Pipeline & Terminal Shortage Stall Energy Production Growth

Growth in West Texas’ Permian Basin slowed in 2019, because of pipeline and export terminal shortages. And, while companies are building pipelines from West Texas to the Texas Gulf Coast (and massive export terminals are also being built), the near-term forecast is for greater hiccups in oil and natural gas production.

A lack of natural gas pipelines is also slowing oil production growth; gas and crude come out of the ground together. A lack of pipelines creates a situation in which producers have to pay to have the gas moved. Or, they burn it off through a process called flaring, which increases air pollution.

Eugene Kim with Wood Mackenzie told the Houston Chronicle that Permian producers may back down from their growth trajectory until more pipeline capacity is available. Additionally, “growing oil export volumes out of the Permian Basin also threaten to surpass its estimated marine terminal export capacity,” he said.

It’s time to register for this year’s Connect Texas Multifamily Conference on Aug. 15! For information and to register, click here.

For comments, questions or concerns, please contact Amy Sorter