"New figures reflect how many spare pipelines we've got lying around following a building boom and then a crash in production."
"If you’re in the market for an oil pipeline, you’re in luck—we’ve got a lot of extra ones right now. About half of the oil pipelines in the U.S. are sitting unused, energy research firm Wood Mackenzie said in figures shared with Reuters Thursday. The situation reflects a downturn in oil production that was kicked off by the pandemic.
Oil production, like a lot of other supply chain functions, isn’t an exact science; there’s usually a push-and-pull dynamic between production and pipelines as supply ebbs and flows. In early 2020, when U.S. oil production was still relatively high, somewhere between 30 and 40% of the nation’s pipelines were sitting unused, Wood Mackenzie reported. However, the fall in output as a result of covid-19, when demand was so low that oil prices briefly dipped into the negative, was so precipitous that the ratio of unused pipelines to oil output is really out of the ordinary right now.
Part of this incredible drop-off is thanks to the oil boom that preceded the pandemic. Between 2017 and 2020, operators scrambled to build more pipelines as a sharp increase in oil production in Texas’ Permian Basin caused transport bottlenecks and threatened to overwhelm the existing infrastructure. This was the cherry on top of a 15-year rush in American oil production unlike any other in history."
Molly Taft reports for Earther December 16, 2021.
SEE ALSO:
"About Half Of U.S. Oil Pipeline Space Is Empty After Boom Time Building Spree" (Reuters)
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