June 22, 2016: US Crude Oil Capacity Grows; Utilization Has Surged Since 2014

If market is up today, credit it to FedEx to some extent.

The EIA graphic today is really quite remarkable: US crude oil storage capacity utilization rises even as storage capacity grows.

From September 2015 to March 2016, the United States added 34 million barrels (6%) of working crude oil storage capacity, the largest expansion of commercial crude oil storage capacity since EIA began tracking such data in 2011…Despite the large expansion in crude oil storage capacity, the net effect of capacity growth and increased inventories resulted in high storage utilization rates. Storage utilization at Cushing, Oklahoma, averaged 87% over the past four weeks (for the week ending June 10), compared with 81% for the same period last year. U.S. Gulf Coast region storage utilization rates averaged 72% over the past four weeks (for week ending June 10), after never being more than 70% in the previous four years. --- EIA

The good news: if Hillary is elected president, and she is able to follow through on her pledge to ban fracking, there should be plenty of storage capacity at Cushing.

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Fracking Without Water

From Bloomberg:

Then there are the much-debated environmental trade-offs. Hydraulic fracturing, or fracking, requires copious water. And while gas-fired power plants produce less CO2 than coal-fired plants, environmentalists are quick to point out that methane itself is a potent greenhouse gas and leaks needlessly from aging infrastructure.

An Australian researcher and two scientists from France, which has banned fracking, now suggest there may be a better way. And it's a twofer, at least.

Their germ of an idea, published today in the journal Nature Communications, would simultaneously reduce or eliminate drilling's water footprint, make wells more productive, and trap carbon dioxide underground. How? Substitute high-pressure CO2 for water.

For newbies: I've always said there is no shortage of water for fracking in the Bakken. The bigger problem is getting rid of all that water. The above linked article has to do with fracking shale for natural gas, not fracking oil from dolomite/limestone/sand.

A completely different issue is "water-flooding" dolomite/limestone/sand -- which has been discussed rarely but will become more interesting with time.