Energy companies will spend close to $1 trillion on oil and gas infrastructure and storage over the next decade, to support more than 900,000 US jobs as the US becomes the global leader in oil production capacity growth, according to a new report from the American Petroleum Institute (API).
The report, conducted by IHG Global, estimates that between $85 billion and $90 billion of direct capital will be invested this year alone to build new pipelines, storage and processing facilities, and rail cars and marine vessels needed to transport oil and natural gas across the country.
High levels of investment will continue through 2025 and hold steady thereafter, thanks to the surge in domestic oil and gas production as horizontal drilling technology allows companies to tap new reservoirs across the country, according to the API, a trade group that represents the energy industry.
Over the past five years, the US has become the global leader in oil production capacity growth and is now the largest natural gas producer, thanks to unconventional technologies such as horizontal drilling and hydraulic fracturing, or fracking, the report noted.
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“Companies now need more and newer pipelines, storage areas, rail cars and barges in order to transport crude oil and gas as well as refined products. The majority of investments nationwide will go toward building new pipelines to transport refined products, crude oil, natural gas and natural gas liquids, such as ethane and propane,” the report said.
IHS predicts the majority of investments nationwide will go toward building new pipelines to transport refined products, crude oil, natural gas and natural gas liquids, such as ethane and propane.
It also predicts that the oil and gas processing and storage segment will draw significant investment.
Southern states are expected to benefit most from the infrastructure spending boom, with investments totaling $41.5 billion annually from 2014 to 2025 and more than 500,000 direct and indirect jobs, the report claims.
By. Charles Kennedy of Oilprice.com