Plain Talk about the Petroleum Industry

(Jamie) Thanks for staying with us. Now on Plain Talk, Kyle and Duane discuss the petroleum industry in New Jersey.
(Kyle) Hi, this is Kyle Bauer with Plain Talk with Duane Toews. Okay, let’s talk about the petroleum industry in New Jersey. (Duane) The New Jersey petroleum industry. (Kyle) What do you laugh about? (Duane) It’s not a very big state. (Kyle) There’s a lot of cars back there. (Duane) Well yes, but how many drilling wells could you put in New Jersey? (Kyle) Well, Pennsylvania has quite a few. (Duane) They do, yeah, well, are they still running as strong there? That was the first place in the country they found oil. (Kyle) When this new horizontal drilling came about, you had just as much to recoup or to resurgence in the industry as it did anywhere else. (Duane) They went back into those wells and recouped. (Kyle) What brought this up was I saw a map of where all the crude oil pipelines were. They are all out here between the Rockies and the Mississippi for the most part. They are all kinds of them out here. There’s none over there. I seem to remember seeing refineries and I happen to send that to a friend, and he said, “Yes, how did those refineries in New Jersey get outside there? Probably imported oil off of ships.” We both went to looking, and sure enough almost all the oil that came into New Jersey until recently was imported oil. Because once you load it on a ship, and that’s the easiest, cheapest way for them to get it, but recently that changed. What would that have changed to? And why would it have changed? (Duane) I was going to say, why would it have changed? (Kyle) Because actually domestic oil recently got cheaper. (Duane) They could truck it in. (Kyle) No. They had trains coming out of the Bakkens and out of Canada. A lot of those unit trains that we heard coming out of the Bakkens every day, they were going east, they weren’t going south as they used to, to Mexico, they were going east. (Duane) That’s interesting. (Kyle) They also have barges that literally it’s the same as a ship I guess. They barge it up from the Gulf, up to that area. (Duane) That to me seems like a pretty logical way of doing it. (Kyle) Here, two of the three refineries have closed in the last three years and what do they use them for? Also, New Jersey is the crossing point for almost all the product lines, in other words, gasoline, and diesel and all the things that you bring off of that. They basically just turned them into storage facilities. The storage facilities are so big, that the federal government saw no reason to have a heating oil reserve anymore in the northeast part of the United States, they said, “We’ve got enough storage, we don’t need any more.”
(Jamie) Thanks for joining us. I’m your host Jamie Bloom and I hope you enjoyed today’s show. See you next week on Farm Factor – we’re here every Tuesday on AGam in Kansas.

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