California CBR -- RBN Energy -- March 30, 2016

Considering CBR makes up only about 3% all oil that reaches California, it seems hardly worth it to go through this RBN Energy article, but there are some interesting data points now, and it's always possible CBR will increase at some point.

Data points from the article, written quickly and without much worry about grammar or format. I went through this quickly; there are likely to be factual and typographical errors. If this information is important to you, go to the source. Do not use these notes to make any financial, investment, travel, or relationship decisions.

Intro

• neither CBR or terminal build outs have made much a dent in California's crude oil supply
• December, 2013, height: 36,000 bopd; 2% of the state's 1.9 million bopd refining capacity
• have since dwindled to a trickle

Recap: this is part 7 in RBN Energy's series on North American CBR in 2016

• Part 1: CBR declines in response to narrower spreads between WTI/Brent; prior to that, congested pipelines resulted in spreads of $25/bbl which made CBR attractive; CBR grew from 33,000 bopd in January, 2010, to a peak of 928,000 bopd in October, 2014; now pipeline capacity has greatly improved
• Part 2: looked at the epicenter of the CBR boom in North Dakota; slower-than-expected decline in rail shipments; take-or-pay; some routes to the East Coast and West Coast did not have pipeline
• Part 3: CBR traffic out of the Niobrara;
• Part 4: fate of CBR load terminals in western Canada that were overbuilt and underutilized
• Part 5: CBR market destinations beginning with the East coast
• Part 6: first of a two-part series looking at CBR unloading on the West coast with the Northwest refineries; those refineries continue to receive fairly significant shipments of CBR from North Dakota in the face of narrowing spreads between West Coast benchmark Alaskan North Slope (ANS) and WTI -- in part because Washington refiners are committed to term throughput contracts and railcar leases
• Part 7: complete the West Coast review with a look at California CBR traffic and termainals

California

• CBR incredibly small, even compared to Pacific Northwest
• to less than 1,000 bopd in December, 2015
• almost all CBR shipments into California came from PADD 2 -- assumed to be Bakken crude from North Dakota -- but were a trickle -- averaging 2,000 bopd over the year
• 2013 was the "bumper" year for California CBR from Canada, about 3,700 bopd from the Bakken and 2,600 bopd from the Rockies (WY's Denver Juleburg Basin and Utah)
• no reported Bakken imports in 2015
• low spreads between ANS and Canadian benchmark Western Canadian Select pretty much shut off Canada, also
• the only CBR shipment to California in 2015 came from the Rockies and from New Mexico; CBR shipments to CA from NM actually peaked in December 2014 at 6,400 bopd and likely consisted of Permian crude (WTI or West Texas Sour (WTS)).

California -- an island

• net importer of crude oil
• no pipelines from east of the Rockies or from the Northwest
• CBR seems perfect except CA uses medium grade and heavier crudes vs light shale crudes from ND or west Texas
• but the principal reason: painfully slow build out of rail unload terminals in California

CA CBR terminals

•  reviews the five (5) largest CBR facilities
• for a unit train to be economical, generally requires 100 or more rail cars at a time 
• of the five terminals, only one is currently operating and is relatively small at 40,000 bopd
• the other four in some state of limbo

CA terminals for pipeline, barge or truck

• the list is not comprehensive, but the important ones
• these terminals just as problematic as the CBR terminals

Bottom line

• CBR terminals are not welcome in CA and getting a permit "is akin to finding a needle in a haystack"