This document provides an overview of the impacts of shale development on freight transportation. It discusses how advances in hydraulic fracturing and horizontal drilling have driven rapid growth in natural gas and oil production in the US. This has created demand for transportation of materials to well sites like sand, chemicals, water and pipe as well as outbound shipments of gas, NGLs, crude and refined products. It notes the impacts on rail traffic volumes and discusses trends in sand mining, transportation costs and railcar market conditions. The document also summarizes downstream impacts including fuel switching in power generation favoring gas over coal, and industrial growth in steel, fertilizer and other manufacturing sectors due to lower natural gas prices.
PLG 2013 State of Freight Summit PresentationPLG Consulting
PLG Consulting presented an overview of the current flows of materials needed to support shale oil development. This is the fifth presentation that PLG has done on the subject in the last 8 months. The company has worked with some of the largest players in the oil & gas industry to help them gain an advantage through logistics. Contact us at www.plgconsulting.com for more information.
PLG Provides Industry Updates to GE CapitalPLG Consulting
On October 15, 2013, PLG CEO Graham Brisben presented to GE Capital in New York, New York. Graham’s presentation addressed transportation updates in the Oil & Gas market which have upended traditional logistics and trading patterns in the energy industry, starting an industrial renaissance in the U.S.
PLG Consulting "Crude By Rail Report" at RailtrendsPLG Consulting
On November 21, 2013, CEO Graham Brisben presented at Railtrends Conference in New York, NY. Graham’s presentation, entitled “Crude By Rail Report,” is a consolidated version of PLG’s well-known Energy Logistics presentation with an emphasis on the following topics:
• Shale oil and oil sands impacts on crude by rail, new rail terminals, and new pipelines
• Lac Megantic’s effect on crude by rail and the tank car market
• Future crude oil logistics and trading patterns
If you have specific questions on energy related logistics or need strategic advice on the fast changing shale oil and gas industry, contact Graham at gbrisben@plgconsulting.com.
On September 25, 2013, PLG Consulting President Taylor Robinson presented at Industrial Minerals’ Frac Sands Conference in Minneapolis, Minnesota. The premise of the conference is: 'After the Gold Rush'; providing an in-depth assessment of exactly how the industry has reached its current heights and, importantly, where it is headed next. Taylor’s presentation, entitled “Mine to Market – How the Industry Has Matured,” gives current and future insight to all key aspects of the rapidly maturing frac sand supply chain.
PLG Consulting "Frac Sand - New Volume Impact" presentation given by Taylor Robinson at Industrial Minerals Conference on 9/23/2014 in Minneapolis, MN.
PLG presents, "From Mine To Market: Overcoming Supply Chain Hurdles" at 3rd F...PLG Consulting
PLG president, Taylor Robinson spoke at the 3rd annual Frac Sand Conference, an Industrial Minerals Event, held in Minneapolis, Minnesota on September 1, 2015. PLG’s presentation, From Mine To Market: Overcoming Supply Chain Hurdles, featured the latest market intelligence on the effects of the global and U.S. energy markets on the frac sand market with updates on each link of the frac sand supply chain and the small covered hopper car market. Robinson also spoke about the latest fracking technology and its impacts on the short term outlook of the frac sand industry along with opportunities for long term growth. Robinson also moderated the three logistics sessions at the conference.
This document discusses the impact of unconventional energy resources like shale oil and gas and oil sands on rail transportation in North America. It notes that technological advances have enabled increased production from these resources, driving growth in related rail shipments of materials like frac sand and crude oil. However, pipeline capacity constraints currently necessitate significant crude by rail shipments, especially of Canadian oil. The document also examines proposed regulations on rail shipments of crude oil and their potential effects. Overall rail traffic of frac sand and crude oil has grown rapidly but further growth depends on regulatory and infrastructure developments.
Plg union league railway supply group luncheonPLG Consulting
PLG Consulting is a logistics, engineering, and supply chain consulting firm established in 2001. They have over 100 clients and 250 engagements. They provide strategy, optimization, infrastructure development, and other consulting services. Their main industry verticals are energy, bulk commodities, and freight rail. The document discusses the implications of the North American energy revolution on rail transportation. New extraction technologies like hydraulic fracturing have led to surging production of oil, natural gas, and natural gas liquids in the US and Canada. This has displaced some water-borne crude imports and put North America on a path to energy independence by 2020. Crude-by-rail grew significantly from 2009 to 2014 to transport this domestic production to markets, and
PLG 2013 State of Freight Summit PresentationPLG Consulting
PLG Consulting presented an overview of the current flows of materials needed to support shale oil development. This is the fifth presentation that PLG has done on the subject in the last 8 months. The company has worked with some of the largest players in the oil & gas industry to help them gain an advantage through logistics. Contact us at www.plgconsulting.com for more information.
PLG Provides Industry Updates to GE CapitalPLG Consulting
On October 15, 2013, PLG CEO Graham Brisben presented to GE Capital in New York, New York. Graham’s presentation addressed transportation updates in the Oil & Gas market which have upended traditional logistics and trading patterns in the energy industry, starting an industrial renaissance in the U.S.
PLG Consulting "Crude By Rail Report" at RailtrendsPLG Consulting
On November 21, 2013, CEO Graham Brisben presented at Railtrends Conference in New York, NY. Graham’s presentation, entitled “Crude By Rail Report,” is a consolidated version of PLG’s well-known Energy Logistics presentation with an emphasis on the following topics:
• Shale oil and oil sands impacts on crude by rail, new rail terminals, and new pipelines
• Lac Megantic’s effect on crude by rail and the tank car market
• Future crude oil logistics and trading patterns
If you have specific questions on energy related logistics or need strategic advice on the fast changing shale oil and gas industry, contact Graham at gbrisben@plgconsulting.com.
On September 25, 2013, PLG Consulting President Taylor Robinson presented at Industrial Minerals’ Frac Sands Conference in Minneapolis, Minnesota. The premise of the conference is: 'After the Gold Rush'; providing an in-depth assessment of exactly how the industry has reached its current heights and, importantly, where it is headed next. Taylor’s presentation, entitled “Mine to Market – How the Industry Has Matured,” gives current and future insight to all key aspects of the rapidly maturing frac sand supply chain.
PLG Consulting "Frac Sand - New Volume Impact" presentation given by Taylor Robinson at Industrial Minerals Conference on 9/23/2014 in Minneapolis, MN.
PLG presents, "From Mine To Market: Overcoming Supply Chain Hurdles" at 3rd F...PLG Consulting
PLG president, Taylor Robinson spoke at the 3rd annual Frac Sand Conference, an Industrial Minerals Event, held in Minneapolis, Minnesota on September 1, 2015. PLG’s presentation, From Mine To Market: Overcoming Supply Chain Hurdles, featured the latest market intelligence on the effects of the global and U.S. energy markets on the frac sand market with updates on each link of the frac sand supply chain and the small covered hopper car market. Robinson also spoke about the latest fracking technology and its impacts on the short term outlook of the frac sand industry along with opportunities for long term growth. Robinson also moderated the three logistics sessions at the conference.
This document discusses the impact of unconventional energy resources like shale oil and gas and oil sands on rail transportation in North America. It notes that technological advances have enabled increased production from these resources, driving growth in related rail shipments of materials like frac sand and crude oil. However, pipeline capacity constraints currently necessitate significant crude by rail shipments, especially of Canadian oil. The document also examines proposed regulations on rail shipments of crude oil and their potential effects. Overall rail traffic of frac sand and crude oil has grown rapidly but further growth depends on regulatory and infrastructure developments.
Plg union league railway supply group luncheonPLG Consulting
PLG Consulting is a logistics, engineering, and supply chain consulting firm established in 2001. They have over 100 clients and 250 engagements. They provide strategy, optimization, infrastructure development, and other consulting services. Their main industry verticals are energy, bulk commodities, and freight rail. The document discusses the implications of the North American energy revolution on rail transportation. New extraction technologies like hydraulic fracturing have led to surging production of oil, natural gas, and natural gas liquids in the US and Canada. This has displaced some water-borne crude imports and put North America on a path to energy independence by 2020. Crude-by-rail grew significantly from 2009 to 2014 to transport this domestic production to markets, and
This document discusses crude-by-rail (CBR) transportation in North America. It provides background on the growth of unconventional oil and gas production from shale plays and oil sands. Technological improvements have increased productivity and lowered costs. This has driven growth in CBR to transport crude oil from production areas to refineries. The document outlines the historical phases of CBR and factors that will influence its future, such as rail capacity, regulations, and price differentials. It also summarizes projections for continued growth in CBR origins from the Bakken and Western Canada due to inadequate pipeline capacity in the short to medium term.
MARS Meeting Summer 2015-North American Energy Revolution-Implications for RailPLG Consulting
This presentation features an overview of the North American energy market with updates on PLG's Crude by Rail And Frac Sand Market report. PLG's expert analysis included market intelligence on the small covered hopper market and the U.S. industrial expansion from the shale gas production increase.
Frac Sand Market and Logistics, Plus Special Report on Permian Takeaway Logis...PLG Consulting
Frac sand supply was barely keeping up with growing demand in the 2nd quarter 2018. What changed in Q3? Was the number of Permian mines expanding or shrinking? What was happening to sand prices? Get these answers and more in this free presentation.
Rail summit gb presentation vgb final 060614PLG Consulting
This document provides an overview of shale development and its impacts on transportation. It discusses the resources and technologies enabling the North American energy revolution, including shale gas and tight oil plays. It also outlines trends in shale gas and tight oil production, processing, and transportation, including the increased use of rail and pipelines. The document summarizes how shale development is reshaping North American energy trade patterns and industrial development.
The document summarizes the implications of the North American energy revolution for rail transportation. It discusses how new extraction technologies have led to surging domestic production of oil, gas and NGLs, displacing many imports. This has led to growth in crude-by-rail as production outpaced pipeline capacity, especially for Bakken crude moving to refineries. It forecasts crude-by-rail volumes remaining stable as pipelines are built out slowly, and prices expected to rebound after a challenging 2015 enables continued production growth and frac sand/crude-by-rail demand.
