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Informa Economics


A Special Industry Study
November 2014

Third Edition (Previous Editions in 2011 and 2013)

"Opportunities in Tank Barges Related to Crude Oil Production and Movement"

Over the last 20 years, the new technology of hydraulic fracturing and horizontal drilling has emerged, tapping natural gas and crude oil that was previously inaccessible. This has enabled US crude oil production to increase from 3.8 million barrels per day just six years ago to now topping 9.0 million barrels—a 137 percent increase—and production is seen rising further still, creating opportunities.  The increased energy production is altering the entire liquid transportation market. As transportation routes expand and adjust to meet the need, new challenges arise—such as the recent, dramatic increase in crude petroleum barge loadings. All indications point to the increases in crude oil production from natural gas and oil site extraction, continuing in areas tributary to the river system.  In this Third Edition study, Informa summarizes the current supply, demand and rate outlook for the liquid barge market with conclusions on key market drivers to monitor. With this information, participants can develop a strategy with respect to investment in and use of liquid tank barges.

 

Introduction

Over the last 20 years, new technology has emerged tapping natural gas and crude oil that was previously inaccessible because it was trapped in shale that has low permeability or is “tight.” The primary new technologies include hydraulic fracturing and horizontal drilling. The use of such technologies was expensive to employ and uneconomical until the price of crude oil turned higher. At the end of 2001, crude oil was priced under $20 per barrel, and then ran up to more than $140 per barrel in 2008. The price has fallen and ranged from $75 to $110 per barrel, which could be the new midpoint price as shown in Figure 1.

Meanwhile, from the peak of the market in September 2008 until November 2014, U.S. crude oil production has increased from 3.8 million barrels per day to 9.0 million (or an increase of 137%), and is expected to increase further still, which is now creating transportation opportunities. These higher price levels also have triggered an expansion in shale extraction production as shown in Figure 2.


 

The increased energy production is altering the entire liquid transportation market. As the transportation routes expand and adjust to meet the need, new challenges arise. For example, barge locking information queried through the Army Corps Lock Performance data indicated a dramatic increase in crude petroleum barge loadings. All indications point to the increases in crude oil production from the natural gas and oil site extraction continuing in areas tributary to the river system, and an important question continues to be asked “what adjustments remain by the inland barge industry in the short and long term to handle this increased volume?”

 

Study Table of Contents

The entire prospectus and enrollment in pdf form


To obtain additional information or to enroll, please contact:

 

Mr. Thomas P. Scott
Chief Executive Officer

Informa Economics
775 Ridge Lake Blvd., Suite 400
Memphis, TN 38120
Phone: 901.766.4586
Fax: 901.766.8158

Email: tom.scott@informaecon.com

Ken Eriksen
Senior Vice President

Informa Economics
775 Ridge Lake Blvd, Suite 400
Memphis, TN 38120
Phone: 901.766.4463
Fax: 901.766.8158

Email:  ken.eriksen@informaecon.com





 


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