Glut of dangerous shale oil affects drop in global oil prices

With oil trading at $86 per barrel at the end of October, after a sharp slide in oil prices, consumers are celebrating, while many analysts and bankers are scratching their heads. The prices were predicted by Goldman Sachs to continue to fall to $70 a barrel in the second quarter of 2015. According to a Wall Street Journal Article the writer points to multiple reasons for this drop in prices.

First, oil production in the USA has grown steadily, but recently production has also increased in other volatile countries, such as Libya and Iraq, while demand in China has been weak. Saudi Arabia has indicated in recent weeks that it is comfortable with the lower prices, but OPEC members are scheduled to meet at the end of November to grapple with the collapse of the prices. Because of the increased production from US sources, any threats by OPEC to cut production may do very little to inflate world prices.

According to another article, the supply of oil produced by American gulf states is growing into a glut, and it set to increase even more when the controversial Keystone pipeline begins to transport 700,000 barrels per day to Port Arthur, Texas. Shale oil production from North Dakota and Texas has shown sharp growth in the past 5 years.

What's bad news for oil company execs is good news for consumers. However, the transport of shale oil and tar sands oil has been shown to be risky, with many high-profile leaks and spills. This makes me wonder if the thick bitumen mixture that is transported in the pipelines creates abrasion issues with the welds and interiors of the pipes. If so, wouldn't it be wise for the pipeline and oil companies to investigate abrasion-reducing solution? Perhaps welding overlays could be an option that could be explored, for the sake of protecting precious aquifers and fragile ecosystems.

HP Plate provides an anti-abrasion protection solution that has been perfected and available since 1994. Protection solutions involving welding overlay of wear plates (or hard facing) have been proven to extend the life of pipes and other industrial equipment by many years, protecting the valuable capital investments of industries worldwide.

If you wish to find out how much we can save on equipment maintenance costs, and how long we can extend the life of your equipment, please visit this web page and fill out our form.