Full Title: North American Crude Oil Supply, Demand and Impacts on Crude Oil Export Infrastructure
Author(s): Benjamin Salisbury and Robert Balsamo
Publisher(s): Wayfinder Analytics, LLC
Publication Date: February 1, 2019
Full Text: Download Resource
Description (excerpt):
Strong U.S. crude oil production and global demand implies a 3 mmbpd export infrastructure deficit by 2023. Infrastructure investments must keep pace to avoid market disruptions.
By 2023, we project that combined Permian and Eagle Ford production will rise 4.4 million barrels per day (bpd) to 8.5 mmpbd by 2023, but domestic refining capacity is expected to grow by just 453 barrels per calendar day (bcd). As a result, U.S. crude exports would need to rise to 6.5 mmpbd in 2023. This growth is essential to help meet our expectation for global demand rising to 108.5 mmbpd by 2023. Infrastructure must anticipate this future demand in the world market to prevent bottlenecks that have hindered producers at several key stages of the shale revolution. Pipeline infrastructure is being built to serve the increase in Permian and Eagle Ford supply. But without adequate port and other infrastructure to access the global market, a bottleneck will form and work its way back to the wellhead via a reduced price, lowering revenue for producers, impacting jobs and investment. For example, we estimate that a prolonged bottleneck could cost the Permian region alone $51B in revenue.