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This Week In Petroleum - Feb. 16


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This Week In Petroleum

Midstream Makeover

Recent shifts in U.S. oil supply and demand patterns are testing the limits of the Nation's oil storage and transportation network.  Upstream, a revolution in tight oil[1] production, fostered by hydraulic fracturing and horizontal drilling techniques, has raised logistical challenges commensurate with the new sources of oil supply it has unlocked.  Downstream, shifts in demand patterns and refining economics are opening a new chapter in supply logistics. Refinery closures in the Delaware Valley and the Caribbean mean that East Coast markets -- no longer as large as they once were, but still the Nation's largest - may become more reliant on product supply brought in from longer distances.  On both counts, changing needs would significantly alter the web of pipelines, storage tanks and terminal facilities on which the oil industry and the Nation depend to link supply centers and end-users.  But the overhaul of the midstream segment of the oil industry goes beyond expanding the infrastructure.  The very nature of midstream services, their function in the Nation's supply dynamics, is being redefined.


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