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Shale Plays Remain Key To Nation’s Economy, Jobs And Energy Security
Crude growth continues
Turning to domestic crude production, Weixel said production through 2018 is projected to grow by 4.4 MMbpd, which is impressive although there are ramifications for the global oil market with that as well.
Weixel said big increases are expected in the Eagle Ford of light sweet crude. Also, big growth is anticipated in the Bakken, Rockies and the Permian.
He also noted that in Canada, oil sands production from Alberta is expected to reach 1 MMbpd, along with oil coming from just north of the Bakken, in what is considered the Saskatchewan portion of the Bakken.
He also anticipates a large portion of the oil production to go to coastal markets via new pipelines shown in the accompanying figure.
Turning to energy prices, Weixel warned that industry should get ready for cheaper energy. “With the Henry Hub expected to average in the $4.30 range, WTI prices are expected to drop by more than 25 percent over the next five years,” he said.
As to exports, Weixel said the U.S. is on track to export more gas than we import. “In 2005, the U.S. needed net imports of 10 Bcf/d from Canada. In the past year, that dropped to 6 Bcf/d. Going forward, the outlook is even grimmer for Canadian pipelines that are exporting to the U.S.”
He anticipates net gas imports to go negative in 2017, to the point where the U.S. is actually a net exporter.
As for LNG, he sees exports at 3.6 Bcf/d, along with an increase of 2.3 Bcf/d of increased exports to Mexico. “Right now, we’re exporting 1.3 to 1.5 Bcf/d of gas to Mexico, which is projected to increase to 700 to 800 MMcf/d by 2018 due to increased power sector growth,” he said.
In Spectra Energy’s Pipeline Construction Outlook and Projects session, Brian McKerlie, vice president-business development, overviewed the company’s commitment to keeping up with plans to spend $1 billion dollars a year between 2007 and 2012 on expansion projects. He also shared a slide listing the projects.
The Spectra executive also called attention to the Express-Platte Pipeline System. The company recently purchased 100 percent interest in the 1,717-mile, crude oil system for $1.49 billion. The Express pipeline carries 380,000 bpd of crude to refining markets in the Rocky Mountain States. The Platte pipeline, which interconnects with the Express pipeline in Casper, WY, transports crude predominantly from the Bakken and Western Canada to refiners in the Midwest. Platte’s capacity ranges from 164,000 bpd in Wyoming to 145,000 bpd in Illinois.