Energy Transfer Partners CEO Kelcy Warren went to Bismarck Monday to (a) tell Trump Energy Secretary Rick Perry, “I love you, Rick” and (b) state that ETP wants to pump more oil through the Dakota Access pipeline that runs from the Bakken oil fields in North Dakota through eastern South Dakota and Iowa on to refineries in Illinois.
Naturally, Warren wants to pump more oil because his pipeline has raised the price of North Dakota oil:
Warren said Bakken producers now sell crude oil for a higher price than producers in the Permian Basin in Texas because Dakota Access has provided the transportation infrastructure [Amy Dalrymple, “Energy Transfer Partners CEO Says He Hopes to Announce DAPL Expansion Soon,” Bismarck Tribune, 2018.08.13].
Dakota Access isn’t lowering our gas prices our our use of foreign oil. It’s just helping Bakken producers get a better price by shipping their oil to foreign buyers.
Monthly oil production is up since Dakota Access opened in May 2017. The North Dakota Department of Mineral Resources reports that total Bakken oil production has climbed back to the peak levels of 2015. The opening of Dakota Access appears to have stopped a long-term slide in per-well production, which ran in the 120–146-barrels-per-day range during much of the Bakken boom from 2008 to 2015, then dropped to below 90 barrels per well per day in late 2016 and early 2017, then bounced back with DAPL to 97 barrels per well per day this spring.
I thought it was the transportation infrastructure that was to allow more oil to refineries and lower prices. I hate to think Big Awl would lie to me in collusion with the gubmint.
Cory,
Please explain in detail how the pipeline raised the gas price? Be sure to explain how how global supply doesn’t affect the gas price in detail.
Oil companies don’t usually dump money into extracting ever cheaper oil unless the profit margin increases (i.e. the costs of production drop faster).
If there is a glut there will be lower prices. If prices are higher, we will use less. But the rest of the world is growing faster than we are. That foreign demand isn’t going anywhere but up. They are demanding our lifestyle, which requires energy, which currently is powered by fossil fuels.
But any increase in the price of oil due to foreign demand is likely to be less expensive than having to install the electric infrastructure at home (charging plus new vehicle). And there are costs to not having access to energy at all.
Often the best approaches available are to use less and drive a more efficient vehicle.
Should we withhold energy so that the rest of the world stays in poverty and our primary benefit is lower gas prices? Should we let other nations provide that energy instead? Or should we supply the clean energy infrastructure to meet the total demand whenever it occurs, and sell products to that growing consumer base?
http://thehill.com/regulation/energy-environment/402094-judge-orders-full-environmental-review-of-keystone-pipeline
Can hardly wait to hear the predictions from Trash-Can how often this line won’t leak in less than 10 years on the job.
Drumpf signed a bill giving infrastructure projects the go ahead to use US made products but as soon as Trash Can complains about how high steel prices for pipe are, he will cut a deal with them to use inferior pipe guaranteed to leak.
A lot of the pipe will not be manufactured in the United States.
https://www.cnbc.com/2018/03/05/trump-steel-tariff-losers-pipelines-for-oil-boom-need-foreign-steel.html
“The steel needed for 26-inch pipelines is manufactured in three countries, none of which are the U.S.”
Jason, do any underground pipelines have routes under Belle Fourche? Are you relieved the alleged Belle Fourche vandal has been caught?
Hey, Jason, the article explains that the Bakken shippers are able to ship their product out to foreign buyers paying higher prices. Seems pretty simple market explanation.
Keystone and Dakota Access certainly aren’t being built to save Americans money or put more domestic oil in our tanks.