Crude Oil Export Ban



Author: Velocity Suite Content Analyst

With last week’s vote by a House subcommittee, removal of the United States ban on crude oil exports moved one step closer to reality. On the heels of that vote, many have begun to speculate about the potential effects that lifting the ban might have on the crude oil sector of the domestic energy market. One of the effects that organizations like The Brookings Institution and Columbia University have theorized is increased domestic production in regions like North Dakota and West Texas. The crude oil being produced in these regions is light tight oil (LTO) that has become easier to extract with advancing technologies but cannot be processed as easily by the United States refining complex.

Chart1

New oil produced in the Gulf Coast Region (PADD Region 3), which has largely driven the explosion of domestic oil production over the last decade, could be transported to the international marketplace through a number of methods. There are dozens of major oil pipelines crisscrossing the state of Texas, and several more are slated to come online in the next few years.

Kinder Morgan operates two pipeline systems in Eagle Ford. The Double Eagle system is capable of delivering crude oil from KBD’s Central Facility and Plains All American’s Eagle Ford Crude Terminal to the city of Corpus Christi at 300 MB/d and the KMCC system can deliver Eagle Ford crude to the Houston area for shipping to market, storage, or refining at 100 MB/d. Enterprise’s TEPPCO South Texas System and Koch Pipeline’s Texas systems are also capable of delivering crude oil to various area ports and terminals for storage and shipping.

Eagle Ford Pipelines

In addition to pipelines, there are several crude-by-rail terminals in or near Eagle Ford that could be used to ferry crude oil by train to port towns like Corpus Christi, Houston, Galveston, Brownsville, and Freeport. Plains All American Pipeline’s Eagle Ford Crude Terminal is capable of unit train handling at a rate of 40,000 BP/d, and has storage for up to 200 rail cars. The area is also home to many other origination, transload, and destination facilities.

Eagle Ford Terminals

The Williston-Bakken region is also home to a booming crude-by-rail network. Crude oil produced in PADD region 2 can be shipped via rail to destinations all over North America. The region has a crude-by-rail capacity of more than 13 million BP/d which is transported primarily by Canadian National Railway (CN) and the Burlington Northern Santa Fe (BNSF) lines.

Bakken Rail Terminals

North American refining companies are ramping up efforts to process North American crude oil to be sold in the domestic market as well. Recently Valero Refining announced that five of its North American refineries (Jean Gaulin, Ardmore, McKee, Memphis, and Three Rivers) are now processing crude oil produced in Canada’s tar sands region and LTO produced in the Williston-Bakken and Eagle Ford exclusively. Valero also announced that its refineries in Houston and Corpus Christi are ramping up their ability to process crude oil produced in the Eagle Ford.
The features discussed and many more will be available as GIS data in the October release of Velocity Suite. The new Crude Oil Rail Terminals layer, as well as updates to GIS data for other oil infrastructure, will be available to clients who subscribe to the Intelligent Map module. The updates include several new pipelines, the addition of pipeline capacity to existing pipeline segments, and the mapping of all Canadian oil refineries.
The Velocity Suite can be used to analyze more information related to crude oil logistics. For more information or questions about how to use these tools and analysts in Velocity Suite, feel free to Contact Velocity Support.

RELATED PRODUCTS

Velocity Suite >>
EV Energy Map >>
EV Fuels >>