Development of new transit networks will aid domestic producers


Deploying advanced oil production equipment and improving domestic transportation networks will help fuel American success for years to come.

Advances in drilling technology and methods have unlocked vast fuel reserves that were previously inaccessible, but the growing amounts of oil and gas that are being produced through hydraulic fracturing and other contemporary techniques still need to be securely shipped in order to be turned into useable energy.

The development of new networks for moving resources from production areas to refineries and, ultimately, markets, is one of the keys to continuing America's ongoing energy renaissance. In support of this goal, energy producer Phillips 66 recently announced that it has signed several agreements with companies in other parts of the industry, including rail and pipeline operators.

In a press release describing the deals, Greg Garland, chairman and CEO of Phillips 66, explained that partnering with third-party transportation providers would allow the company to make more effective use of its refining and marketing capabilities by increasing its access to cost-advantaged North American crude oil.

Under the terms of agreements reached with Enbridge Energy, Targa Resources and Magellan Midstream Partners, Phillips 66 refineries located throughout the country will enjoy ongoing access to crude from oilfields in the United States and Canada.

Enbridge will provide rail loading services in North Dakota, which will facilitate the flow of as much as 40,000 barrels of oil per day from the Bakken shale to Phillips 66 refiners on both the East and West Coasts. The company may also divert some supplies to its Gulf Coast facilities.

Concurrently, Targa will aid in the transport of U.S. and Canadian crude from a rail terminal in Tacoma, Washington to a Phillips nearby Ferndale refinery. And, Magellan will use its pipeline network to transfer crude from Mississippi's Lime play to Phillips 66's refinery in Ponca City, Oklahoma. These two projects will ultimately transport a combined total of approximately 70,000 barrels per day.

Glenn Simpson, general manager of Phillips 66's Crude and International Supply division, whose group played a major role in making the transportation agreements a reality, said that increasing access to advantaged crudes would continue to be "a top priority for the Phillips 66 team for the foreseeable future."

In addition to developing new transportation systems to carry fuel from oilfields to refineries, the continued success of efforts to increase domestic energy output will depend on ongoing innovation in oil production equipment.

Installing hydraulic jet pumps can be particularly useful in helping companies achieve maximum output from their oil and gas wells. Unlike many other artificial lift solutions, jet pumps can be used to maintain production from wells that have problems with their casing.