Inside the World’s Biggest Tank Farm – Cushing, Oklahoma, USA.

Cushing_OklaToday Tank World News journeys to Cushing, Oklahoma, a small town of no more than 8000 people nicknamed the “Pipeline Crossroads of the World” which hosts the world’s largest tank farm. An oil town since 1912 when the first wildcatters struck oil, it quickly developed major infrastructure and once its own stocks dwindled it shifted to storage aided by a large number of pipes already in place and its central position in the heart of America. Recent figures from Bloomberg Business Week state the total crude stocks (including stock in farms and pipeline fill) to be in excess of 80 million barrels, with a working volume of 65 millions barrels and an increase of 14 million barrels from September 2011.

Cushing Oklahoma, is the home of 13 oil storage companies including Enbridge, Magellan, Enterprise and more. Currently, there are 13 pipelines bringing crude oil into Cushing with an estimated total capacity of 1.7 million bpd. Whilst going the other way, out of Cushing there are 12 pipelines running in all directions with a capacity of 1.5 million bpd.

But Oil isn’t just stored in Cushing, it’s also a key site for blending the various types of crude that arrive every day. Whilst it’s got a direct link with Wall Street too, each working day over 900,000 oil futures and options contracts (known as West Texas Intermediate (WTI) by the industry) are traded on the New York Mercantile Exchange and it’s the oil in Cushing that is actually being bought and sold.

This giant site also plays a major role in US politics, in March 2012 President Obama visited the town to make a speech encouraging the people of Cushing to support the Keystone Pipeline from Canada to the Gulf Coast via Cushing; Over the last three years, I’ve directed my administration to open up millions of acres for gas and oil exploration across 23 different states. We’re opening up more than 75 percent of our potential oil resources offshore. We’ve quadrupled the number of operating rigs to a record high. We’ve added enough new oil and gas pipeline to encircle the Earth and then some. So we are drilling all over the place — right now. That’s not the challenge. That’s not the problem. In fact, the problem in a place like Cushing is that we’re actually producing so much oil and gas in places like North Dakota and Colorado that we don’t have enough pipeline capacity to transport all of it to where it needs to go — both to refineries, and then, eventually, all across the country and around the world. There’s a bottleneck right here because we can’t get enough of the oil to our refineries fast enough. And if we could, then we would be able to increase our oil supplies at a time when they’re needed as much as possible.”

President Obama’s speech reflects the changing nature of North American Oil storage. Mike Moeller, Director & General Manager at Canadian-based energy company Enbridge who have 93 tanks at the Cushing facility speaking to C-Span; “The business has changed with the rise of oil production – we’ve seen a dynamic shift in crude oil market. Seaway pipes used to bring off shore crude from tankers in to Cushing to be distributed. Now with the Shale play, and the Oil sands of Canada we now receive domestic oil that goes on a reverse seaway pipe to the Gulf coast.” This is the reversed 400,000 bpd Seaway line,the only major line runs south to the Gulf Coast.

There are challenges ahead for Cushing, as we recently reported, railroads are now moving more crude than they have since the 1930s.  However, pipelines are still the cheapest option available for moving crude and with a nationwide reorientation around domestic supplies, Cushing is likely to remain for the foreseeable future at the heart of the North American oil market.

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For a free report on storage trends in the storage industry featuring contributions from DELTA, GPS Chemoil, Saudi Aramco, AQABA Development Corporation, Solvochem, Endress & Hauser, Port of Salalah, Stolthaven Terminals, and many more click here.

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