Energy professionals from across the country gathered in Midland Thursday to get some of the latest insights from experts on the future of the midstream energy industry, and some of the challenges they are working to overcome.
Robert Phillips, chairman of Equity Partners LP, kicked off the conference, Midstream Texas, by telling those in attendance the Permian Basin is a global energy leader with significant long-term forecasts. Some of the most recent challenges related to the growth of the Permian Basin however, will be investing in infrastructure to handle long-term development and creating greater pipeline capacity to export the oil, natural gas and natural gas liquids being produced.
As it stands, the Permian Basin’s oil production has grown by more than 3 million barrels a day over the last 10 years from about 1 million barrels a day, RBN Energy Managing Director Scott Potter said. The basin also added about 9.5 billion cubic feet of natural gas production a day, and he said much more growth is expected over the next five years.
“Next year some time or definitely in 2021, the Permian Basin will hit the point where we are producing as much crude oil in the Permian Basin as we produced in the U.S., including the gulf of Mexico, in 2004,” Potter said.
But the pipelines transporting these fuels to the coast only have so much capacity, Potter said, moving about 3 million barrels a day. To make up for that, he said there are multiple pipeline projects being built expected to be completed between now and 2021 that will increase that pipeline capacity to about 4.3 million barrels a day.
“The reality is that exports are gonna be crucial to the success of our industry going forward,” Potter said.
Greg Haas, a director at Stratas Advisors, echoed what Potter said, that there is a need for drilling locally and selling globally.
“To be in the Permian is obviously a good place to be for [natural gas] liquids production,” Haas said.
Paul Hart, Midstream Editor-at-large for Oil and Gas Investor, agreed with Haas, and said the future of the Permian Basin is putting their energy products on a boat and selling it.
The Delaware Basin is expected to have the longest future for oil production in the region, EagleClaw Midstream Ventures CEO Jamie Welch said, because it was the latest discovered.
“The Delaware will drive us for many years to come, and it will probably for the next decade keep all of us very busy,” Welch said.
Tony Straquadine Jr., Executive Director of the INGAA Foundation, capped off the conference by looking at the future for natural gas in the country. He said 26,000 miles of new natural gas pipelines were expected across the U.S. by 2035, causing the creation of 725,000 new jobs, which he said were good-paying but didn’t say whether they would be permanent. He said natural gas will play an essential role in replacing retired coal and nuclear power generation capacity over the next 20 years.