Rising U.S. Unconventional Oil Production Enriching Producers and Refiners

Hart Energy report forecasts upstream, midstream and downstream being re-invigorated

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Jul 30, 2012, 06:30 ET

HOUSTON, July 30, 2012 /PRNewswire/ -- In a new research report entitled Refining Unconventional Oil – Unconventional Resources Invigorate Mature Industry, Hart Energy Research analyzes and projects the inter-dependent regional fundamentals of rising unconventional tight and shale oil production poised to make (or not make) their way through U.S. crude pipelines and new rail tanker logistics to the nation's existing refineries. The report also analyzes natural gas demand in energy-intensive refineries to quantify and compare the upside margin impact of low-cost shale gas.

Hart Energy found that by 2016, upstream producers and midstream operators will redraw the map for U.S. petroleum production and transportation. Nearly 2 million barrels per day (mmb/d) of new shale and tight oil production is coming, along with more than 9 mmb/d of crude oil pipeline projects, 54 crude-by-rail terminals (adding 4.5 mmb/d of coast-to-coast deliverability), and nearly 40 million barrels of new Gulf Coast crude oil storage capacity. Refiners are following suit with capacity expansion or contractions of their own.

"Unconventional oil production is concentrated in areas not ideally aligned with legacy pipelines and refining infrastructure," said Greg Haas, lead author of the study. "The resultant advantages, or disadvantages, downstream vary by location. If all that crude is delivered to the southern refining fleet, the onrush could remake the Gulf Coast into the 'Cushing Coast' with rising stockpiles, sated refineries, insufficient outbound pipeline capacity, and discounted crude prices."

The report, available in hard copy or electronic versions with spreadsheet datafiles and map images, offers an independent, integrated, comprehensive and transparent analysis segmented for standard U.S. petroleum regions (PADDs). Key U.S. unconventional oil plays covered in this analysis include:

Bakken / Three Forks
Eagle Ford
Niobrara
Permian
Utica
Anadarko / Woodford

Hart Energy provides specialized data/information products and member-only services to targeted audiences worldwide and ranks among the leading providers of news, data, and analysis for the global energy industry. Its core publishing and consulting expertise has been extended to online products (databases, maps) and services (websites, market information) as well as industry conferences and exhibitions (DUG). Hart Energy clients derive from the energy industry, the financial and investment community, engineering and automotive industries, utilities, leading NGOs, and the world's major governments.