Wyoming: At the Crossroads of the Boom Trisha Curtis Director of Research, Upstream and Midstream Energy Policy Research Foundation, Inc. (EPRINC) Wyoming Pipeline Authority October 15th, 2013
North American Oil Production 12000 July U.S. Oil Production 7.5 mbd 10000 Thousand Barrels Per Day Canadian 8000 Production of Crude Oil 6000 4000 U.S. Field 2000 Production of Crude Oil 0 Source: EIA 2
EPRINC’s Forecast for Major U.S. Shale Plays 6 EPRINC forecasts an 5 additional 1.5 mbd by 2022 Million Barrels Per Day 4 Periphery 3 Permian Eagle Ford Bakken 2 1 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Source: HPDI data with EPRINC forecast estimates 3
CAPP 2013 Updated Production Forecast 8,000 Over 3 mbd increase by 2029 7,000 Thousands of Barrels per Day 6,000 Mining 5,000 In Situ 4,000 Conventional Light 3,000 2,000 Conventional Heavy 1,000 0 Source: CAPP 4
U.S. Rig Count 2500 2000 1500 # of Rigs Oil Gas 1000 Total 500 0 Source: Baker Hughes 5
Permit Activity Wil illi liston on Bas Basin in Powder Riv River Ba Basin in DJ DJ Bas Basin in (Ni (Niobrara R Reser servoir ir) Uint Uinta Ba Basin in Ut Utica ica Permi mian Anadarko Ba An Basin in Basin Ba in (Mis (M issi sissi ssippian ian, , Granit ite Wash, sh, Mis issi sissi ssippi i Lime ime Ea Eagle le Ford and other st stacked plays) plays) Reservoir ir Source: HPDI September 2013, Past 90 Days 6
Current Shale Oil Play Production 1,400,000 1,200,000 Bakken - North Dakota 1,000,000 Eagle Ford - Texas Barrels Per Day 800,000 Permian Basin - Texas and New Mexico 600,000 Niobrara/Codell - Colorado 400,000 Anadarko Basin 200,000 0 Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Source: NDPA, HPDI 7
EPRINC U.S. Forecast vs. Others 11 DB 10 Million Barrels Per Day IEA 9 8 EIA 7 WoodMac 6 PIRA 5 EPRINC 4 Source: EPRINC Forecast and Estimates compiled from Deutsche Bank Report Dec 2012 “Future of US Oil” 8
U.S. Total Imports, U.S. Production, U.S. Canadian Imports 12000 Thousand Barrels Per Day 10000 U.S. Imports from Canada of Crude Oil 8000 U.S. Imports 7.6 mbd U.S. Production 8 mbd 6000 U.S. Field Production of Crude Oil 4000 2000 U.S. Imports of Crude Oil 0 Source: EIA Canadian Imports 2.5 mbd 9
Global Shifts in Crude Oil Flows 3000 Saudi Arabia - Medium Sour/Light Sour Algeria - Light Sweet/Ultra Light 2500 Nigeria - Light Sweet/Medium Sweet Thousand Barrels Per Day 2000 Ecuador - Heavy Sour Iraq - Medium Sour 1500 Brazil - Heavy/Medium Sour and Medium 1000 Colombia - Heavy Sour/Medium Sour Mexico - Heavy Sour/Medium 500 Sour Venezuela - Heavy Soure/Medium Sour 0 Kuwait - Medium Sour Russia - Medium Sour Source: EIA, ENI World Oil Book 10
Source: EIA Thousand Barrels Per Day 100 150 200 250 300 350 50 0 Jan-90 Sep-90 May-91 Jan-92 Sep-92 May-93 Jan-94 Sep-94 Wyoming Oil Production May-95 Jan-96 Sep-96 May-97 Jan-98 Sep-98 July Production 173,000 b/d May-99 Jan-00 Sep-00 May-01 Jan-02 Sep-02 May-03 Jan-04 Sep-04 May-05 Jan-06 Sep-06 May-07 Jan-08 Sep-08 May-09 Jan-10 Sep-10 May-11 Jan-12 Sep-12 May-13 11
Compared to Top Producing States 3000 2500 North Dakota Field Production of Crude Oil Mbbl/d Thousand Barrels Per Day 2000 1500 Wyoming Field Production of Crude Oil Mbbl/d 1000 Texas Field 500 Production of Crude Oil Mbbl/d 0 Jan-81 Apr-82 Jul-83 Oct-84 Jan-86 Apr-87 Jul-88 Oct-89 Jan-91 Apr-92 Jul-93 Oct-94 Jan-96 Apr-97 Jul-98 Oct-99 Jan-01 Apr-02 Jul-03 Oct-04 Jan-06 Apr-07 Jul-08 Oct-09 Jan-11 Apr-12 Jul-13 Source: EIA 12
Compared to Neighbors.... 350 300 Wyoming Field Production of Crude Oil 250 Thousand Barrels Per Day Mbbl/d 200 Utah Field Production of Crude Oil Mbbl/d 150 100 Colorado Field Production of Crude Oil Mbbl/d 50 0 Jan-90 Dec-90 Nov-91 Oct-92 Sep-93 Aug-94 Jul-95 Jun-96 May-97 Apr-98 Mar-99 Feb-00 Jan-01 Dec-01 Nov-02 Oct-03 Sep-04 Aug-05 Jul-06 Jun-07 May-08 Apr-09 Mar-10 Feb-11 Jan-12 Dec-12 Source: EIA 13
Wyoming Wells All Wells 2013 Wells Source: HPDI Oct 2013 14
Wyoming 2013 Wells by Type Source: HPDI Oct 2013 15
Wyoming Rig Count 120 100 80 # of Rigs 60 40 20 0 1/7/2000 1/7/2001 1/7/2002 1/7/2003 1/7/2004 1/7/2005 1/7/2006 1/7/2007 1/7/2008 Source: Baker Hughes 16
Wyoming Rig Count vs. Texas and North Dakota 1000 900 800 700 600 Wyoming # of Rigs 500 Texas North Dakota 400 300 200 100 0 Source: Baker Hughes 17
