More Storage To Be Built At Cushing -- Bakken, North Dakota, USA

I was recently told that the reason for oil supplies exceeding storage capacity at Cushing is this: Cushing was built to store oil coming out of Oklahoma and Texas. It was built long before anyone knew how big the Bakken was, and now, simply put, Bakken production is exceeding what Cushing can handle. In addition, to the Bakken, we now have the Niobrara in Colorado/Wyoming.

Good news: SemCrude is going to build more storage capacity at Cushing.

In this case, however, it appears all the new storage will be reserved for oil coming out of the Niobrara in Wyoming-Colorado. 

Data points (some numbers rounded):

• SemCrude's current storage capacity: 5 million bbls
• New capacity to be built: 2 million bbls
• The one pipeline out of Denver-Julesburg, Colorado/Wyoming entered service in 2009; capacity of 30,000 b/d, expandable to 50,000 bbls
• New capacity is reserved for Noble Energy, Anadarko Wattenberg, and Plains All American.
• The new tanks should be completed in mid-year 2012.