- explains why California is an "island" unto itself when it comes to energy
- gives us a glimpse of why Alaskan oil production is declining
- how Bakken oil will benefit from the first two data points
- the Canadian, Permian, and Bakken oil will put further pressure on Alaska pricing; the Alaska "oil rush" is over (for now; and probably won't recover in my lifetime)
These are the takeaway points that caught my interest:
- Alaska North Slope (ANS) crude oil production has been declining since 1987; and I didn't get a warm fuzzy that much was going to change any time soon;
- California is part of PADD 5; almost 50% -- half -- of all oil refined in PADD 5 is imported; it comes from Canada, Asia, and the Middle East; ANS oil is priced at Brent for the most part
- even newbies should know, by now, the delta between Brent and WTI
- WTI is priced at a discount due to oversupply at Cushing; my hunch -- this won't last forever (but I digress)
- there are no pipelines linking the west coast with supplies east of the Rockies; PADD 5 is an island, geographically and politically
- ANS pricing will change this year (2013) because Bakken oil will start reaching West Coast refineries by rail and barge, see next data point
- Bakken crude is priced against WTI and is $20/bbl cheaper than Alaska oil
- terminals are being built on the west coast to receive Bakken oil (previously posted at the MDW); good summary in the linked RBN Energy post
- rail again: US Development Group -- recently purchased by Plains All American -- is building a rail terminal in Bakersfield, CA, to receive crude from North Dakota
- Canadian crude oil is in a world of hurt: pricing is even worse for Canadian oil than WTI; the linked article explains why
- but Canadian oil will eventually reach California (new pipelines) and Alaska oil will suffer even more
- bottom line: the Alaska "oil rush" is over for the time being
No comments:
Post a Comment