Oil is Nothing Without Infrastructure

abarrelfullabarrelfull wrote on 13 Feb 2012 14:54
Tags: iraq pipeline usa

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As the world awaits the impact of the embargo on Iran, one of the suppliers that we are relying on over the longer term to make up the difference is Iraq. The country faces a mass of problems, technical and political in order to step into the breach. Wildly optimistic forecasts have been made about future production, but its not just upstream that needs serious investment, but so do the logistics infrastructure needed to get rising volumes to customers.

So the news that Foster Wheeler has completed an export facility with capacity of 1.8 million barrels per day is an important one, it will make the realisation of production increases easier. There is more to come:

A further increase of another 1.8 MMBPD in Iraq’s export capacity is intended to be delivered on completion of phase 2 of the expansion.

Meanwhile thousands of miles away, another growing region is suffering from the same problem.

Want to lay your hands on some oil at just $US70 a barrel? Turns out you can. Question is what you will do with it once you own it. Such cheap oil also raises a worrying prospect: North America's vaunted progress toward less reliance on energy imports may well get bogged down for want of a pipeline.

The problems faced in the Bakken, illustrate nicely the need for the Keystone XL pipeline. Because as oil production patterns change, the infrastructure needs to change too. Because Oil is Nothing Without Infrastructure

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