Spent the day at Hart’s Crude in Motion Conference, where the focus was on the astronomical growth of moving crude by rail.
Great presentation by Morgan Stanley on the Differentials and the complicated supply and demand equation. Interesting take on the overcompensation of the midstream players to handle the Cushing crude, with the prediction that by 2015 we will have too much pipeline capacity. This of course will move that crude by rail business further north.
Steve Elliott with Enbridge Pipeline talked about their combination pipe & rail strategy which sounds counterproductive, but the truth is that strategy has helped Enbridge capture a lot of market share quickly. And their $16 billion investment in their own infrastructure should provide plenty of opportunities for other companies to sell their product or service to Enbridge.
Strobel Starostka‘s Travis Brock echoed my belief that the US is headed to crude oil independence, and the the large huge dollar investment in solving the “Cushing Coast” problem was a one time only event. Now we will see a long sustainable growth in midstream infrastructure, something we a modalpoint call the “midstream super-cycle. And it was fascinating to see their lessons learned on rail terminal construction projects.
Steve Broker with Rangeland Energy (who was ahead of the game in the Balkans) has a bunch of stuff going on in the Delaware Basin and the Logistics of Crude Transport panel really highlighted the money to be made in the midstream segment. Something I’ve been evangelizing for years.
As usual this Hart Energy event was extremely valuable and spot on. Hats off to all involved for pulling off an extremely business focused conference!