API: Big investments needed in U.S. energy infrastructure

Energy infrastructure that can keep pace with growing oil and gas production trends is an essential U.S. need, an American Petroleum Institute director said.

Robin Rorick, the director of midstream and industry operations at the trade group, testified before the House Subcommittee on Railroads, Pipelines and Hazardous Materials. The pace at which oil and gas production is accelerating, he said, has implications beyond U.S. borders and it's the transit capacity, from pipelines to railcars, that facilitate forward momentum.

"Ensuring we have a robust energy infrastructure system that keeps pace with growing production and demand is essential to helping provide American families and businesses with reliable access to affordable energy," his testimony read.

The midstream component of the energy sector relates to transit issues. A recent report from IHS Markit found that infrastructure challenges in the Permian shale basin, the most lucrative oil reservoir in the Lower 48, means there's a big gap between production levels and takeaway capacity.

Output from the Permian shale oil basin in the southern United States will account for 60 percent of world total production growth by 2023, analysis finds. The United States is now an oil exporter, though infrastructure necessary to move the oil to the market can't keep up with production trends.

In its report, IHS found it was the lack of infrastructure, not the lack of spending on exploration and production, that presented a growth challenge for U.S. shale.

Elsewhere, the Office of State Planning and Budgeting in Colorado said oil production there was holding at near-record highs, supported by relatively higher crude oil prices. Pipeline limitations near the main U.S. oil storage hub in Cushing, Okla., however, are expected to constrain further growth of Coloradan oil production in the near term, its report read.

Last week, the Port of Corpus Christi secured nearly $23 million from the U.S. Army Corps of Engineers to help deepen and widen the waterway. Most of the U.S. port infrastructure can't handle the largest types of oil tankers, dubbed Very Large Crude Carriers, which are the most economic for crude oil transportation. Without improvements, ports could be the next bottleneck for the United States.

Rorick told House leaders that as much as $1.3 trillion in investments in U.S. energy infrastructure may be necessary through 2035.

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