From the air above a small Oklahoma town, the 300 steel oil storage tanks that dot the landscape appear filled to the brim, their floating lids bobbing atop more than 65m barrels of oil.
There may be no better place to witness what a world awash in crude looks like, and the 23 sq km complex seems to bear out oil traders’ fears that the industry is running out of space to contain a historic supply glut that has hammered prices.
Such worries make weekly estimates of Cushing stockpiles from the US Energy Information Administration one of the hottest market indicators. These inventories peaked in mid-March and have edged lower since then.
Some traders reckon they are unlikely to exceed those records for years as refiners rumble back from seasonal maintenance and demand rises. Others warn the stockpile could rise again.
Up close, from a 24-hour bunker that controls a quarter of tank space here, the ‘pipeline crossroads of the world’, reveals its secret — there is some spare room left.
On March 24, the day after US government data showed Cushing’s tanks held a near-record 66.23m barrels of crude, Mike Moeller, manager at Enbridge, explained how the largest Cushing operator uses every last inch of usable space.
Operators and technicians make it possible by moving a half-million barrels per day in internal pipelines that link the major pipelines and tanks of its 20m barrel terminal.
Enbridge’s capacity has risen about a third over the past five years, but the volume of oil coursing through the jungle of pipes, valves and tanks that connects suppliers from as far away as Alberta’s oil sands to the Gulf of Mexico refiners has quadrupled.
“We are fuller than we have ever been,” Mr Moeller said. Customers tell Enbridge every month how much crude is coming, but Mr Moeller and his team leave some space at the top of each tank that might be needed in an emergency. With oil-flow acrobatics getting exceedingly complex, workers can ill-afford any lapse in concentration. The lights in the control room building get dimmer or brighter as the day or night progresses to keep workers alert through their shifts.
An exercise bike is on hand if their energy starts to wane. Mr Moeller, an Enbridge veteran of more than 15 years, arrived in Cushing in 2012 when the shale drilling and pipeline boom opened the latest chapter in its history as an oil town.
It started in 1912 when an oilman named Tom Slick discovered the area’s first crude.
While production ceased in 1920s, the town, halfway between Tulsa and Oklahoma City, has served as a storage location. In 1983 it was picked as the settlement point for the West Texas Intermediate futures contract.
The shale boom and the rapid rise of the Canadian oil sands industry transformed Cushing into a blending hub for light and heavy oil moving south.
© Irish Examiner Ltd. All rights reserved