For nearly half a century, things were going great for West Coast refineries.
To the north, nearly two million barrels per day were flowing out of oil wells on Alaska’s North Slope; and turning southward, upwards of a million barrels of oil were being pumped in California on a daily basis.
Yes, life was good back then — and the easy access to a tremendous amount of oil led to the construction of five refineries in Washington State. In total, these facilities can process up to 618,000 barrels per day.
Unfortunately, nothing lasts forever… and that supply began drying up. We’ve been cataloging this continuing production decline for years (click chart to enlarge):
At this pace, production from both Alaska and California will soon fall below 500,000 barrels per day.
Perhaps it’s time for West Coast refineries to accept their Peak Oil fate… or is it?
Follow the Leader
In a far corner of Washington State, refineries are gearing up for a flood of oil — and this time, the supply isn’t coming from Alaska or California…
It’s flowing to the Pacific Coast from the Midwest. That’s right. North Dakota is returning to center stage as two miles of railroad track are quietly being laid down in the northwestern corner of Washington State.
That’s where British Petroleum’s Cherry Point Refinery is located, which processes 225,000 barrels of crude every day. And after watching Alaska’s oil output take a nosedive over the last few decades, refinery workers are breathing a sigh of relief that they once again a strong source of light, sweet, crude oil.
The only question is how to get more than 770,000 barrels per day to market.
All Roads Lead to North Dakota Oil Fields
After the recent tragic events that took place in Quebec, questions surrounding our own oil industry’s infrastructure will — and should — be at the center of discussion.
Remember, more than two-thirds of all barrels of oil coming out of the Williston Basin is being shipped by rail. Less than one-quarter of the areas production is transported via pipe, with the rest being trucked out.
The reality is that rail will play a major role in any scenario going forward…
Naturally, this situation has also created a perfect storm for individual investors like us.
But when it comes to shale plays like the Bakken that are dominating the U.S. oil industry, bigger isn’t always better. Let me explain…
Beat Big Oil Every Time
By “bigger,” I’m not referring to the billions of barrels tightly held in the rock, but rather the companies pumping it out of the ground.
We’ve watched as giant companies feverishly spend cash (billions at a time!) to buy acreage in new shale plays…
But they still always manage to come late to the party!
And here’s what most investors don’t realize: When going head-to-head against the largest publicly-traded oil companies, it’s almost too easy to come out on top.
You know these companies all too well. They’re the same ones spending a ton of money on ad campaigns to whitewash their tarnished public image, instead of spending those millions on getting more barrels out of the ground.
(How many of BP commercials did we have to sit through after the Deepwater Horizon incident?)
To be fair, BP is an easy target these days. But what about the rest of the famous supermajors?
Well, if you had a few bucks to invest back in the 1960s, you would have generated a considerable gain.
So yes, it’s true that investing in Big Oil has turned out well for people willing to sit on their thumbs for decades at a time.
But you might not want to wait a better part of a century before cashing in on the lucrative oil investments in today’s market…
And a cursory glance at their performance over the last few years isn’t nearly as attractive compared to some of the best and brightest Bakken producers, like Continental Resources:
When it comes to production, my friends, all roads lead to the Bakken.
In fact, it wouldn’t surprise me to learn that North Dakota has already surpassed 800,000 barrels per day. I think we’ll see that headline plastered across mainstream media before we ring in the New Year.
Trust me when I say this is an oil boom you can’t afford to miss…
Until next time,
A true insider in the technology and energy markets, Keith’s research has helped everyday investors capitalize from the rapid adoption of new technology trends and energy transitions. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital, as well as the investment director of Angel Publishing’s Energy Investor and Technology and Opportunity.
For nearly two decades, Keith has been providing in-depth coverage of the hottest investment trends before they go mainstream — from the shale oil and gas boom in the United States to the red-hot EV revolution currently underway. Keith and his readers have banked hundreds of winning trades on the 5G rollout and on key advancements in robotics and AI technology.
Keith’s keen trading acumen and investment research also extend all the way into the complex biotech sector, where he and his readers take advantage of the newest and most groundbreaking medical therapies being developed by nearly 1,000 biotech companies. His network includes hundreds of experts, from M.D.s and Ph.D.s to lab scientists grinding out the latest medical technology and treatments. You can join his vast investment community and target the most profitable biotech stocks in Keith’s Topline Trader advisory newsletter.