Proceedings Of The Marine

FALL 2015

Proceedings magazine is a communication tool for the Coast Guard's Marine Safety & Security Council. Each quarterly magazine focuses on a specific theme of interest to the marine industry.

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74 Proceedings Fall 2015 with new extraction tech- nologies, the Bakken for- mation has engendered a sweeping national energy resurgence — a resurgence such upstream-based rela- t ion sh ips ca n help t he Coast Guard proactively identify beforehand. Midstream — Oil and Gas Industry Th e m id st r e a m s e c tor typically involves crude or refned petroleum product transportation and stor- age. Tankers, barges, pipe- lines, and other transport systems move the crude oil from production sites to refneries and deliver the various refned products to downstream distributors. Midstream by far contains the largest Coast Guard footprint due to existing inspection and response regulatory require- ments. However, the focus is not just the maritime industry, but the maritime domain in which various transportation modes pass over, under, and through. Midstream Opportunities Recently, the midstream maritime domain has experienced a signifcant shift to another major midstream entity — the railway. In fact, U.S. freight railroads delivered 435,560 car- loads of crude oil in 2013 (roughly equivalent to 300 million barrels), compared to 9,500 carloads in 2008. 3 The Association of American Railroads (AAR) primarily represents the major freight rail industry and works on sev- eral initiatives, including emergency response, throughout North America. The increase in crude by rail has brought much attention to the rail industry and AAR, as several derailment incidents have reached national media levels. 4 In response, the American Petroleum Institute and AAR have spearheaded a cross-trade workgroup in which both sides conduct training, trade experiences, and seek inci- dent resolution. Coast Guard integration and information exchanges with such workgroups are paramount to increas- ing Coast Guard midstream maritime domain awareness and preparedness. Downstream — Oil and Gas Industry The downstream sector consists of crude oil and natural gas refning, processing, marketing, and distribution. While all aspects of the downstream sector are vital to the health of industries. The oil and gas supply chain is far too dynamic and complex to observe as a whole. Commonly, the oil and gas industry is broken down into three sequential sectors: • upstream, • midstream, • downstream. Upstream — Oil and Gas Industry The upstream sector primarily focuses on exploring and producing crude oils and natural gas from underground or underwater formations. For example, the Bakken forma- tion, which produces Bakken crude oil, and the McMurray formation, which produces crude bitumen, are examples of exploration and production locations for oil and gas upstream sector companies. While the upstream sector is arguably the most complex within the oil and gas supply chain, it is also the primary switchboard for midstream and downstream operations. Upstream Opportunities While the Coast Guard maintains a strong relationship with upstream-based agencies like the Bureau of Safety and Environmental Enforcement, other important facets of the upstream sector and oriented federal agencies exist that we must also effciently capitalize. For example, we would do well to utilize United States Geological Survey oil and gas assessments and oil production reports from the Energy Information Administration. How can these relationships beneft the Coast Guard? First discovered in the 1950s, Bakken crude oil is not a new oil — the ability to extract it was always the challenge. Now, The natural gas supply chain. Graphic courtesy of the American Petroleum Institute.

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