2014 Enbridge Day - Gas Pipelines and ProcessingEnbridge Inc.
The document discusses opportunities for growth in Enbridge's Gas Pipelines & Processing business. It notes that significant investment will be required over the next 15 years to develop North American gas infrastructure as production increases. Enbridge's assets are well-positioned to capture opportunities from growing gas and liquids production in regions like the Western Canada Sedimentary Basin and U.S. shale plays. The company plans to pursue both expansions of existing assets and new greenfield projects to maximize profits and leverage its operational strengths.
This document discusses the use of compressed natural gas (CNG) and liquefied natural gas (LNG) for heavy duty trucking. It notes that Clean Energy is the largest alternative transportation fuel provider, fueling over 30,000 vehicles daily. It discusses their fueling services for CNG time fill, CNG fast fill, and LNG. It also discusses the current and planned natural gas fueling infrastructure across the United States. The document outlines the benefits of using natural gas vehicles for fleets, including lower operating costs and reduced greenhouse gas emissions compared to diesel. It provides examples of economic models fleets can use to evaluate the costs and savings of adopting natural gas vehicles.
From Upstream to Downstream: Opportunities and Challenges for RailPLG Consulting
With unprecedented highs in crude, NGL, and natural gas production, the US is leveraging abundant and low-cost hydrocarbons to become one of the largest energy and chemicals suppliers to the world. PLG Consulting’s CEO Graham Brisben details why this is happening and what it means for rail shipments and car demand in sand, refined products, chemicals, and other commodities. Download this free presentation given at the Rail Equipment Finance Conference 2019. In it, you’ll discover:
- What’s expected for frac sand rail shipments in 2019
- How small cube hoppers are affecting cars in storage
- The biggest stories that represent potential new rail volumes/tank car demand
- The forecast for shale-driven industrial investment
Pipeline capacity in the Permian Basin is approaching maximum capacity, leaving up to 740,000 barrels per day of crude stranded by September 2019 according to PLG Consulting. Alternatives like rail and trucking cannot make up the capacity shortfall. This will result in an estimated $40 million per day or 200 million barrels of unrealized revenue for Permian producers over the next 16 months until new pipeline projects are completed. To mitigate the capacity constraints, producers may be forced to shift rigs and completions to other shale plays in order to maintain production growth goals.
The Future Has Arrived: Petrochemicals And Energy By Rail | Southwest Rail Sh...PLG Consulting
The document summarizes a presentation given by Graham Brisben, CEO of PLG Consulting, at an annual meeting on February 21, 2018 in San Antonio, TX. The presentation covers topics including the energy and chemicals supply chain, recent developments in energy production and energy-by-rail transportation, and the ongoing US chemical industry build-out driven by shale gas resources. Charts and figures are included to illustrate trends in areas such as crude oil production, frac sand consumption, regional sand mine development, and projected industrial investment and rail impacts through 2025 resulting from shale gas-related expansion.
Petrochemical Supply Chain and Logistics 2017Taylor Robinson
This document summarizes the presentation by Taylor Robinson of PLG Consulting on shale gas, industrial expansion, and polyethylene. The presentation covers:
1) An overview of the US shale gas revolution and its impact on markets and logistics.
2) The impact of industrial build-out driven by shale gas, including $145B in investments through 2025 focused on petrochemicals and plastics in Texas and Louisiana.
3) Updates on North American polyethylene expansion, including capacity growth of 31% by 2020 that will require exports to grow from 2.5MM tons currently to over 6MM tons.
Robinson presents "State of the Proppants Market" presentationPLG Consulting
This document provides an overview and analysis of the proppants market from a presentation by Taylor Robinson of PLG Consulting. It summarizes that demand for natural sand is rising significantly due to new fracking techniques, while ceramic and resin coated volumes are flat to down. Supply of natural sand is keeping pace through new mines and adequate transloading infrastructure. It also notes that consolidation and improving logistics efficiency will be key for companies to succeed in the proppants industry in coming years as customers focus on reducing total costs.
The document summarizes Cliffs Chromite Project, which proposes developing a chromite mine, processing facility, transportation system, and ferrochrome production facility in Ontario, Canada. The project would involve open-pit mining of up to 30 million tons of material per year from the Black Thor deposit, producing 4.4 million tons of chromite concentrate annually. An all-season road and rail system would transport the concentrate over 260 km to the ferrochrome production facility near Capreol, which would produce 1,500 tons of ferrochrome per day. The project has the potential to affect traditional territories and rights of Marten Falls, Webequie, and Wahnapitae First Nations.
North American Oil & Gas and Petrochemical Supply Chain: Latest Impact to RailPLG Consulting
With the current news cycle, keeping well-informed about the petrochemical, oil and gas industries can be a full-time job. Executives looking to improve their operations and understand market dynamics should check out this presentation given by PLG Consulting at the Midwest Association of Rail Shippers (MARS) 2018 Summer Meeting, where we covered:
- How oil prices will affect hydrocarbon production
- Key frac sand and logistics trends
- Opportunities for chemical, plastics and crude by rail
- Petrochemical investment forecasts
How Northeast Petrochemical Logistics Will Change The Industry LandscapePLG Consulting
In this presentation, originally given at the Northeast U.S. Petrochemical Conference in the summer of 2018, PLG Consulting covered:
- Development factors and challenges in NE petrochemical production over the next decade and what it means for rail shipments and car demand in sand, refined products, chemicals, and other commodities
- Best practices in petrochemical industry logistics
- Developing logistics and supply chain strategies that lead to a competitive advantage
Building An Earnings Accretive Energy CompanyKW Miller
The document discusses the natural gas market and production in the United States. It notes that natural gas prices are currently below $4/mmbtu but argues they will rise significantly due to new environmental taxes on fracking, deficiencies in gas distribution infrastructure, and the unknown production decline curve for shale gas wells. It also argues that if gas-fired power plants and other gas consumers increased usage, it would strain the distribution system and diminish any claims of excess gas supply. The document advocates for investment in natural gas infrastructure and production companies.
PLG MARS Presentation Energy Logistics 070913PLG Consulting
This document discusses the impacts of increased shale oil and gas development on freight transportation and logistics. Key points include:
1) Advances in hydraulic fracturing and horizontal drilling have driven large increases in U.S. oil and natural gas production from shale plays. This has disrupted traditional supply chains and driven growth in related industries like petrochemicals and steel manufacturing.
2) Shale development requires large volumes of frac sand, water, and other inputs to be transported to well sites by rail and truck. It also produces oil, natural gas, and natural gas liquids that must be moved out of plays through pipelines, rail, and trucks.
3) Abundant natural gas supplies are displacing coal
PLG Presents to Midwest Association of Rail ShippersPLG Consulting
On July 9, 2013, CEO Graham Brisben presented PLG’s perspective of the shifting economy by examining the impact of crude by rail in today’s marketplace. More specifically, Graham discussed the impact of shale oil and gas which is upending traditional logistics and trading patterns in the energy industry which has started an industrial renaissance in the U.S.
The Energy Opportunity in Oil & Natural Gas: Crude Oil is Only the BeginningPLG Consulting
On June 3, 2013, Gordon Heisler, Senior Consultant at PLG Consulting presented at the American Railway Development Association’s 107th Annual Meeting in San Francisco, CA. Gordon’s presentation, entitled “The Energy Opportunity in Oil & Natural Gas. Crude Oil is Only the Beginning,” analyzes and forecasts the dramatic impact of shale oil and gas which has upended traditional logistics and trading patterns in the energy industry, starting an industrial renaissance in the US.
This document provides an overview of the North American energy revolution driven by shale oil and gas resources. It discusses the abundant recoverable unconventional energy resources including shale plays and oil sands. New technologies like hydraulic fracturing and horizontal drilling have unlocked these resources and driven down costs. This has led to a surge in production, displaced imports, and growing exports. It also discusses the infrastructure challenges of moving these new sources of supply and the impacts on downstream industries.
This document discusses crude-by-rail (CBR) transportation in North America. It provides background on the growth of unconventional oil and gas production from shale plays and oil sands. Technological improvements have increased productivity and lowered costs. This has driven growth in CBR to transport crude oil from production areas to refineries. The document outlines the historical phases of CBR and factors that will influence its future, such as rail capacity, regulations, and price differentials. It also summarizes projections for continued growth in CBR origins from the Bakken and Western Canada due to inadequate pipeline capacity in the short to medium term.
MARS Meeting Summer 2015-North American Energy Revolution-Implications for RailPLG Consulting
This presentation features an overview of the North American energy market with updates on PLG's Crude by Rail And Frac Sand Market report. PLG's expert analysis included market intelligence on the small covered hopper market and the U.S. industrial expansion from the shale gas production increase.
Frac Sand Market and Logistics, Plus Special Report on Permian Takeaway Logis...PLG Consulting
Frac sand supply was barely keeping up with growing demand in the 2nd quarter 2018. What changed in Q3? Was the number of Permian mines expanding or shrinking? What was happening to sand prices? Get these answers and more in this free presentation.
Rail summit gb presentation vgb final 060614PLG Consulting
This document provides an overview of shale development and its impacts on transportation. It discusses the resources and technologies enabling the North American energy revolution, including shale gas and tight oil plays. It also outlines trends in shale gas and tight oil production, processing, and transportation, including the increased use of rail and pipelines. The document summarizes how shale development is reshaping North American energy trade patterns and industrial development.
The document summarizes the implications of the North American energy revolution for rail transportation. It discusses how new extraction technologies have led to surging domestic production of oil, gas and NGLs, displacing many imports. This has led to growth in crude-by-rail as production outpaced pipeline capacity, especially for Bakken crude moving to refineries. It forecasts crude-by-rail volumes remaining stable as pipelines are built out slowly, and prices expected to rebound after a challenging 2015 enables continued production growth and frac sand/crude-by-rail demand.
2014 Enbridge Day - Gas Pipelines and ProcessingEnbridge Inc.
The document discusses opportunities for growth in Enbridge's Gas Pipelines & Processing business. It notes that significant investment will be required over the next 15 years to develop North American gas infrastructure as production increases. Enbridge's assets are well-positioned to capture opportunities from growing gas and liquids production in regions like the Western Canada Sedimentary Basin and U.S. shale plays. The company plans to pursue both expansions of existing assets and new greenfield projects to maximize profits and leverage its operational strengths.
