NorthAmerica's crude oil pipeline infrastructure needs will fall steeply after 2020unless crude exportssubstantially increase, according to a pipeline industry group's .
"Thisstudy has oil projected at $75 per barrel," report author and ICFInternational Vice President Kevin Petak said at an April 12 briefingaccompanying the report's release. "Thus, lower oil development and somewhatless natural gas liquids development."
Thestudy, commissioned by the INGAA Foundation, the nonprofit arm of theInterstate Natural Gas Association of America, included "high case"and "low case" scenarios for global economic conditions covering 2015-2035.In the low case, lower production out of the Bakken Shale "does notsupport incremental increases in pipeline infrastructure," while capacitywould be added between West Texas and the Gulf Coast in the high case asPermian Basin production grows modestly. Even in the high case, most of thecrude oil infrastructure needed for the next 20 years would come online between2016 and 2020, the study found — unless crude exports rise further thanexpected.
"Higherexports could require more capacity additions to accommodate increased flows toexport regions — likely in the Gulf Coast, Mid-Atlantic, and the PacificNorthwest," the study said.
Fornatural gas liquids, the report projected that the U.S. and Canada will addbetween 1.1 million and 2.3 million barrels per day of takeaway pipelinecapacity from 2015 through 2035. Between 2010 and 2014, roughly 5.4 MMbbl/d ofincremental capacity was added.
Aprevious iteration of the study forecast oil prices at $100/bbl for theprojection period, with crude oil infrastructure investments projected between$137 billion and $190 billion. The foundation's , on the other hand, projected$271.8 billion for crude oil infrastructure investment.
Adomestic NGL supply-demand imbalance will also encourage more U.S. exports evenwith lower commodity prices, according to the report, "especially withexpected rises in competitive prices for North American liquids in the globalmarket." Propane exports from the Pacific Northwest to Asian markets areparticularly viable in both the high and low cases.
Spendingon NGL midstream infrastructure, meanwhile, is expected to total between $43billion and $55 billion through 2035. The 2014 report had projected $56 billionof total investment NGL infrastructure over the study period.
Onthe whole, the April 12 report projected that midstream investment would addbetween $655 billion and $861 billion of value to the U.S. and Canadianeconomies and translate into 323,000 to 425,000 jobs per year. Comparatively,the 2014 report estimated that midstream spending would add about $885 billionto U.S. and Canadian economies and create more than 432,000 jobs.
"Yes,there's peaks and valleys, there's good years and bad years," INGAAFoundation Chairman Robert Reiss Sr. said at the briefing. "Is this adying industry? Absolutely not."