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Released November 11, 2021 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--With a few exceptions, Industrial Info's North American Industrial Project Spending Index has shown increased investments each month this year, as the economy slowly recovers from the effects of the COVID-19 pandemic and low oil and gas prices.
One of the exceptions is spending on oil, gas and liquids pipelines, which has had year-over-year increases for only two months so far this year.
The Project Spending Index is a monthly indicator that compares the current active spending rates with the previous year in order to get a measure of growth or contraction in the industrial market. The index provides spending details by industry and market region including monthly updates that measure the rate of activity from this year to last year during the same period.
For October, pipeline spending amounted to $15.2 billion in North America, down nearly 13%, or $2.25 billion, from spending in October 2020.
Click on the image at right for a chart showing the pipeline industry spending index for October by market region.
The lower spending numbers come as no surprise to Jesus Davis, Industrial Info's research specialist for North American Oil & Gas Production, Pipelines and Terminals, who said this year's investments represent the downside of a major pipeline building boom in recent years.
"The times of building new, 1,000-mile crude oil and natural gas pipelines across the country are gone for now," Davis said.
"Capital investments on pipelines have retreated from the highs of the previous decade," he continued. "Moving forward, the new normal will be substantially lower than the spending that was witnessed during the recent pipeline building boom."
Much of the building boom was tied to moving oil and gas from the Permian Basin and other big plays.
Industrial Info tracked pipeline project completions amounting to more than $20 billion worth of investments last year in North America. Subscribers to Industrial Info's Global Market Intelligence (GMI) Pipelines Project Database can click here for a list of detailed reports.
Last week, oil and gas pipeline company Enbridge Incorporated (NYSE:ENB) (Calgary, Alberta) said it expects to place into service C$10 billion (US$8 billion) of capital this year. Among its big-ticket items was the completion of the Line 3 Replacement Project, which restores the pipeline's capacity to 760,000 barrels per day (BBL/d) of crude oil and increases deliveries from Canada to U.S. refineries. Subscribers to Industrial Info's Global Market Intelligence (GMI) Pipelines Project Database can click here for the project report on the Minnesota segment. For related information, see November 9, 2021, article - Enbridge Expects $8 Billion in Capital Items to be Placed in Service This Year.
Not all pipeline projects have ended with such a satisfactory conclusion this year. In June, TC Energy Corporation (NYSE:TRP) (Calgary, Alberta) said it would terminate the partially built Keystone XL crude oil pipeline. This came after President Joe Biden revoked permitting for the $9 billion project on his first day in office. Other recent pipeline cancellations include the Atlantic Coast Pipeline Project, the Constitution Pipeline Project, the Liberty Pipeline Project and Canada's Eagle Spirit Energy Holdings Pipeline project. For more information, see June 11, 2021, article - Keystone XL Pipeline Termination: Not the First or the Last Project to Fall.
In September, developers of the PennEast natural gas pipeline called it quits, citing ongoing permit issues in New Jersey despite a favorable ruling by the U.S. Supreme Court last summer. For more information, see September 28, 2021, article - PennEast Pipeline Calls Halt to Natural Gas Pipeline Project, Cites Permitting Issues.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
One of the exceptions is spending on oil, gas and liquids pipelines, which has had year-over-year increases for only two months so far this year.
The Project Spending Index is a monthly indicator that compares the current active spending rates with the previous year in order to get a measure of growth or contraction in the industrial market. The index provides spending details by industry and market region including monthly updates that measure the rate of activity from this year to last year during the same period.
For October, pipeline spending amounted to $15.2 billion in North America, down nearly 13%, or $2.25 billion, from spending in October 2020.
The lower spending numbers come as no surprise to Jesus Davis, Industrial Info's research specialist for North American Oil & Gas Production, Pipelines and Terminals, who said this year's investments represent the downside of a major pipeline building boom in recent years.
"The times of building new, 1,000-mile crude oil and natural gas pipelines across the country are gone for now," Davis said.
"Capital investments on pipelines have retreated from the highs of the previous decade," he continued. "Moving forward, the new normal will be substantially lower than the spending that was witnessed during the recent pipeline building boom."
Much of the building boom was tied to moving oil and gas from the Permian Basin and other big plays.
Industrial Info tracked pipeline project completions amounting to more than $20 billion worth of investments last year in North America. Subscribers to Industrial Info's Global Market Intelligence (GMI) Pipelines Project Database can click here for a list of detailed reports.
Last week, oil and gas pipeline company Enbridge Incorporated (NYSE:ENB) (Calgary, Alberta) said it expects to place into service C$10 billion (US$8 billion) of capital this year. Among its big-ticket items was the completion of the Line 3 Replacement Project, which restores the pipeline's capacity to 760,000 barrels per day (BBL/d) of crude oil and increases deliveries from Canada to U.S. refineries. Subscribers to Industrial Info's Global Market Intelligence (GMI) Pipelines Project Database can click here for the project report on the Minnesota segment. For related information, see November 9, 2021, article - Enbridge Expects $8 Billion in Capital Items to be Placed in Service This Year.
Not all pipeline projects have ended with such a satisfactory conclusion this year. In June, TC Energy Corporation (NYSE:TRP) (Calgary, Alberta) said it would terminate the partially built Keystone XL crude oil pipeline. This came after President Joe Biden revoked permitting for the $9 billion project on his first day in office. Other recent pipeline cancellations include the Atlantic Coast Pipeline Project, the Constitution Pipeline Project, the Liberty Pipeline Project and Canada's Eagle Spirit Energy Holdings Pipeline project. For more information, see June 11, 2021, article - Keystone XL Pipeline Termination: Not the First or the Last Project to Fall.
In September, developers of the PennEast natural gas pipeline called it quits, citing ongoing permit issues in New Jersey despite a favorable ruling by the U.S. Supreme Court last summer. For more information, see September 28, 2021, article - PennEast Pipeline Calls Halt to Natural Gas Pipeline Project, Cites Permitting Issues.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