This document discusses the use of compressed natural gas (CNG) and liquefied natural gas (LNG) for heavy duty trucking. It notes that Clean Energy is the largest alternative transportation fuel provider, fueling over 30,000 vehicles daily. It discusses their fueling services for CNG time fill, CNG fast fill, and LNG. It also discusses the current and planned natural gas fueling infrastructure across the United States. The document outlines the benefits of using natural gas vehicles for fleets, including lower operating costs and reduced greenhouse gas emissions compared to diesel. It provides examples of economic models fleets can use to evaluate the costs and savings of adopting natural gas vehicles.
From Upstream to Downstream: Opportunities and Challenges for RailPLG Consulting
With unprecedented highs in crude, NGL, and natural gas production, the US is leveraging abundant and low-cost hydrocarbons to become one of the largest energy and chemicals suppliers to the world. PLG Consulting’s CEO Graham Brisben details why this is happening and what it means for rail shipments and car demand in sand, refined products, chemicals, and other commodities. Download this free presentation given at the Rail Equipment Finance Conference 2019. In it, you’ll discover:
- What’s expected for frac sand rail shipments in 2019
- How small cube hoppers are affecting cars in storage
- The biggest stories that represent potential new rail volumes/tank car demand
- The forecast for shale-driven industrial investment
Pipeline capacity in the Permian Basin is approaching maximum capacity, leaving up to 740,000 barrels per day of crude stranded by September 2019 according to PLG Consulting. Alternatives like rail and trucking cannot make up the capacity shortfall. This will result in an estimated $40 million per day or 200 million barrels of unrealized revenue for Permian producers over the next 16 months until new pipeline projects are completed. To mitigate the capacity constraints, producers may be forced to shift rigs and completions to other shale plays in order to maintain production growth goals.
The Future Has Arrived: Petrochemicals And Energy By Rail | Southwest Rail Sh...PLG Consulting
The document summarizes a presentation given by Graham Brisben, CEO of PLG Consulting, at an annual meeting on February 21, 2018 in San Antonio, TX. The presentation covers topics including the energy and chemicals supply chain, recent developments in energy production and energy-by-rail transportation, and the ongoing US chemical industry build-out driven by shale gas resources. Charts and figures are included to illustrate trends in areas such as crude oil production, frac sand consumption, regional sand mine development, and projected industrial investment and rail impacts through 2025 resulting from shale gas-related expansion.
Petrochemical Supply Chain and Logistics 2017Taylor Robinson
This document summarizes the presentation by Taylor Robinson of PLG Consulting on shale gas, industrial expansion, and polyethylene. The presentation covers:
1) An overview of the US shale gas revolution and its impact on markets and logistics.
2) The impact of industrial build-out driven by shale gas, including $145B in investments through 2025 focused on petrochemicals and plastics in Texas and Louisiana.
3) Updates on North American polyethylene expansion, including capacity growth of 31% by 2020 that will require exports to grow from 2.5MM tons currently to over 6MM tons.
Robinson presents "State of the Proppants Market" presentationPLG Consulting
This document provides an overview and analysis of the proppants market from a presentation by Taylor Robinson of PLG Consulting. It summarizes that demand for natural sand is rising significantly due to new fracking techniques, while ceramic and resin coated volumes are flat to down. Supply of natural sand is keeping pace through new mines and adequate transloading infrastructure. It also notes that consolidation and improving logistics efficiency will be key for companies to succeed in the proppants industry in coming years as customers focus on reducing total costs.
The document summarizes Cliffs Chromite Project, which proposes developing a chromite mine, processing facility, transportation system, and ferrochrome production facility in Ontario, Canada. The project would involve open-pit mining of up to 30 million tons of material per year from the Black Thor deposit, producing 4.4 million tons of chromite concentrate annually. An all-season road and rail system would transport the concentrate over 260 km to the ferrochrome production facility near Capreol, which would produce 1,500 tons of ferrochrome per day. The project has the potential to affect traditional territories and rights of Marten Falls, Webequie, and Wahnapitae First Nations.
North American Oil & Gas and Petrochemical Supply Chain: Latest Impact to RailPLG Consulting
With the current news cycle, keeping well-informed about the petrochemical, oil and gas industries can be a full-time job. Executives looking to improve their operations and understand market dynamics should check out this presentation given by PLG Consulting at the Midwest Association of Rail Shippers (MARS) 2018 Summer Meeting, where we covered:
- How oil prices will affect hydrocarbon production
- Key frac sand and logistics trends
- Opportunities for chemical, plastics and crude by rail
- Petrochemical investment forecasts
How Northeast Petrochemical Logistics Will Change The Industry LandscapePLG Consulting
In this presentation, originally given at the Northeast U.S. Petrochemical Conference in the summer of 2018, PLG Consulting covered:
- Development factors and challenges in NE petrochemical production over the next decade and what it means for rail shipments and car demand in sand, refined products, chemicals, and other commodities
- Best practices in petrochemical industry logistics
- Developing logistics and supply chain strategies that lead to a competitive advantage
Building An Earnings Accretive Energy CompanyKW Miller
The document discusses the natural gas market and production in the United States. It notes that natural gas prices are currently below $4/mmbtu but argues they will rise significantly due to new environmental taxes on fracking, deficiencies in gas distribution infrastructure, and the unknown production decline curve for shale gas wells. It also argues that if gas-fired power plants and other gas consumers increased usage, it would strain the distribution system and diminish any claims of excess gas supply. The document advocates for investment in natural gas infrastructure and production companies.
PLG MARS Presentation Energy Logistics 070913PLG Consulting
This document discusses the impacts of increased shale oil and gas development on freight transportation and logistics. Key points include:
1) Advances in hydraulic fracturing and horizontal drilling have driven large increases in U.S. oil and natural gas production from shale plays. This has disrupted traditional supply chains and driven growth in related industries like petrochemicals and steel manufacturing.
2) Shale development requires large volumes of frac sand, water, and other inputs to be transported to well sites by rail and truck. It also produces oil, natural gas, and natural gas liquids that must be moved out of plays through pipelines, rail, and trucks.
3) Abundant natural gas supplies are displacing coal
PLG Presents to Midwest Association of Rail ShippersPLG Consulting
On July 9, 2013, CEO Graham Brisben presented PLG’s perspective of the shifting economy by examining the impact of crude by rail in today’s marketplace. More specifically, Graham discussed the impact of shale oil and gas which is upending traditional logistics and trading patterns in the energy industry which has started an industrial renaissance in the U.S.
The Energy Opportunity in Oil & Natural Gas: Crude Oil is Only the BeginningPLG Consulting
On June 3, 2013, Gordon Heisler, Senior Consultant at PLG Consulting presented at the American Railway Development Association’s 107th Annual Meeting in San Francisco, CA. Gordon’s presentation, entitled “The Energy Opportunity in Oil & Natural Gas. Crude Oil is Only the Beginning,” analyzes and forecasts the dramatic impact of shale oil and gas which has upended traditional logistics and trading patterns in the energy industry, starting an industrial renaissance in the US.
This document provides an overview of the North American energy revolution driven by shale oil and gas resources. It discusses the abundant recoverable unconventional energy resources including shale plays and oil sands. New technologies like hydraulic fracturing and horizontal drilling have unlocked these resources and driven down costs. This has led to a surge in production, displaced imports, and growing exports. It also discusses the infrastructure challenges of moving these new sources of supply and the impacts on downstream industries.
The document summarizes the development of the frac sand supply chain industry from its early growth to the current trends toward consolidation and optimization. It discusses how demand is driven by shale drilling activity, the major players in sand mining and logistics, and cost factors. The presentation predicts further consolidation, with the most efficient integrated supply chains winning by leveraging every link to provide the lowest total delivered cost. Within 3-5 years the industry will likely see significant growth driven by liquids production, with "tier 1" suppliers focusing on reducing costs through continuous improvement and gaining volume leverage.
PLG CEO and Founder, Graham Brisben spoke at the North American Rail Shippers Annual Meeting in San Francisco, California on May 24, 2017. Mr. Brisben’s presentation North American Energy Insights: Special Focus - Mexico included:
Overview of the current energy market in North America
Information on the key impacts in the rail industry
Emerging opportunities for rail in Mexico
PLG President Taylor Robinson presented at the Crude Oil Transportation 2014 conference in Calgary, Alberta on September 3, 2014. Mr. Robinson’s analysis focused on comparing the crude by rail model created in the Bakken over the past five years with the new and quickly evolving Western Canadian model. As well, the potential impact of U.S. DOT regulatory changes are shared in the presentation.
Industrial minerals oilfield minerals outlook 2014 finalPLG Consulting
1. The document discusses the state of the proppants market, including trends in demand and supply for different proppant types like natural sand, ceramics, and resin-coated sand.
2. It outlines key logistics components of the frac sand supply chain from mining to delivery at the wellhead and notes that efficient unit train operations are important for lowering costs.
3. New fracking techniques are driving increased demand for frac sand as well pad development and optimized well design techniques use more sand per well.
This document discusses PLG Consulting's expertise in bulk commodity logistics, energy and chemical markets, and logistics infrastructure design. It provides an overview of PLG's team experience, core expertise, and services. It also includes presentations on trends in US shale energy supply chains including production and transportation of crude oil, natural gas, natural gas liquids, and frac sand.
PLG Provides Industry Update to Stifel Nicolaus InvestorsPLG Consulting
On May 24, 2013, PLG CEO Graham Brisben and President Taylor Robinson presented to industry investors and analysts via teleconference sponsored by Stifel Nicolaus Capital Markets. Graham’s presentation was entitled “Crude by Rail Update.” Taylor’s presentation was entitled “Shale Gas – Driver of Reshoring.” The presentations addressed the current crude-by-rail market in the US, as well as industry trends leading to a renewed reshoring focus for US manufacturers.
PLG Consulting’s CEO, Graham Brisben presented his presentation Shale Developments: The Evolving Transportation Impacts to the Broe Group on June 23, 2014.
