{"id":23418,"date":"2015-03-26T11:03:03","date_gmt":"2015-03-26T16:03:03","guid":{"rendered":"http:\/\/stateimpact.npr.org\/oklahoma\/?p=23418"},"modified":"2015-03-26T11:13:19","modified_gmt":"2015-03-26T16:13:19","slug":"oklahoma-running-out-of-room-for-oil-as-u-s-hoards-crude-in-cushing-hub","status":"publish","type":"post","link":"https:\/\/stateimpact.npr.org\/oklahoma\/2015\/03\/26\/oklahoma-running-out-of-room-for-oil-as-u-s-hoards-crude-in-cushing-hub\/","title":{"rendered":"Oklahoma Running Out of Room for Oil as U.S. Hoards Crude in Cushing Hub"},"content":{"rendered":"<div id=\"attachment_23426\"  class=\"wp-caption module image right\" style=\"max-width: 620px;\"><img decoding=\"async\" loading=\"lazy\" class=\"size-full wp-image-23426\" alt=\"A tanker truck pulling into a terminal at the oil hub in Cushing, Okla.\" src=\"http:\/\/stateimpact.npr.org\/oklahoma\/files\/2015\/03\/20150319-cushing001_WEB.jpg\" width=\"620\" height=\"413\" srcset=\"https:\/\/stateimpact.npr.org\/oklahoma\/files\/2015\/03\/20150319-cushing001_WEB.jpg 620w, https:\/\/stateimpact.npr.org\/oklahoma\/files\/2015\/03\/20150319-cushing001_WEB-500x333.jpg 500w, https:\/\/stateimpact.npr.org\/oklahoma\/files\/2015\/03\/20150319-cushing001_WEB-150x100.jpg 150w, https:\/\/stateimpact.npr.org\/oklahoma\/files\/2015\/03\/20150319-cushing001_WEB-300x200.jpg 300w\" sizes=\"(max-width: 620px) 100vw, 620px\" \/><\/p>\n<p class=\"wp-media-credit\">Joe Wertz \/ StateImpact Oklahoma<\/p>\n<p class=\"wp-caption-text\">A tanker truck pulling into a terminal at the oil hub in Cushing, Okla.<\/p>\n<\/div><p>A booming U.S. oil industry has led to near-record amounts of oil production, which has helped drive down oil prices. The energy industry has responded by storing crude instead of selling it at discount rates. That has created a unique situation in Oklahoma, where a major oil storage hub is on track to fill up \u2014 completely.<\/p><p><iframe loading=\"lazy\" src=\"https:\/\/w.soundcloud.com\/player\/?url=https%3A\/\/api.soundcloud.com\/tracks\/197797053&auto_play=false&hide_related=false&show_comments=true&show_user=true&show_reposts=false&visual=false\" height=\"150\" width=\"100%\" frameborder=\"no\" scrolling=\"no\"><\/iframe><\/p><p><!--more-->One-fifth of the country\u2019s commercial crude oil storage capacity is located Cushing, Okla., a small city of about 7,900 in northeastern Oklahoma. On the city\u2019s outskirts, field after field are filled with hulking steel storage tanks.<\/p><p>Pumps, compressors and valves hum and shudder. Tanker trucks pull off the busy road and line up at terminals. Sci-fi chirps echo as welders and workers drag cables inside tanks they\u2019re rushing to build. Cushing has room for 71 million barrels of oil, but it\u2019s not enough.<\/p><p>\u201cThere\u2019s actually some thought by Memorial Day, if this doesn\u2019t somehow correct itself, we could be, essentially, at a limit of having full storage,\u201d says Steve Agee, an economist and Dean of the Meinders School of Business at Oklahoma City University.<\/p><p>Right now, there are about 54 million barrels of crude just sitting in the Cushing oil hub \u2014 a record, <a href=\"http:\/\/www.eia.gov\/todayinenergy\/detail.cfm?id=20472\">data from the U.S. Energy Information Administration<\/a> show.<\/p><p>\u201cKudos to the oil and gas industry, but they\u2019re kind of their own worst enemy by doing this,\u201d Agee says.<\/p>\n<div id=\"attachment_18058\"  class=\"wp-caption module image right\" style=\"max-width: 620px;\"><img decoding=\"async\" loading=\"lazy\" class=\"size-full wp-image-18058\" alt=\"Crude oil tank farm in Cushing, Okla.\" src=\"http:\/\/stateimpact.npr.org\/oklahoma\/files\/2014\/01\/20140117-Cushing1.jpg\" width=\"620\" height=\"413\" srcset=\"https:\/\/stateimpact.npr.org\/oklahoma\/files\/2014\/01\/20140117-Cushing1.jpg 620w, https:\/\/stateimpact.npr.org\/oklahoma\/files\/2014\/01\/20140117-Cushing1-500x333.jpg 500w, https:\/\/stateimpact.npr.org\/oklahoma\/files\/2014\/01\/20140117-Cushing1-150x100.jpg 150w, https:\/\/stateimpact.npr.org\/oklahoma\/files\/2014\/01\/20140117-Cushing1-300x200.jpg 300w\" sizes=\"(max-width: 620px) 100vw, 620px\" \/><\/p>\n<p class=\"wp-media-credit\">Joe Wertz \/ StateImpact Oklahoma<\/p>\n<p class=\"wp-caption-text\">Crude oil tank farm in Cushing, Okla.<\/p>\n<\/div><p>The U.S. oil industry has been so effective at using horizontal drilling and well completion techniques like hydraulic fracturing, known as \u201cfracking,\u201d to unlock oil from shale rock, the supply of crude has outpaced worldwide demand, Agee says. That\u2019s one reason why oil prices have plummeted in recent months.<\/p><p>Andrew Lipow, president of Lipow Oil Associates, a Houston-based consulting firm, says the U.S. is at the highest national crude inventory level in nearly 80 years. Low oil prices and prolific supply means North American crude is \u201clooking for a place to go,\u201d he says.