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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7 Fall 2015 Proceedings more crude oil than other methods. However, pipeline con- struction is an inherently longer-term undertaking, and it has not kept pace with the rapid increases in domestic crude oil production. Currently, crude oil transportation is increasingly multi-modal: Any particular shipment may use various different combinations of trucks, rail cars, pipelines, barges, and tankers. For example, in cases where pipelines are either unavailable or lack suitable capacity, oil is often initially transported by truck to a nearby rail loading facil- ity. Shale gas transportation has introduced its own challenges. Texas, Pennsylvania, Arkansas, Louisiana, Oklahoma, and West Virginia currently account for the overwhelming majority of shale gas production. This is a change with sig- nifcant implications for global markets, including portions of the maritime industry that are involved in transporting natural gas overseas, which is primarily achieved by liq- uefying the gas. As the U.S. has shifted rapidly from being a large liquefed natural gas (LNG) importer to a potential LNG exporter, LNG shipments previously destined for the U.S. have been reallocated to Europe and Asia, where demand for natural gas is growing rapidly and governments are anxious to secure supply to meet rapidly expanding needs. By volume, domestic shipments of natural gas occur over- whelmingly by pipeline. However, truck, rail, and vessel shipments of compressed natural gas (CNG) are increasing to serve markets in areas that do not have natural gas pipelines. Hydrocarbon gas liquids (HGL) transportation cannot be simply characterized, because there are numerous HGL con- stituents that can either be shipped together in various types of mixed streams or be separated into pure components prior to shipment. Ethane, propane, and butanes are com- monly shipped by pipeline, but can also be shipped by a variety of means in pressurized vessels. Pentanes and other hydrocarbon gas liquids with higher molecular weights are liquid under normal atmospheric condi- tions, and do not typically require pressurized containment vessels. Crude by Rail The EIA tracks U.S. refnery crude oil receipts. Because U.S. law currently prohibits most crude oil exports, essentially all domestic crude oil is destined to be delivered to a U.S. refinery, and consequently refinery receipt information serves as a use- ful indicator of how crude oil is being transported. Crude by rail (CBR) transport has quickly flled a void created by a lack of adequate pipeline capacity. Some adva ntages over pipel i ne t ra n s- port are lower capital costs, greater Hydrocarbon Gas Liquids The growth in U.S. onshore natural gas and oil produc- tion has also led to increased volumes of natural gas plant liquids and liquefed refnery gases, which primarily include propane, butane and ethane, isobutane, and pentanes, among others. To reduce confusion in terminology and improve its data presentation, EIA has developed the term "hydrocarbon gas liquids," or HGL, to refer to natural gas plant liquids and liquefed refnery gases, while excluding liquefed natural gas and aromatics. Between 2008 and 2014, HGL production from natural gas processing plants increased by 62 percent to 2.9 million barrels per day from 1.8 million barrels per day. Additionally, increases in oil and natural gas resources are refected not only in production fgures, but also in reserve estimates. As such, EIA estimates of recoverable reserves have been raised to refect that current technologies allow substantially greater recoveries of oil and natural gas from existing felds. According to the EIA, the seven highlighted regions accounted for 95% of U.S. oil production growth and all U.S. natural gas production growth from 2011–2013. U.S. Oil Production Growth (95%) and All U.S. Natural Gas Production Growth from 2011–2013

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