North American Energy & Petchem Markets-Future Imapct To RailTaylor Robinson
overviews of the North American oil & gas and petrochemical markets, as well as, key insights in the lower 48 shale plays and frac sand basins. The presentation included analysis of the supply and demand of U.S. NGL’s, and impact of the shale gas expansion on projected rail volumes. The topic of Mexican energy reform led the audience into look at specific opportunities south of the border, and ended with a big picture summary by commodity at the rail and railcar markets.
North american energy & Petchem Markets Future Impact to railPLG Consulting
This document summarizes the presentation given by PLG Consulting on the future impact of North American energy and petrochemicals on rail. Key points include:
- Growing US oil and gas production, especially in the Permian basin, is supporting a return to growth for crude by rail despite declines since 2013 peaks. LPG by rail has surpassed crude in volume.
- Fracking techniques are becoming more intensive, requiring more sand and water per well, driving increased demand for proppants and frac sand transported by rail. Frac sand volumes have recovered to near peak levels.
- Western Canadian crude production growth over the next two years will outpace new pipeline capacity, increasing crude by rail volumes from the current 125
Plg refc presentation 2015 v gb 16 9 aspect final 030115PLG Consulting
This document provides an overview of PLG Consulting, a logistics and supply chain consulting firm, and discusses the implications of the North American energy revolution for the rail industry. PLG Consulting has over a decade of experience in logistics, engineering, and supply chain consulting for over 200 clients in bulk logistics, freight rail, energy, chemicals, and private equity. The document summarizes the growth of unconventional oil and gas extraction from US shale and Canadian oil sands due to new technologies, leading to surging domestic production and declining imports to North America. This energy boom has significant implications for growing crude by rail transportation on the continent.
This document provides an overview of PLG Consulting, a boutique consulting firm focused on logistics, engineering, and supply chain services for the energy and bulk commodities industries. It discusses PLG's experience in crude by rail projects, including optimization, commercial negotiations, infrastructure design and engineering. The document also summarizes trends in North American energy production driven by shale oil and gas, and the resulting impacts on crude transportation and infrastructure needs. It includes forecasts for growth in crude by rail volumes from the Bakken and Western Canada through 2019 under a low oil price scenario.
This document provides an overview and analysis of the proppants market from a presentation by Taylor Robinson of PLG Consulting. It summarizes that demand for natural sand is rising significantly due to new fracking techniques, while ceramic and resin coated volumes are flat to down. Supply of natural sand is adequate as new mines continue to come online. Unit train shipping has been a major logistical development, while trucking remains regional. The presentation examines proppant supply chains, mining and processing locations, major shipping flows, and rail transport. It identifies consolidation, efficient supply chains, and cost reduction as keys for companies going forward.
This document summarizes a conference call hosted by Stifel Capital Markets on December 9, 2013. The call featured two presentations on topics related to the shale gas and oil industries in the United States: 1) The implications of shale gas for the resurgence of US manufacturing, presented by Taylor Robinson of PLG Consulting. 2) An analysis of the growth of crude oil transport by rail, or "crude by rail", presented by Graham Brisben also of PLG Consulting. The document provides background on PLG Consulting and outlines the agenda and dial-in details for the conference call.
PLG Rail Equipment Finance Presentation March 2014PLG Consulting
This document provides an overview of shale development impacts on transportation and logistics. It discusses how shale development has increased demand for rail transportation of materials like frac sand, crude oil, and feedstocks. It also notes that while shale-related rail traffic has grown, it remains relatively small compared to existing coal volumes. The document summarizes trends in various shale-related commodities and outlines questions around the future of industries like frac sand and crude by rail.
Supply is barely keeping up with growing demand in Q2, see when new supply will overtake demand, frac sand growth drivers, frac sand mega trends, and much more.
The U.S. Truck Market In Crisis - PLG Consulting PLG Consulting
After an extended period of ample truckload capacity and weak carrier pricing power, U.S. shippers are now finding themselves in a tight market with rapidly rising rates. Major truck shippers are having trouble covering loads, paying higher spot rates and are facing increasing intermodal costs. View this presentation to learn why and what you can do about it or visit our website for the full webinar recording.
From Drilling to Downstream: Opportunities And Challenges For Rail Carriers |...PLG Consulting
With new highs in crude, NGL, and natural gas production, the US is leveraging abundant and low-cost hydrocarbons to become one of the largest suppliers of energy and chemicals to the world. PLG Consulting’s CEO Graham Brisben explains why this is happening and what it means for rail shipments and car demand in sand, refined products, chemicals, and other commodities.
Petrochemical Supply Chain and Logistics 2017PLG Consulting
This document summarizes the presentation by Taylor Robinson of PLG Consulting on shale gas, industrial expansion, and polyethylene. The presentation covers:
1) An overview of the US shale gas revolution and its impact on markets and logistics.
2) The impact of industrial build-out driven by shale gas, including $145B in investments through 2025 focused on petrochemicals and plastics in Texas and Louisiana.
3) Updates on North American polyethylene expansion, including capacity growth of 31% by 2020 that will require exports to grow from 2.5MM tons currently to over 6MM tons.
Permian basin frac design & New completions technologies 2017PLG Consulting
This document discusses trends in the frac sand market and Permian basin frac sand trends. Some key points:
- Regional frac sand is growing its market share as it provides lower total delivered costs compared to northern white sand transported long distances. New regional sand mines are opening in Texas to supply the growing Permian basin demand.
- The Permian basin frac sand demand is growing rapidly due to increasing rig counts, lateral lengths, and sand intensity in completions. Dune sand mines are proliferating in West Texas to supply this demand but face challenges from water availability, wildlife regulations, and lack of available workforce.
- As frac sand volumes increase, the focus is shifting to "last mile" logistics of transport
JP Morgan Transportation and Logistics - Frac Sand UpdatePLG Consulting
This document provides an overview and analysis of the frac sand supply chain and market. It discusses trends driving increased use of regional frac sand sources, such as higher intensity drilling increasing sand volumes used per well. The emergence of sand mines in the Permian Basin is a major development that could significantly reduce logistics costs. However, challenges for Permian sand include developing adequate infrastructure and workforce to support major volumes. The document also covers the impacts of new regulations on trucking and silica dust exposure.
-Sandonomics ’17 - Regionalized Value, Distance Matters to the DJ and Bakken was presented on September 13, 2017 at the 5th Frac Sand Conference hosted by Industrial Minerals Events in Denver, Colorado. Taylor Robinson, President of PLG Consulting, and Joel Schneyer, Managing Director at Headwaters MB, provided the latest analysis of the fluctuating frac sand market. The presentation included a look at proppant consumption and grade preferences by basin, insights into the logistical challenges and requirements, and the latest information for frac suppliers to manage costs from the mine to the well head.
schneyer robinson
.5th frac sand_conf_
Expert Perspective on the Frac Sand Market and Supply Chain - schneyer robinson PLG Consulting
Latest analysis on the frac sand market and supply chain. Expert Perspectives on the Frac Sand Market and Supply Chain.
Schneyer Robinson
06082017 final
This document summarizes key logistical challenges that could impact petrochemical engineering project timelines. It notes that logistics capacity constraints will increase over the next decade due to rail, trucking, and marine congestion. Both project and operational logistics require expertise to navigate these challenges. The document recommends integrating logistics experts throughout the project life cycle to provide flexibility and avoid cost overruns from unforeseen logistical issues.
PLG Consulting Appalachian logistics League May 5, 2015PLG Consulting
PLG president, Taylor Robinson spoke on May 5, 2015 at the 65th annual Appalachian Logistics League meeting. Mr. Robinson presentedThe North American Energy Revolution: The Implication for Logistics. The meeting was an opportunity for members to network and discuss the ever changing industry of Supply Chain and Logistics with a primary focus on the impacts to the region.
This document provides an overview and analysis of the implications of lower oil prices for the North American rail and rail equipment markets from PLG Consulting. It notes that while shale oil rig counts are falling quickly in response to low prices, US and Canadian crude oil production will still grow in the medium term. It forecasts that crude by rail volumes will continue to increase through 2019, with the Bakken and Western Canada being the main drivers. Pipeline buildout remains a key issue, and crude by rail provides flexibility as an option to pipelines.
This document provides an overview and analysis of the implications of lower oil prices for the North American rail and rail equipment markets from PLG Consulting. It notes that while shale oil rig counts are falling quickly in response to low prices, US and Canadian crude oil production will still grow in the medium term. It forecasts that crude by rail volumes will continue to increase through 2019, with the Bakken and Western Canada being the main drivers. Pipeline buildout remains a key issue, and crude by rail provides flexibility as an option to pipelines.
Goldman sachs industrial conference nov 12, 2014 t robinsonPLG Consulting
Taylor Robinson of PLG Consulting gave a presentation on how shale gas will drive a US manufacturing revolution. The presentation discussed:
1) How technological advances like fracking and horizontal drilling have unlocked vast shale gas resources in North America, leading to an energy revolution with lower domestic energy costs.
2) How the abundance of shale gas and natural gas liquids (NGLs) like ethane provide a competitive advantage for US chemical and manufacturing industries that use gas and NGLs as feedstocks or fuel.
3) That the US now has a substantial material cost advantage compared to other regions due to low gas prices, which could enable traditional manufacturing to return to North America as material costs typically represent 60-70% of
This document provides an overview of energy production, transportation, and consumption. It discusses topics like fracking, the Keystone XL pipeline, coal and natural gas production, and unconventional oil and gas resources. It also summarizes changes in North American energy infrastructure and flows to accommodate increasing domestic production.
This presentation by Juraj Čorba, Chair of OECD Working Party on Artificial Intelligence Governance (AIGO), was made during the discussion “Artificial Intelligence, Data and Competition” held at the 143rd meeting of the OECD Competition Committee on 12 June 2024. More papers and presentations on the topic can be found at oe.cd/aicomp.
This presentation was uploaded with the author’s consent.
This presentation by Professor Giuseppe Colangelo, Jean Monnet Professor of European Innovation Policy, was made during the discussion “The Intersection between Competition and Data Privacy” held at the 143rd meeting of the OECD Competition Committee on 13 June 2024. More papers and presentations on the topic can be found at oe.cd/ibcdp.
