Thursday, June 14, 2012

Crude Oil's Route From North Dakota to You

1) NORTH DAKOTA


Most of the wells in northwest North Dakota aren't linked to the area's eight major oil pipelines. Instead, tanker trucks haul crude to pipes and rail?this puts about 2000 trucks daily on North Dakota roads. The state allocated $307 million for oil country roadwork in 2011, mostly to build bypasses and repair highways. The region will spend another $605 million by 2013.

2) THE MIDWEST


Pipelines take crude to Flanagan, Ill., and then to a major storage area in Cushing, Okla. But the boom--nearly 97 million barrels more in 2011 than in 2007?is overwhelming the tank farm. With the pace of this growth expected to continue, energy companies are adding pumping stations and widening pipes (in one case from 30 inches to 36). One plan will increase the flow by 120,000 barrels per day within two years.

3) THE GULF


There are not enough pipelines available from Cushing to Gulf refineries to satisfy the demand. Pipelines are being built or improved?for example, owners of the Seaway Pipeline from Cushing to Houston are adding a twin 30-inch pipe, doubling capacity by 2014 to 850,000 barrels per day. St. James, La., is expanding facilities to move that crude to refineries via rail.

4) THE EAST


There are no pipelines that connect Bakken fields to East Coast refineries. Tanker trains running eastward across Canada offload oil in Albany, N.Y., where it's transferred to river barges and delivered to a Sunoco refinery in Philadelphia. Trains also supply remote customers, such as the Continental Refining Co. in Somerset, Ky.

5) THE ROCKIES


Pipelines take crude to a hub in Guernsey, Wyo., and then to refineries in Salt Lake City. Rocky Mountain refineries' crude comes only from Canada, Colorado, and North Dakota, so these gasoline makers can take full advantage of depressed Cushing-based prices. In early 2012 oil gridlocked at Cushing sold for around $20 less per barrel than Middle Eastern oil?and drivers in the Rockies benefited.

6) THE WEST


BNSF Railway trains haul shipments of crude from the Bakken west to Washington state and south to refineries in California. With Canada building new pipelines from the Alberta oil sands to terminals on the country's west coast, the question remains whether Canadian crude will be shipped to China or south to the U.S.

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