Half of all crude oil pipelines across the United States are not being utilized amid lower fossil fuel production following the outbreak of the global coronavirus pandemic, energy consultancy Wood Mackenzie has reported.
Prior to the coronavirus pandemic, the utilization rate of U.S. oil pipelines stood at 60 to 70 percent, but now it’s down to 50 percent as production dropped from a record 13 million bpd to 11 million bpd, reports Oil Price.com.
Interestingly, the average of empty pipelines is not distributed equally across the country’s oil fields. The Gray Oak Pipeline in the Permian, for example, is being utilized at 94 percent, according to Wood Mackenzie’s head of oil data, Ryan Saxton.
The BridgeTex pipeline, which ships oil from Midland and Colorado City to Houston, is being utilized at 70 percent of its capacity.
Oil and gas shippers find themselves building additional pipelines during boom times – only to be hit with too much capacity when downturns occur, notes Reuters.
This very scenario played out when additional pipelines were built in the Permian in Texas and New Mexico, the largest oil field in the U.S. during the production surge between 2017 and 2020.
Some pipeline operators in the Permian Basin have responded by cutting pre-pandemic shipping rates, as the U.S. oil industry has been slow to recover from the coronavirus outbreak.
Yet production in the Permian is once again on the rise, with the Energy Information Administration forecasting it could hit 5 million bpd next year. Total shale oil production is seen topping 8.43 million barrels daily in January 2022.
Another oil sheen spotted off Huntington Beach, California coast
The Los Angeles Times is reporting that a sheen in the Pacific Ocean roughly two miles off Huntington Beach has been identified as oil, officials confirmed Thursday morning.
The sheen, which was first reported about 4:30 p.m. Wednesday, is roughly the size of a football field. It has been lingering offshore near Bolsa Chica State Beach but has not made its way onto the sand, according to Huntington Beach police spokesperson, Jennifer Carey.
Berms have been installed to protect the Huntington Beach Wetlands, and the Coast Guard sent a team Wednesday night to deploy booms along the channels leading to the Bolsa Chica Ecological Reserve.
The U.S. Environmental Protection Agency’s National Response Center received a report around 4:30 p.m. Wednesday describing the incident.
The sheen was reported on the same day that three companies were charged with criminal negligence in connection with a major oil spill that tainted the Orange County coast in early October. Huntington Beach was the most severely affected by the oil that washed ashore during that spill.
A three-page federal indictment alleges that Amplify Energy Corp. and two subsidiary firms, Beta Operating Co. and San Pedro Bay Pipeline Co., illegally discharged oil into federal waters from the pipeline they operated off Huntington Beach.