This presentation was uploaded with the author’s consent.
This presentation by Katharine Kemp, Associate Professor at the Faculty of Law & Justice at UNSW Sydney, was made during the discussion “The Intersection between Competition and Data Privacy” held at the 143rd meeting of the OECD Competition Committee on 13 June 2024. More papers and presentations on the topic can be found at oe.cd/ibcdp.
This presentation was uploaded with the author’s consent.
Why Psychological Safety Matters for Software Teams - ACE 2024 - Ben Linders.pdfBen Linders
Psychological safety in teams is important; team members must feel safe and able to communicate and collaborate effectively to deliver value. It’s also necessary to build long-lasting teams since things will happen and relationships will be strained.
But, how safe is a team? How can we determine if there are any factors that make the team unsafe or have an impact on the team’s culture?
In this mini-workshop, we’ll play games for psychological safety and team culture utilizing a deck of coaching cards, The Psychological Safety Cards. We will learn how to use gamification to gain a better understanding of what’s going on in teams. Individuals share what they have learned from working in teams, what has impacted the team’s safety and culture, and what has led to positive change.
Different game formats will be played in groups in parallel. Examples are an ice-breaker to get people talking about psychological safety, a constellation where people take positions about aspects of psychological safety in their team or organization, and collaborative card games where people work together to create an environment that fosters psychological safety.
Suzanne Lagerweij - Influence Without Power - Why Empathy is Your Best Friend...Suzanne Lagerweij
This is a workshop about communication and collaboration. We will experience how we can analyze the reasons for resistance to change (exercise 1) and practice how to improve our conversation style and be more in control and effective in the way we communicate (exercise 2).
This session will use Dave Gray’s Empathy Mapping, Argyris’ Ladder of Inference and The Four Rs from Agile Conversations (Squirrel and Fredrick).
Abstract:
Let’s talk about powerful conversations! We all know how to lead a constructive conversation, right? Then why is it so difficult to have those conversations with people at work, especially those in powerful positions that show resistance to change?
Learning to control and direct conversations takes understanding and practice.
We can combine our innate empathy with our analytical skills to gain a deeper understanding of complex situations at work. Join this session to learn how to prepare for difficult conversations and how to improve our agile conversations in order to be more influential without power. We will use Dave Gray’s Empathy Mapping, Argyris’ Ladder of Inference and The Four Rs from Agile Conversations (Squirrel and Fredrick).
In the session you will experience how preparing and reflecting on your conversation can help you be more influential at work. You will learn how to communicate more effectively with the people needed to achieve positive change. You will leave with a self-revised version of a difficult conversation and a practical model to use when you get back to work.
Come learn more on how to become a real influencer!
This presentation by Thibault Schrepel, Associate Professor of Law at Vrije Universiteit Amsterdam University, was made during the discussion “Artificial Intelligence, Data and Competition” held at the 143rd meeting of the OECD Competition Committee on 12 June 2024. More papers and presentations on the topic can be found at oe.cd/aicomp.
This presentation was uploaded with the author’s consent.
This presentation by OECD, OECD Secretariat, was made during the discussion “The Intersection between Competition and Data Privacy” held at the 143rd meeting of the OECD Competition Committee on 13 June 2024. More papers and presentations on the topic can be found at oe.cd/ibcdp.
This presentation was uploaded with the author’s consent.
This presentation by OECD, OECD Secretariat, was made during the discussion “Artificial Intelligence, Data and Competition” held at the 143rd meeting of the OECD Competition Committee on 12 June 2024. More papers and presentations on the topic can be found at oe.cd/aicomp.
This presentation was uploaded with the author’s consent.
This presentation by Nathaniel Lane, Associate Professor in Economics at Oxford University, was made during the discussion “Pro-competitive Industrial Policy” held at the 143rd meeting of the OECD Competition Committee on 12 June 2024. More papers and presentations on the topic can be found at oe.cd/pcip.
This presentation was uploaded with the author’s consent.
Carrer goals.pptx and their importance in real lifeartemacademy2
Career goals serve as a roadmap for individuals, guiding them toward achieving long-term professional aspirations and personal fulfillment. Establishing clear career goals enables professionals to focus their efforts on developing specific skills, gaining relevant experience, and making strategic decisions that align with their desired career trajectory. By setting both short-term and long-term objectives, individuals can systematically track their progress, make necessary adjustments, and stay motivated. Short-term goals often include acquiring new qualifications, mastering particular competencies, or securing a specific role, while long-term goals might encompass reaching executive positions, becoming industry experts, or launching entrepreneurial ventures.
Moreover, having well-defined career goals fosters a sense of purpose and direction, enhancing job satisfaction and overall productivity. It encourages continuous learning and adaptation, as professionals remain attuned to industry trends and evolving job market demands. Career goals also facilitate better time management and resource allocation, as individuals prioritize tasks and opportunities that advance their professional growth. In addition, articulating career goals can aid in networking and mentorship, as it allows individuals to communicate their aspirations clearly to potential mentors, colleagues, and employers, thereby opening doors to valuable guidance and support. Ultimately, career goals are integral to personal and professional development, driving individuals toward sustained success and fulfillment in their chosen fields.
This presentation by OECD, OECD Secretariat, was made during the discussion “Competition and Regulation in Professions and Occupations” held at the 77th meeting of the OECD Working Party No. 2 on Competition and Regulation on 10 June 2024. More papers and presentations on the topic can be found at oe.cd/crps.
This presentation was uploaded with the author’s consent.
This presentation by Professor Alex Robson, Deputy Chair of Australia’s Productivity Commission, was made during the discussion “Competition and Regulation in Professions and Occupations” held at the 77th meeting of the OECD Working Party No. 2 on Competition and Regulation on 10 June 2024. More papers and presentations on the topic can be found at oe.cd/crps.
This presentation was uploaded with the author’s consent.
Collapsing Narratives: Exploring Non-Linearity • a micro report by Rosie WellsRosie Wells
Insight: In a landscape where traditional narrative structures are giving way to fragmented and non-linear forms of storytelling, there lies immense potential for creativity and exploration.
'Collapsing Narratives: Exploring Non-Linearity' is a micro report from Rosie Wells.
Rosie Wells is an Arts & Cultural Strategist uniquely positioned at the intersection of grassroots and mainstream storytelling.
Their work is focused on developing meaningful and lasting connections that can drive social change.
Please download this presentation to enjoy the hyperlinks!
This presentation by OECD, OECD Secretariat, was made during the discussion “Pro-competitive Industrial Policy” held at the 143rd meeting of the OECD Competition Committee on 12 June 2024. More papers and presentations on the topic can be found at oe.cd/pcip.
This presentation was uploaded with the author’s consent.
XP 2024 presentation: A New Look to Leadershipsamililja
Presentation slides from XP2024 conference, Bolzano IT. The slides describe a new view to leadership and combines it with anthro-complexity (aka cynefin).
1. 1
Oil & Natural Gas:
The Evolving Freight
Transportation Impacts
Prepared for
July 30, 2013 Jackson Hole, WY
GE Capital Q3 All
Employee Meeting
Logis&cs
Engineering
Supply
Chain
CIT
Rail Resources Conference
2. 2
» Boutique consulting firm specializing in logistics, engineering,
and supply chain
§ Established in 2001
§ Over 100 clients and 250 engagements
» Headquarters in Chicago USA, with team members
throughout the US and with “on the ground” experience in:
§ North America / Europe / South America / Asia / Middle East
» Consulting services
§ Strategy & optimization
§ Assessments & benchmarking
§ Transportation assets & infrastructure
§ Logistics operations
§ M&A/investments/private equity
» Key industry verticals
§ Oil & gas
§ Chemicals & plastics
§ Wind energy & project cargo
§ Bulk commodities (minerals, mining, agricultural)
§ Industrial manufactured goods
§ Private equity
About PLG Consulting
4. 4
Hydraulic Fracturing and
Horizontal Drilling
» Rapid evolution of drilling technology
§ Fracking first used in 1947
§ Revolutionary advances since 2009
§ Time required for drilling 15,000+ ft. well cut in half in last
two years (nine days vs. 18)
§ Dramatic increase in efficiency per rig, making rig count
alone no longer a significant indicator of production
§ Hydraulic fracturing/horizontal drilling yields 3-10x the
initial production rate of conventional wells
» US uniquely positioned for the techniques
§ Private mineral rights
§ Drilling intensity (wells per acre)
§ 90% of rig fleet equipped for horizontal drilling
» Rapid ROI for E&P companies
§ Typical well earns back capital cost in 1-2 years
§ Depending on play productivity, “break even” point of
$40-85/bbl
§ Liquid plays providing highest returns
Source: L. Maugeri, Harvard Kennedy School; RBN; PLG analysis
6. 6
Shale Driving Growth in Natural
Gas and Crude Oil Production
Source: Baker Hughes 2013
GAS OIL THERMAL
Source: Baker Hughes
U.S. Crude Oil Production
Source: EIA
April 2013
7.35 MM bpd
» 1,759 rigs in operation in USA as of June 21, 2013
» Dramatic production growth
§ 700% increase in gas production since 2007; forecast to grow 9
Bcf/d from 2012-2018
§ Domestic oil production at 21 year high; forecast to reach 10MM
bbl/d by 2018
» IEA projects US to surpass Saudi Arabia in oil
output, Russia in gas output by 2020
8. 8
Shale Development Supply Chain