<\/p><p>Low oil prices can be an opportunity for energy companies and traders. Some are stashing oil in tank farms like Cushing, or in rail cars \u2014 and even tanker ships. They\u2019re betting on buying cheap oil, storing it, and selling it later when prices increase, Lipow says.<\/p><p>\u201cWhich means anyone who has tanks is going to fill them up,\u201d he says.<\/p><p>Lipow says the U.S. energy industry has both created and dealt with oil stockpiles in recent years. But not all stockpiles are intentional. In March 2011, the Cushing oil hub had fewer tanks and <a href=\"http:\/\/www.eia.gov\/todayinenergy\/detail.cfm?id=15591\">reached 90 percent capacity<\/a>. That build-up was more physical than financial, Lipow says.<\/p><p>\u201cOne of the differences this year compared to years ago is we\u2019ve got several major pipelines that now connect Cushing to the Texas Gulf Coast,\u201d he says.<\/p><p>In 2011, <a href=\"http:\/\/stateimpact.npr.org\/oklahoma\/2012\/04\/17\/what-the-glut-why-cushing-is-bursting-and-hurting-oklahomas-economy\/\">Cushing\u2019s \u201cglut\u201d grew<\/a> as crude flowed into the oil hub faster than it could leave \u2014 a bottleneck fueled by a shortage of pipeline capacity to carry oil to refineries along Texas\u2019 Gulf Coast.<\/p>\n<div id=\"attachment_17585\"  class=\"wp-caption module image right\" style=\"max-width: 620px;\"><img decoding=\"async\" loading=\"lazy\" class=\"size-full wp-image-17585\" alt=\"Construction started on the Keystone Gulf extension in 2012. Here, contractors bury as section of the pipe near Stroud, Okla.\" src=\"http:\/\/stateimpact.npr.org\/oklahoma\/files\/2013\/12\/kxl-construction7-web.jpg\" width=\"620\" height=\"413\" srcset=\"https:\/\/stateimpact.npr.org\/oklahoma\/files\/2013\/12\/kxl-construction7-web.jpg 620w, https:\/\/stateimpact.npr.org\/oklahoma\/files\/2013\/12\/kxl-construction7-web-500x333.jpg 500w, https:\/\/stateimpact.npr.org\/oklahoma\/files\/2013\/12\/kxl-construction7-web-150x100.jpg 150w, https:\/\/stateimpact.npr.org\/oklahoma\/files\/2013\/12\/kxl-construction7-web-300x200.jpg 300w\" sizes=\"(max-width: 620px) 100vw, 620px\" \/><\/p>\n<p class=\"wp-media-credit\">Joe Wertz \/ StateImpact Oklahoma<\/p>\n<p class=\"wp-caption-text\">Construction started on the Keystone Gulf extension in 2012. Here, contractors bury as section of the pipe near Stroud, Okla.<\/p>\n<\/div><p>Pipelines like Seaway and Keystone Gulf helped relieve the glut, but now crude is stockpiling in Cushing because the energy industry doesn\u2019t want to sell its product at low prices \u2014 currently $50.45 per barrel.<\/p>\n<p dir=\"ltr\" id=\"docs-internal-guid-bbd072d7-56cf-8fa2-e2d5-22ad74d583ca\">For the energy industry, Cushing is strategic and symbolic. It\u2019s the location where the primary U.S. oil price, known as West Texas Intermediate, is set. If the Oklahoma oil hub reaches operational capacity, Agee says the effect on the oil market could be practical and psychological.<\/p><p>\u201cPrices would most definitely fall. To what level, we don\u2019t know,\u201d he says, adding that the impact of continued low oil prices could be profound, especially in big energy states.<\/p><p>\u201cOklahoma is a net exporter, we produce more oil than we consume, \u00a0so it will hurt Oklahoma more than it will a state that\u2019s not an oil-producing state,\u201d he says.<\/p><p>Oklahoma\u2019s oil hub may not fill. Agee and Lipow, the consultant, say storage in tanks might drop later this spring when refineries demand more oil to make summer blends of gasoline. Or, the flow could stall as low oil prices force energy companies to continue idling rigs and laying off workers.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>A booming U.S. oil industry has led to near-record amounts of oil production, which has helped drive down oil prices. The energy industry has responded by storing crude instead of selling it at discount rates. That has created a unique situation in Oklahoma, where a major oil storage hub is on track to fill up \u2014 completely.<\/p>\n","protected":false},"author":36,"featured_media":23426,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[490],"tags":[339,238,419,638],"acf":[],"_links":{"self":[{"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/posts\/23418"}],"collection":[{"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/users\/36"}],"replies":[{"embeddable":true,"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/comments?post=23418"}],"version-history":[{"count":16,"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/posts\/23418\/revisions"}],"predecessor-version":[{"id":23434,"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/posts\/23418\/revisions\/23434"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/media\/23426"}],"wp:attachment":[{"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/media?parent=23418"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/categories?post=23418"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/tags?post=23418"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}