On Tuesday, the U.S. Energy Information Administration (EIA) announced that a 16% increase in petroleum production and 12% increase in the production of natural gas last year means that the U.S. is now the world’s largest energy producer. According to the report, the record increase in petroleum production hurtled the U.S. past Saudi Arabia to become world’s largest producer, marking, according to the EIA, “one of the largest absolute petroleum and natural gas production increases from a single country in history.”
Confirmation of the production boom and its global context comes just after a report from Petroleum Economist about the boom in demand for crude oil storage facilities. Their report attributed the spike in storage volumes to an ongoing increase in U.S. production of light tight oil, the light, sweet grade produced through horizontal drilling and fracking in the West Texas Permian Basinand North Dakota’s Bakken Formation. According to Petroleum Economist, oil industry officials say last year’s record output has already hit the current capacity limit of the U.S. refinery grid. The existing U.S. refinery network was already strained by the closure of Philadelphia’s PES refinery. PES—whose 335,000 barrel-per-day capacity made it the largest such facility on the U.S. East Coast, and a major destination for crude from the Bakken shale field—has been closed since June of this year following an explosion at an alkylation unit that has since plunged the refinery’s owner, Philadelphia Energy Solutions, into near-bankruptcy).
These factors have fed rampant demand for land, port and export marine storage, particularly in the Gulf Coast region. An oil construction boom is already well underway in Corpus Christi, Texas, located near the Permian extraction sites. According to Petroleum Economist, there are 15.2 million barrels of storage capacity under construction in Corpus Christi, more than triple the amount being built in the neighboring Houston and Beaumont-Nederland storage areas.
Transport Topics (TT) News reported that an expected superabundance of crude oil in coming years bound for the U.S. Gulf Coast from the Permian Basin—suggesting volume beyond even what Corpus Christi and Houston can handle—has led to the proposal of at least eight new offshore oil-export terminals spanning from Brownsville, Texas to Louisiana.