and Downstream Impacts
Feedstock (Ethane)
Byproduct (Condensate)
Home Heating (Propane)
Other Fuels
Other Fuels
Gasoline
Inputs >> Wellhead >> Direct Output >> Thermal >> Fuels >> Raw Materials >> Downstream Products
Gas
NGLs
Crude
Proppants
OCTG
Chemicals
Water
Cement
Generation
Process Feedstocks
All Manufacturing
Steel
Fertilizer (Ammonia)
Methanol
Chemicals
Petroleum Products
Petrochemicals
» Over $95B in new announced “energy intensive” industrial plant expansions will come on-line over the next five years
» Shale development impact on the railcar industry is long-term, wide-ranging, and positive with only one exception
9. 9
Hydraulic Fracturing Materials
Inputs and Logistics – Per Well
Materials
Chemicals
Clean Water/
Cement
Proppants
OCTG (Pipe)
Source to
Transloading
2
Local source
40
5
Transloading to
Wellhead Site
8
~1,000
160
20
47 Total
Railcars
~1,200 Total
Truckloads
Oil/Gas/NGLs
Truck, Rail,
Pipeline
Waste Water
~500 Total
Truckloads
12. 12
» Wisconsin sand mining industry
§ 72 operational frac sand mines
§ 20 in development, 13 permitted, and 17
proposed
§ New applications are still coming in for new
mines
» Minnesota silica sand mining
§ 17 active frac sand mining facilities
§ Over 20 facilities in the planning stages
» Large barriers to entry
§ 1 - 3 years to find, permit, and start
§ Transportation key to success
» Industry consolidation continues
§ Focus on integrated supply chain
(US Silica)
Sand Mining
Frac Sand Industry Across
Wisconsin, May 1, 2013
Source: WisconsinWatch.org
Source: MPR News
Minnesota Frac Sand Mining, May 1,
2013
12
Source: WisconsinWatch.org, MPR News, May 2013
13. 13
Processed Sand Total Delivered Cost
Source: PLG analysis
» Benchmark cost with well-executed
performance
§ Example unit train movement from
Wisconsin to Texas with total delivered cost
of approx. $180/ton
§ Logistics drives ~60% of total delivered
sand cost
» Potential for significant cost
add-ons caused by strategic
and tactical issues
§ Sub-optimal logistics network design
or infrastructure
- Manifest service (rail)
- Multi-carrier vs. single line haul (rail)
- Equipment/driver shortages
§ Poor planning and/or execution
- Rail and/or truck demurrage costs
– Performance penalties
§ Uncompetitive sand price
§ Poor sand quality
14. 14
Changes in Sand Logistics
Model and Costs
» Rail rate advantage for volume and unit train vs. manifest
service
§ On a per-ton basis between Wisconsin and Texas, spreads are 17-29%
» Western carriers are driving single line hauls and
encouraging longer trains to Eagle Ford via pricing
differentials
» Canadian and Eastern carriers are aggressively working to
grow their markets by providing very competitive pricing
and securing sand originations
§ CN/Superior Silica Sands – Poskin (Barron), WI
» Major sand providers establishing “in the play”
transloading facilities to provide ready access to product
§ U.S. Silica - East Liverpool, OH
§ U.S. Silica – San Antonio, TX
§ Potential 2nd facility under consideration in San Antonio, TX
» Post-boom market maturation Source: PLG analysis
15. 15
Sand Railcar Market Conditions
» Conditions are normalizing
§ Builder backlog has been resolved
– Wait time is now attributable to other car types in the pipeline
§ Many surplus cars have found homes
§ 2013 total production of sand cars will be closer to the
historical average of 2,000 – 3,000 units
» Lease market settling into familiar patterns
§ Traditional pricing behavior: Newer/286k cars more
expensive than older/263k cars
§ Cars with sub-optimal design (i.e. older grain cars) being
flushed out and replaced where possible
§ Lessors placing modest “spec” orders
§ Credit-worthiness of lessee is still a critical criteria
§ Market is still trying to find its feet
» Looking forward
§ Positive developments in housing/construction should
equate to additional demand for small cube hoppers
§ General optimism that demand from sand shippers may
also strengthen
16. 16
Shale Play Product Flows Outbound
» Natural Gas
§ Majority via pipelines, some trucks
» Natural Gas Liquids (NGLs)
§ Requires processing (fractionation)
§ 3-9 gallons/MCF (thousand cubic feet)
– Ethane ~42-65%
– Propane ~28%
– Normal Butane ~8%
– Iso-Butane ~9%
– Condensate ~13%
» Crude Oil
§ Bakken play as a model
§ Surging Permian and Eagle Ford development
17. 17
Shale Development Natural Gas Impacts
» Industry a “victim of its own success”
§ Fracking results in oversupply; gas prices down
33% since 2010
§ Breakeven gas price at 10% IRR: ~$3.25 mm/btu
§ Rigs leave Marcellus, other gas plays for oil plays
(~700 “non producing” wells in PA)
§ Helped to deflate frac sand boom
» Lower gas prices have resulted in 10-13%
market share capture from coal for
thermal generation
» Low gas prices fueling industrial
renaissance
§ Overall manufacturing (cost of electricity; “re-
shoring”)
§ Specific sectors that use natural gas as a
feedstock
– Methanol (16MM m/t new capacity under consideration)
– Steel
– Fertilizer
17
Source: RBN, PLG analysis
Source: RBN
18. 18
Source: EIA, Deloitte
Natural Gas Displacement of Coal for
Thermal Generation
» Natural gas now supplying approx. 30% of
thermal fuel demand (~13% share capture from
coal)
» Despite recent increases in prices, natural gas
share capture expected to maintain or grow
§ Environmental regulations of coal burning
§ Scheduled coal unit retirements
§ Eastern US transition through 2018: 18GW coal retirements
vs. 26GW of new natural gas plants under development
» Adversely affecting coal industry,
railroad coal loadings
18Source: RBN Energy, June 2013
Fuel Cost Comparison for Electricity Generation
Source: Bentek, PLG analysis
19. 19
Shale Related Rail Traffic Still Small
Relative to Coal Volumes
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
2008
2009
2010
2011
2012
2013
Sand
Crude
Coal
Carloads
Quarterly Data
Sand
Crude
Coal
STCC 14413 (sand), 13111 (petroleum), 11212 (coal) Source: US Rail Desktop
Railcars Handled: Sand, Crude, & Coal
21. 21
Shale Gas Driving Steel
Manufacturing Comeback in US
» Shale gas boom makes direct-reduced iron steel
economical
§ Not new technology, but preferable with lower cost natural gas
§ DRI process uses natural gas in place of coal to produce iron
§ Cost of production 20% lower per ton vs. traditional blast furnace
» U.S. jobs and international investment
§ Steel production in the U.S has shrunk 13% since Jan. 2008
– Compare to 20% growth in steel production internationally
§ At least five new DRI steel plants being considered in the U.S. – now
economical for the first time in 30 years due to low cost of natural gas
§ Both domestic and international firms investing in the technology
» Reciprocal growth
§ Increased demand for U.S. steel creates greater demand for U.S. gas
§ Tubular steel products has 8% yearly growth in demand, driven by
increase in shale oil and gas (Oilprice.com)
§ Joint venture between Nucor Corp. and Encana Corp. commits $3
billion to development of new gas wells to support DRI plants
§ Voestalpine $740MM investment in Texas
§ Potential US Steel-Republic Steel JV to produce DRI
§ DRI-derived steel of higher quality than that created from recycled
scrap, further driving demand
Source: World Steel Association
22. 22
Shale Gas Development Impact
on Fertilizer Market
» Natural gas is a feedstock for ammonia production
§ Represents ~70% of cash costs (CF Industries)
» Lower gas prices directly benefit American farmers
§ Increased demand for corn, soybeans has driven fertilizer costs higher
§ Excess natural gas supply can be utilized to produce greater volumes
of nitrogen-based fertilizer more economically
» Cheap U.S. natural gas means billions in investment for
new domestic fertilizer plants, displacing ~11 MM m/t of
imports
§ Orascom/Iowa Fertilizer Company - Wever, IA
§ CHS - Spiritwood, ND
§ Ohio Valley Resources - Spencer County, IN
§ Yara - Belle Plaine, SK Canada
§ Northern Plains Nitrogen – Grand Forks, ND
§ CF Industries – expansions at Donaldsonville, LA and Port Neal, IA
§ PotashCorp - resumption of ammonia production at Geismar, LA
§ Agrium – KY or MO
§ EuroChem – Iberville Parish / St. John the Baptist Parish, LA
» Rush of new plant announcements sparked oversupply
concerns, cancelations (Yara, Agrium)
23. 23
Looking Ahead: Natural Gas
» Oversupply conditions expected to persist through
2015
» Factors that could revive demand, production, and
prices (>$5/MMbtu)
§ Industrial use expansions come online over next 5 years
§ Continued toughening of EPA regulations of coal
§ Historic import/export reversal of US/Canada natural gas flows
by 2014 (Marcellus gas exports to Canada)
§ Technology advancements for increased use of CNG as a
transportation fuel
24. 24
LNG Export Opportunity
» Political/policy battle between domestic industrial users and
producers
» Sabine Pass, LA and Freeport, TX now permitted for exports
§ 3.4 Bcf/day export capacity to come online by 2015
§ Represents ~5% of projected US dry gas production
» 20 additional terminal applications totaling 29 Bcf/day of
export capacity pending before FERC
Source: Waterborne Energy Inc. Data in $US/MMBtu
Source: Congressional Research Service, EIA
Selected US Natural Gas Import & Export Infrastructure
25. 25
Shale Development NGL Impacts
» Leading NGL and “wet gas” plays are Eagle
Ford, Utica
§ Significant investment and expansion of gathering,
fractionation, and takeaway capacity underway in
the Utica Play
§ Takeaway capacity in Eagle Ford well exceeds
current production (4x)
» Requires fractionation facilities proximal to
production
§ “Y-grade” must be separated into purified products
§ 75% of fractionation capacity in US Gulf Coast
§ Mt. Belvieu, TX major trading & storage hub
§ 500 Mb/d of new fractionation capacity planned for
Utica
§ Utica NGL production growth expected to exceed
600% between 2013-2015
» Similar to dry gas, strong production due to
fracking has resulted in oversupply and
depressed prices
§ Chemical industry benefits
26. 26
Source: American Chemistry Council, May 2013
Shale Development Impact:
Chemical Industry
» Abundant ethane supplies have sparked chemical industry renaissance
§ 100% of captured ethane is “cracked” to make ethylene, the most basic building block in the chemicals supply chain
§ Planned expansions will increase US ethylene capacity 33% (11 MMmt) by 2017
§ USA is now the low-cost producer of ethylene-based chemicals due to abundant supplies of ethane from shale plays (up
to 60% raw materials cost advantage)
Source: EIA
§ Domestic end-use
of materials, i.e.
plastics, will
expand
significantly
§ Up to 40% of new
petrochemical
output will be for
export
§ New demand for
plastic resin
hoppers, specialty
and pressure tank
cars
27. 27
Natural Gas & Petrochemical
Downstream Products
Feedstock/
Intermediary
Finished
Products
Natural Gas,
OIl
Ethane,
Naphtha, etc.