Permits in Past 90 Days Source: HPDI Oct 2013 18
Wyoming Rig Count by Product and Type Source: HPDI 19
Wyoming Pipelines Source: CAPP, ArcGIS Hart Energy 20
Wyoming’s Play in Crude by Rail Source: Wyoming Pipeline Authority Base Map 21
U.S. Federal Land Map Source: NationalAtlas.gov 22
Canadian Pipeline Export Options • Kinder Morgan’s Transmountain line off BC coast - currently 300,000 b/d capacity-recent announcements to expand up to 800,000 b/d (early 2017) • (Now Spectra) Platte line to Wood River 280,000 b/d-full • Enbridge mainline system currently transporting over 1.5 mbd with potential capacity around 2.5 mbd — Northern Gateway off BC coast planned 525,000 b/d, several other planned expansions Nearly full pipelines creates need for XL and Gateway • TransCanada’s Keystone 581,000 opportunities for rail b/d-full — XL would add 700,000 b/d, Energy East Pipeline Project 500 to 800k Source: Canadian Energy Pipeline Association 23
Market Saturation Source: CAPP Crude Oil Forecast June 2013 24
Pipeline Choke Points Source: EPRINC Choke Point Map using Hart ArcGIS Mapping software 25
Shifting Crude Flows 2500 Midwest 2000 (PADD 2) Receipts by New Capacity 2013- Thousand Barrels Per Day Pipeline from 2015 (mbd) Gulf Coast 1500 (PADD 3) Inbound: Cushing, Ok 1.97 1000 Gulf Coast Outbound: Cushing, (PADD 3) 500 OK 1.55 Receipts by Pipeline from Midwest 0 (PADD 2) Inbound: Gulf Coast 3.52 Source: EIA, EPRINC 26
Pipelines and Proposed Projects The majority of this new pipeline capacity, roughly 7.7 mbd (as estimated by EPRINC), is composed of pipeline reversals, expansions, twinning, repurposing, and retrofitting. Source: CAPP Crude Oil Forecast June 2013 27
Where light sweet Bakken and heavy (blended bitumen) needs to go… Total Coking Capacity vs. Atmospheric Crude Distillation Capacity by PADD Cokers = 10,000,000 60 Operable Heavy 9,000,000 Atmospheric refining Crude Oil 50 8,000,000 Distillation capability Barrels Per Calendar Day Capacity 7,000,000 40 Number of Refineries 6,000,000 Thermal Cracking 5,000,000 30 Coking Downstream 4,000,000 Charge 20 3,000,000 Capacity 2,000,000 10 Operating Refineries 1,000,000 - 0 PADD 1 PADD 2 PADD 3 PADD 4 PADD 5 East Coast Midwest Gulf Coast Rockies West Coast Source: AFPM map, EIA data for graph 28
Canadian vs. Total Foreign Imports by PADD PADD I PADD II PADD III East Coast 1600 2000 6000 (PADD 1) 1400 Gulf Coast Midwest (PADD 2) 5000 Total Foreign 1200 1500 (PADD 3) Total Foreign 1000 Imports 4000 Total Foreign Imports 800 1000 3000 Imports East Coast 600 Midwest (PADD 2) (PADD 1) 2000 500 Gulf Coast 400 Imports from Imports from (PADD 3) 200 1000 Canada 0 Canada 0 Imports from 0 Canada PADD V PADD IV 1400 300 1200 250 1000 200 800 150 West Coast (PADD 5) Rocky Mountain (PADD 600 Total Foreign Imports 4) Total Foreign Imports 100 400 West Coast (PADD 5) Rocky Mountain (PADD 50 Imports from Canada 4) Imports from Canada 200 0 0 2008 2009 2010 2011 2012 Jan-July 2013 Source: EIA Data 29
Regional Pricing Disparities $160.00 WTI $140.00 $120.00 Bakken (North $100.00 Dakota Light $80.00 Sweet Flint Hills) $60.00 WCS (Western $40.00 Canadian Select) $20.00 $0.00 Brent Jan-08 Jun-08 Nov-08 Apr-09 Sep-09 Feb-10 Jul-10 Dec-10 May-11 Oct-11 Mar-12 Aug-12 Jan-13 Jun-13 • Western Canadian Select -$33 to WTI Source: Flint Hills, EIA, CME Group, and estimates 30
Cushing Stocks vs. WTI Brent Differential 60,000 35 30 50,000 25 Cushing Stocks - Thousand Barrel Cushing OK Ending 20 Stocks excluding SPR 40,000 of Crude Oil 15 Thousand Barrels $/ Barrel 30,000 10 WTI Brent 5 Differential (Brent 20,000 minus WTI) 0 -5 10,000 -10 0 -15 Source: EIA 31
Rising Production and Imports 8000 30 7000 25 U.S. Imports Thousand Barrels Per Day from Canada 6000 20 of Crude Oil 5000 15 $/ Barrel U.S. Field Production of 4000 10 Crude Oil 3000 5 WTI Brent 2000 0 Differential (Brent minus 1000 -5 WTI) 3000 30 U.S. Imports 25 0 -10 2500 from Thousand Barrels Per Day 20 Canada of Crude Oil 2000 15 $/ Barrel Midwest 1500 10 (PADD 2) Imports 5 from 1000 Canada of 0 Crude Oil 500 WTI Brent -5 Differential 0 -10 (Brent minus WTI) Source: EIA 32
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