In the past three years, U.S. oil production has surged thanks to shale formations such as North Dakota’s Bakken and Texas’ Eagle Ford.
For refineries with access to these formations, this is very good news. As production has swelled, so have exports, which are now up 60% since 2010. And profits are following suit.
Amazingly, the surge has occurred in spite of the fact that no refinery with a capacity greater than 50,000 barrels per day (bpd) has been built since 1976 (thanks to environmental regulations).
However, production is quickly reaching a ceiling. If more refining capacity were available, the sky would be the limit for industry profits – and companies are taking note.