Idle Rambling While Watching Game 5 -- Takeaway Capacity -- The Bakken, North Dakota, USA

I don't know if folks have followed my thoughts regarding takeaway capacity or if I have adequately expressed them on my blog. Based on Lynn Helms' comments over the past year, and all the corporate slide presentations (WLL, BEXP, CLR) I thought the takeaway capacity was well ahead of production.

Then about two months ago, two dots connected. First, I started reading about more and more crude-by-rail (CBR) oil loading facilities; and, then, b) I started seeing these facilities being built in the local area. I started telling a friend who I bounce ideas off of, that something doesn't make sense. If takeaway capacity is more-than-adequate, and transporting by rail is a bit more expensive, why are they building all these CBR facilities?

Two explanations: a) either "they" like the flexibility of rail; or, b) there is going to be a lot more oil produced than we are being told.

I am beginning to think the latter and expressed that to several folks this past weekend in idle chatter.

I have now come across talking papers by at least two analysts that suggest pipeline capacity will be stretched/strained/come under pressure to keep up. There have been several articles in the past week or so that suggest the output from the Bakken could triple by 2015.

This is truly amazing. Who would have thought that takeaway capacity was going to be an issue at this stage?

Now, add this dot:

The Bakken Takeaway Conference in Denver, January 31-February 1, 2012.

If takeaway capacity was not going to be a problem, why schedule a conference on that very topic?

Something tells me we are going to see an explosion of production by this time next summer and perhaps takeaway capacity will become a bigger issue than any would have guessed.

If nothing else, the Bakken Takeaway conference in Denver in late January, 2012, could not have come at a better time.