API Forms Midstream Department To Focus On Energy Infrastructure Issues

by Jennifer A. Dlouhy in People, Pipelines, Politics/​Policy

WASHINGTON — The oil industry’s top trade group is reorganizing to devote more attention on the pipelines and processing facilities that connect oil and gas production with end users.

The American Petroleum Institute’s decision to create a new midstream department focusing on that segment of the oil and gas industry follows the lead of regulators, executives and environmentalists who also are increasingly involved in energy infrastructure.

“In order for America’s oil and natural gas renaissance to continue, we need a world class infrastructure system to deliver that energy to consumers,” said API CEO Jack Gerard in a statement. ​“Creating a division within our organization focused on midstream issues will enable the industry to address the critical issues around energy infrastructure.”

Other industry trade groups — such as the Association of Oil Pipelines — already are dedicated to midstream issues.

But they have taken on increasing importance, as booming domestic oil production strains the existing network of pipelines to transport that crude across North America. The geographical shift in U.S. energy production — with crude surging out of wells in North Dakota — also has encouraged energy companies and refiners to move more oil by rail.

Energy companies also are building splitters, crackers and fractionators to process surging U.S. oil and gas and split the hydrocarbons into components to be sold separately.

Environmentalists are increasingly taking aim at midstream energy infrastructure and pushing regulators to consider how pipelines and processing facilities contribute to carbon dioxide emissions by facilitating the production and consumption of oil and gas.

That new environmental battleground is illustrated by the fight over TransCanada Corp.’s Keystone XL pipeline and proposed facilities to liquefy natural gas for export.

The API’s move comes as the Environmental Protection Agency nears a decision on its next steps for combatting methane emissions from the oil and gas sector.

API’s new midstream division — a combination of areas previously split between the group’s upstream and downstream departments — will be overseen by Robin Rorick, a 19-year veteran of the trade group. Rorick has been API’s director of marine and security, focusing on maritime transportation issues and emergency response.