Things are tough all over for the industrial supply chain. Sharp increases in petrochemical, crude oil and natural gas production are quickly transforming Louisiana into a net-export state, and there’s simply not enough infrastructure to support such a seismic shift in market dynamics.
Since mid-2017, rail congestion, shipping container shortages, trucker shortages and pipeline deficiencies have become serious issues for many owners. Tyler Gray, president and general counsel of Louisiana Mid-Continent Oil and Gas Association in Baton Rouge, predicts the strain on the state’s infrastructure will only intensify as the fervor grows over shale plays, LNG facilities and polyethylene. That will impact everything from pipelines, to roads, to bridges, to ship channels.
“There is more oil in the Permian and Delaware basins than in Saudi Arabia, and all that is coming to the Gulf Coast,” Gray says. “In order to get it to the refineries, pipelines are going to be an important part of that scenario.”
Louisiana is indeed in uncharted territory, as it has been primarily a receiver, not a giver, for decades when it came to shipping. While some owners are creatively sidestepping their current supply chain issues, the root cause of the problem can’t be ignored.
Read the full story in the latest edition of 10/12 Industry Report.