2.7 million b/d US Crude Oil Pipeline Capacity Delayed in 2021
By: ESAI Energy
In its summation of postponed projects, ESAI Energy's North America Watch report shows that while DAPL is facing a potential shut-down due to environmental permitting, the 350,000 b/d Liberty pipeline that would deliver more Bakken crude to Cushing was deferred in March due to deteriorating economic conditions resulting from covid-19. The lack of pipeline takeaway from North Dakota is expected to result in an increase in crude-by-rail of approximately 300,000 – 350,000 b/d. The report further concludes that some curtailed Bakken production may not be brought back, and the basin will decline by roughly 270,000 b/d on an annual basis in 2020 and by a further 65,000 b/d in 2021.
"An uncertain outcome for Dakota Access will have knock-on effects for the Bakken, such as capital being diverted to other basins that have better access to markets", notes Elisabeth Murphy, analyst at ESAI Energy. "Without spending on more rigs and frac crews, the Bakken will have a more difficult time offsetting decline and getting production back up to 2019 levels."