Ethylene
Miscellaneous
Vinyl Acetate
Linear
Alcohols
Ethyl
Benzene
Ethylene
Oxide
Ethylene
Dichloride
High Density
Polyethylene
Low-Density
Polyethylene
Adhesives, coatings, textile/
paper. finishing, flooring
Detergents
Styrene
Ethylene
Glycol
Vinyl Chloride
House wares, crates,
drums, food containers,
bottles.
Food packaging, film,
trash bags, diapers, toys
PVC
Antifreeze
Fibers
PET
Miscellaneous
Polystyrene
SAN
SBR
Latex
Miscellaneous
Medical gloves,
carpeting,
coatings
Tire, hose
Instrument lenses,
house wares
Insulation, cups
Siding, windows,
frames, pipe, medical
tubing
Pantyhose,
carpets, clothing
Bottles, film
28. 28
Looking Ahead: NGLs
Source:
Canadian
Energy
Research
Ins&tute
Source:
Sunoco
Logis&cs
» US NGL production forecast to increase by
1.6MM b/d from 2012-2018
» The (somewhat) hidden Condensate story
§ Used as diluent for heavy Canadian tar sands oil –
critical for transportation as “Dilbit”
§ Significant investment in infrastructure being made to
deliver Eagle Ford, Utica condensate to Western
Canada
§ Primary delivery via pipeline, but major rail volumes ex.
Utica are required to get to Midwest pipeline injection
points
§ Canadian diluent import demand expected to grow from
200 Mb/d to 500 Mb/d by 2018
» Expect export market for NGLs to expand
§ Pipeline reversals undertaken to meet demand,
particularly ex. Utica to Sarnia, ON petrochemical
complex and export storage and dock facilities in
Philadelphia
§ US projected to export over 1MM bb/d of NGLs by 2018
Source: RBN, PLG analysis
29. 29
Shale Development Crude Oil Impacts
» Dramatic increases in US production due to hydraulic fracturing and horizontal
drilling
§ 7.35 MM bbl./day
§ Projected to grow by ~30% over next four years
§ Strong play in Bakken; surging Permian and Eagle Ford development
§ “Tight” oil sources driving overall North American growth
§ Production forecasts frequently revised upward
Source: Morgan Stanley, February 2013
30. 30
Driving Toward “Oil Independence?”
» Decreasing dependency on foreign crude
§ Combination of US shale plus Canadian oil sands
estimated to reduce imports to <15% by 2020
» Supply isn’t enough – “independence” also
relies on lower domestic fuels consumption
§ CAFE standards the primary driver
31. 31
Displacement of Waterborne Crudes
by Mid-Continent Sources
» Reducing imports means reducing waterborne crudes
§ West African imports already down ~70% from 2010 levels
» Mid-continent sources displacing imports at coasts, making rail
critical to the total crude market
§ Bakken as case study for large crude by rail operations
Source: BENTEK Energy
32. 32
Some Basic Facts About Crude Oil:
Grades and Qualities
» Not all crudes are created equal
– light/sweet vs. heavy/sour
§ Heavy/sour crudes include Western
Canada, Venezuela, Mexico, Alaska
North Slope (ANS), Middle East (light/
sour)
§ Heavy/sour has higher sulfur content,
yield for asphalt, diesel
» Refineries are generally
configured to run certain types of
crude
§ Significant investments made ($48B
since 2005) at select refineries to
install coker units that will allow
processing of heavy/sour
§ Major heavy/sour refining clusters:
Texas Gulf Coast, Chicago, southern
Illinois, California
Source: RBN Energy
33. 33
Some Basic Facts About Crude Oil:
Major Production and Refining Areas
» The special case of the Canada Oil Sands
§ Heavy/sour crude has a natural home in Midwest and US Gulf
Coast (~2.8 MM bpd demand at USGC)
§ Pipeline capacity to US Midwest refining centers is at capacity
§ Pipeline developments to coasts, US markets still 2+ years
away
§ Railbit/dilbit via rail requires coiled, lined/insulated cars
» Brent, WTI, and US shale play crudes (Bakken,
Permian, Niobrara, Eagle Ford) are light/sweet
§ US is close to saturation point on light/sweet crude at mid-
continent and USGC refining areas Source: CAPP, June 2013
Source: Turner Mason, RBN Energy
US Crude Oil Production Growth
by Grade
Source: RBN Energy
34. 34
Crude Market Overview
Bakken
Oil
Sands
Permian
Eagle Ford
Hardisty, AB
Clearbrook, MN
Cushing, OK
St. James, LA
East Coast
Refiners
Pacific Northwest
Refiners
California
Refiners
TX Gulf Coast
Refiners
LA Gulf Coast
Refiners
PADD I
Demand
PADD III
Demand
7,650
kbpd
PADD V
Demand
2,400
kbpd
1,050
kbpd
Light/Sweet
Heavy/Sour
Light/Sweet
Heavy/Sour
Light/Sweet
Heavy/Sour
Brent
Mexican Maya
Venezuela Crude
West African
ANS
Source: EIA, Google, PLG Consulting
35. 35
Bakken Oil Production and
Logistics - History
» 2010-2011 discount of ~$8-12/bbl for Bakken
crude vs. peer WTI
§ Undervalued due to logistics constraints “stranding” the oil
» Early objective of crude-by-rail was to bridge gap
until pipelines built, but has now become the
primary transport mode for Bakken crude
§ ~70% rail market share
§ Pipelines operating below capacity; some project cancelations
» Significant development of crude by rail loading
terminals in 2011-2012
§ Takeaway capacity now exceeds production
§ Bakken vs. WTI differential near even (within ~$3)
§ Rail captures majority market share
Source: North Dakota Pipeline Authority, PLG Analysis
Source: EIA, North Dakota Pipeline Authority, PLG
~810,000 BPD May 2013
First outbound unit
train shipment
December, 2009
36. 36
Crude Oil by Rail – North
Dakota Terminals
North Dakota Crude Oil Rail Loading Capacity (Barrels Per Day)
Rail Terminals 2013 2014* 2015* Rail Carrier
EOG Rail, Stanley, ND (Up to 90,000 BOPD) 65,000 65,000 65,000 BNSF
Inergy COLT Hub, Epping, ND (Q2 2012) 120,000 120,000 120,000 BNSF
Hess Rail, Tioga, ND (Up to 120,000 BOPD) 60,000 60,000 60,000 BNSF
Bakken Oil Express, Dickinson, ND 100,000 100,000 100,000 BNSF
Savage Services, Trenton, ND (Q2 2012 Unit Trains) 90,000 90,000 90,000 BNSF
Enbridge, Berthold, ND (Q4 2012) 80,000 80,000 80,000 BNSF
Great Northern Midstream, Fryburg, ND (Q1 2013) 60,000 60,000 60,000 BNSF
Musket, Dore, ND (Q2 2012) 60,000 60,000 60,000 BNSF
Plains, Ross, ND 65,000 65,000 65,000 BNSF
Global/Basin Transload, Zap, ND (Estimate Not Confirmed) 40,000 40,000 40,000 BNSF
BNSF Total Capacity 740,000 740,000 740,000
Plains - Van Hook, New Town, ND 65,000 65,000 65,000 CP
Dakota Plains, New Town, ND 30,000 80,000 80,000 CP
Global Partners, Stampede, ND 60,000 60,000 60,000 CP
CP Total 155,000 205,000 205,000
Various Sites in Minot, Dore, Donnybrook, and Gascoyne 30,000 30,000 30,000
Total Crude Oil Rail Loading Capacity 925,000 975,000 975,000
*Project still in the review or proposed phase Year End System Capacity
Source: North Dakota Pipeline Authority (June 2013), PLG Analysis
38. 38
Bakken Area
Outbound Pipelines
38
North Dakota Crude Oil Pipeline Capacity (Barrels Per Day)
Pipelines 2013 2014* 2015*
Butte Pipeline 160,000 160,000 160,000
Butte Loop* (Late 2014) - 110,000 110,000
Enbridge Mainline North Dakota 210,000 210,000 210,000
Enbridge Bakken Expansion Program (Q1-11/Q1-13) 145,000 145,000 145,000
Plains Bakken North (Q2 2013, Up to 75,000 BOPD) 50,000 50,000 50,000
High Prairie Pipeline* - 150,000 150,000
Enbridge Sandpiper* (Q1 2016) - - -
TransCanada Keystone XL* (2015) - - 100,000
TransCanada Bakken Marketlink * (4Q 2015) - - 100,000
Hiland Partners Double H Pipeline (Q3 2014, Up to 100,000 BOPD) 50,000 50,000
Pipeline Total 565,000 875,000 1,075,000
*Project Still in the Review or Proposed Phase Year End System Capacity
Source: North Dakota Pipeline Authority (June 2013)
39. 39
Bakken Production vs. Total Takeaway
Capacity: 2013–2015 Projection
Year ND Production
Forecast (Bpd)
Pipeline
Capacity
Rail Terminal
Capacity
Rail Carrier
Capacity
ND Refinery
Consumption
Total
Outbound &
Refinery
Capacity
Excess Logistics
Capacity
2013 850,000 565,000 925,000 1,300,000 68,000 1,558,000 708,000
2014 980,000 875,000 975,000 1,300,000 68,000 1,918,000 938,000
2015 1,150,000 1,075,000 975,000 1,350,000 108,000 2,158,000 1,008,000
Source: North Dakota Pipeline Authority, PLG AnalysisBpd
=
Barrels
per
Day
40. 40
Crude Oil by Rail vs. Pipeline
$6.50
$12.00
$10.50
$15.00
$-
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
$14.00
$16.00
Pipeline to
Cushing
Rail to
Cushing
Pipeline to Pt
Arthur
Rail to Pt
Arthur
DollarsPerBarrel
Source: PLG analysis
» Rail cost: 50-100% more expensive
than pipeline transport
» Near-term offsetting rail advantages:
§ Site permitting, construction much faster
§ Lower capital cost
§ Scalable
§ Shorter contracts (2-3 year commitments vs. 10
years for pipeline)
§ Faster transit times
§ Access to coastal areas not connected via
pipeline
§ Origin/destination flexibility
§ Primary advantage: Tool of arbitrage for trading
desks
» Rail pricing drivers
§ Advantaged rate structures for first-movers,
volume, and unit train operators
§ “Floor” has been set for crude by rail pricing
§ Crude price differentials more important than cost
vs. pipeline
Cost Comparison: Bakken to Cushing and USGC
41. 41
All Crude Handled by Railroad
Volume Growth
STCC 13111 Source: US Rail Desktop
42. 42
Source: CAPP Report, 2013
Crude Oil Pipelines:
Existing and Planned
» Current pipelines ex.
