Will US LNG production play a role in balancing markets? Or will it add to a growing global oversupply of LNG for markets remote from easier natural gas supply? Will new buyers with marginal credit, smaller requirements, or great need for flexibility begin to look attractive to suppliers? How will high-cost, mega-projects in Australia respond to new construction cost trends?

register:WEBCAST


US Midstream at a Crossroads

Fri, Mar 6, 2015

Oil & Gas Journal’s Mar. 6, 2015, webcast will focus on US midstream companies at an inflection point in their development in response to more than 6 years shale oil and gas production growth. Major infrastructure—gas plants, gathering systems, and takeaway pipelines—have been built. Major fractionation hubs have expanded. Given the radically changed pricing environment since mid-2014, where do processors go from here? What is the fate of large projects caught in mid-development? How to producers and processors cooperate to ensure a sustainable and profitable future? This event will serve to set the discussion table for the annual GPA Convention in San Antonio, Apr. 13-16, 2015.

This event is sponsored by Leidos Engineering.

register:WEBCAST


The Future of US Refining

Fri, Feb 6, 2015

Oil & Gas Journal’s Feb. 6, 2015, webcast will focus on the future of US refining as various forces this year conspire to pull the industry in different directions. Lower oil prices generally reduce feedstock costs, but they have also lowered refiners’ returns, as 2015 begins with refined products priced at lows not seen in years. If lower per-barrel crude prices dampen production of lighter crudes among shale plays, what will happen to refiners’ plans to export more barrels of lighter crudes? And as always, refiners will be affected by government regulations, particularly those that suppress demand, increase costs, or limit access to markets or supply.

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected