Posted on: 08. 17. 21
Whenever news about reduced demand in oil strikes, the average consumer doesn’t really bat an eye. The truth is, though, when oil demand falls like it has throughout the pandemic, the oil needs to be stored somewhere, and unfortunately, space is limited.
So, while we experience an unfortunate lull in actual oil purchasing, let’s take a closer look at crude oil storage and some of the unknown facts about this integral piece of the O&G process.
Why is Oil Storage Important?
Essentially, oil storage helps us take control of our industry’s gains when the price isn’t on our side. For example, in a time like now, when oil prices are surprisingly low, companies will tend to store more oil away for when prices and demand for oil begin to increase.
Without oil storage, sites that condition their oil don’t have a place to put it and their hard work literally gets wasted down a pipeline. Currently, during the pandemic, oil storage is quickly filling up, and many companies are struggling to find and hold space to store their excess crude oil.
What Happens When Oil Storage Runs Out?
In the instance that worldwide oil storage runs out, this doesn’t prove a good situation for our industry. In fact, according to an article from oilprice.com, we are on the brink of this type of disaster happening.
According to the article, “Already, ports and refiners are turning away oil tankers. This will put even more downward pressure on prices and pose an existential threat to many companies.”
In short. Oil storage is essential and helps drive the success of our industry’s economy. Without it, many hard-working O&G employees would quickly be out of a job.
How Do You Store Crude Oil in the Long-Term?
While companies like Pro-Gas provide NGL storage for pre-treated oil and gas, crude oil storage requires the big guns for long-term efforts.
Some of the most common ways that companies store their crude oil include:
- Underground salt caverns in the Gulf Coast of the United States
- Depleted reservoirs
- Above-ground tanks
- Pipelines
What is the United State’s Storage Capacity?
According to the Energy Information Administration, the current storage capacity in the United States is 653.4 million barrels of crude oil. Early on in the pandemic, there were fears that we could hit our capacity limit. While vaccine productions eventually subsided these worries, as new variants begin to emerge and demand once again plummets, many O&G suppliers are holding out hope for a turn for the best.
Trust Pro-Gas to Answer Your Essential O&G Questions and More
Whether you are a facility owner or a consumer that’s curious about our industry, Pro-Gas, LLC is always available to answer your burning questions about crude oil and natural gas.
We are one of the nation’s top providers of O&G production and cooling equipment and are ready to go beyond questions and into action for your drill site or facility.
Contact us today to learn more about our current product availability.