Bakken operating below
capacity
§ However, volumes have
increased over past 60 days
» Pipeline industry has
been challenged by new
dynamic NA oil market
§ Fixed routes, long lead times
§ 10 year commitments required
for new build pipeline projects
§ Lack of subscription interest in
KM Freedom project (Permian-
California)
» Several natural gas
pipeline conversions
planned
§ Trunkline (ETP) – Patoka, IL-
St. James, LA
§ Energy East (TransCanada) –
Hardisty, AB-St. Johns, NS
43. 4343
Crude Tank Car
Market Conditions
» Potential bottleneck: Railcars
§ Current order backlog runs to early 2015 (~48,000 cars)
§ Major purchases by oil majors and midstream companies
§ Extremely tight market with very high lease rates
§ Current crude by rail fleet ~30,000 railcars, or 1-1.5 MM bbl./day
equivalent
§ Short term demand is highly dependent on WTI – Brent spread
» Railcar type is important
§ General service 31k gallon capacity cars can hold more crude
than heavier coiled cars
§ Coiled cars can transport heavier crudes that need heat to
offload
– Some shippers prefer the general purpose (GP) rail cars because
the larger capacity can be significant on their transportation cost for
hauling lighter crudes
– Some lessors prefer to have more coiled cars that have more uses
than general service cars built to hedge themselves on an
oversupply of general service tank cars if/when the crude by rail
market declines
» Key question: If/is/when will the crude tank car
industry become overbuilt?
44. 44
0
500
1,000
1,500
2,000
2,500
3,000
Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15
Thousandbbl/day
Best-Case Crude by Rail Potential vs. Crude
Railcar Capacity
Other Production Sources Williston (Bakken)
Oil Sands Crude Railcar Capacity
Forecast of Crude Railcar
Supply and Demand
» Production increases vs. railcar
capacity increases
§ March crude fleet was ~30k cars and
backlog was ~48.2k Backlog runs
through mid 2015
§ If pipelines and local refining can
consume production increases in
Permian and Eagle Ford, crude by rail
will be primarily Bakken and
Canadian Oil Sands productions
» Under best-case scenario for rail
market share capture, data
suggests existing & planned
tank car fleet exceeds demand
Sources: CAPP, AAR, NDPA, GATX, and PLG analysis
Railcar backlog is through mid 2015;
retirement of old railcars will reduce
capacity if no additional railcars built
Q1 2013 originated rail carloads of crude
petroleum were 97,135, which equates to
755,000 barrels per day (assume 700/bbl.
average capacity)
Assumptions:
• 80% of projected Williston Basin production
• 80% utilization of Oil Sands announced 300 kbpd of rail terminals through 2014, and 80% utilization of an additional 300 kbpd for 2015
• 30,000 crude railcars in March and build rate of 21,500 railcars/year through 2015 with attrition rate of 7,800 railcars/year
• 700 bbl. average railcar capacity and average 17 day turn
• Other production sources at constant 165 kbpd
45. 45
45
Shale Development and Crude By
Rail: Current Market Dynamics
» Recent History:
§ Original (2009-2010) objective of crude by rail to “bridge the gap” until pipelines built
§ By 2012, crude by rail viewed as a core mode of transportation and means of arbitrage
– Differentials made rail attractive: Bakken and WTI trading at ~$10-$15/bbl. less than Brent; Alberta Bitumen trading at ~$30/bbl. less
than Brent
– Market response: E&P, midstream players willing to rapidly deploy significant capital to enable access and capitalize on spreads
– Multi-modal logistics hubs in shale plays and at destination markets (i.e. Cushing, OK, St. James, LA, Pt. Arthur, TX, Albany,
NY, Bakersfield, CA)
– Lease and purchase of railcar fleets
– Pipeline expansions, reversals, new construction
– Refineries installing unit train receiving capability - particularly coastal refineries previously captive to waterborne imports (i.e.
Philadelphia, PA, St. John, NB, Anacortes, WA, Ferndale, WA)
» Today:
§ Spreads have narrowed, limiting arbitrage opportunities and slowing crude by rail growth
§ Price differentials driving trading and logistics patterns
45
Key Drivers
Supply Sources
Oil Prices
Destination
Markets
Capital
46. 46
Oil
Sands
Hardisty, AB
Heavy/Sour Crude Logistics and Price
Differentials – July 2013
$89
Heavy/Sour at TX GC
Mexican Maya (ship): $98
WCS (pipe): $107
WCS (rail): $113
Spread Dec. 2012 July 2013 Change
Mexican Maya - WCS $33.55/bbl $8.90/bbl -$24.65/bbl
Crude Prices from July 2013
Sources: EIA, CME Group, Platts, Google,
PLG analysis 46
TX Gulf Coast
Refiners
Pacific Northwest
Refiners
California
Refiners
PADD III
Demand
7,650
kbpd
PADD V
Demand
2,400
kbpd Light/Sweet
Heavy/Sour
Light/Sweet
Heavy/SourMexican Maya
Marine
Rail
Pipeline
Clearbrook, MN
Chicago, IL
47. 47
Light/Sweet Crude Logistics and Price
Differentials – July 2013
Bakken
Permian
Eagle Ford
East Coast
Refiners
Pacific Northwest
Refiners
California
Refiners
TX Gulf Coast
Refiners
LA Gulf Coast
Refiners
$6
Light/Sweet at TX GC
Bakken (pipe): $107
Brent (ship): $108
WTI (pipe): $111
Light/Sweet at PNW
Bakken (rail): $109
Brent (ship): $108
Light/Sweet at EC
Bakken (rail): $111
Brent (ship): $108
Light/Sweet at LA GC
Bakken (rail): $111
LLS (local): $110
Spread Dec. 2012 July 2013 Change
Brent - WTI $21.83/bbl $2.82/bbl -$19.01/bbl
LLS - WTI $20.00/bbl $4.90/bbl -$15.10/bbl
WTI - Bakken
(Clearbrook)
$3.00/bbl $2.54/bbl -$0.46/bbl
Brent
ANS
Brent
47
Crude Prices from July 2013
Sources: EIA, Bloomberg, Platts, Baytex
Energy, Google, CME Group, PLG analysis
PADD I
Demand
PADD III
Demand
7,650
kbpd
PADD V
Demand
2,400
kbpd
1,050
kbpd
Light/Sweet
Heavy/Sour
Light/Sweet
Heavy/Sour
Light/Sweet
Heavy/Sour
Marine
Rail
Pipeline
Chicago, IL
Clearbrook, MN
Cushing, OK
St. James, LA
$96
(wellhead)
WTI:$105
48. 48
48
Looking Ahead:
North American Crude Oil Logistics
» The gusher of new US light/sweet shale oil production made possible
by fracking has upended the traditional oil logistics and trading
patterns
§ Result: “Wrong place/wrong oil” supply displacements, i.e. Cushing overflow
§ Rapid investment in new logistics infrastructure, routes, modes, and terminals
– Bakken now sufficiently developed; next immediate areas for significant investment are Utica, Oil Sands,
Permian, coastal areas and intermediate routes and facilities that support bitumen transport in particular
» A “new normal” in crude oil flows will emerge in conjunction with
continued North American oil production over the next five years
§ Continued shifts of mid-continent light/sweet to coastal destinations
§ New modes and infrastructure to get Canadian bitumen to USGC, with or without Keystone
XL
§ Permian, Eagle Ford to meet USGC light/sweet demand; Bakken flows primarily east-west
§ Significant oversupply of light/sweet and super-light grades
» Expect eventual government approval of light/sweet crude oil and
condensate exports on a limited basis, similar to LNG
» Primary threats to crude by rail business
1. Narrow WTI-Brent spread
2. Glut of Permian and Eagle Ford light sweet oil displacing rail volumes to USGC to Gulf
Coast (but somewhat offset by new rail deliveries from Oil Sands)
3. Continued pipeline development
4. Water-borne Eagle Ford crude deliveries to USEC
49. 49
Looking Ahead: Crude Oil Anticipated
Production Growth and Product Flows
Source: BENTEK Energy, CAPP, Railroad Commission of Texas, ND Pipeline Association, Google, PLG Consulting
= Current 2013
= Future 2017
Anticipated Production
Growth
Permian1,680
1,200
+40%
1,600
800 Eagle Ford
+100%
Bakken +56%871
1,363
Marine
East Coast
Refiners
Oil
Sands
2,590
1,985
+30%
Hardisty, AB
Cushing, OK
LA Gulf Coast
Refiners
Light/Sweet
St. James, LA
Rail
Pipeline
Pacific Northwest
Refiners
California
Refiners
TX Gulf Coast
Refiners
Heavy/Sour
Clearbrook, MN
Chicago, IL
50. 50
Thank You!
For follow up questions and information, please contact PLG:
+1-312-957-7757 / info@prologisticsgroup.com
Taylor Robinson, President
Graham Brisben, CEO
Jean Arndt, Vice President
Jeff Dowdell, Senior Consultant
Gordon Heisler, Senior Consultant
Jeff Rasmussen, Senior Consultant
Jay Olberding, Analyst
This presentation is available at:
WWW.PLGCONSULTING.COM
Professional Logistics Group