Hart Energy:

Paul, can you pinpoint what you have been following this year in midstream?

Paul Hart:

In many ways, this was the best of times and the worst of times for midstream. It was a very good year in that the midstream saw a lot of significant new infrastructure come on stream particularly providing capacity out of the Permian. We had Kinder Morgan starting up the Gulf Coast Express. Phillips 66 started up Gray Oak. Enterprise Products started their Shin Oak line. Also, outside of the key oil and gas plays, we had Elba Island start-up in Georgia which provides a new LNG export market for Marcellus and Utica gas. That's the good. We really accomplished a lot this year. We have a long ways to go but we accomplished a lot. Now, the bad in many ways I think the problems that the midstream sector has are sort of a good problem to have because there is so much to be achieved yet. I heard Harold Hamm speak the other day. He was talking about the United States as a world leader in oil and gas production has the benefit of great infrastructure but we need more particularly to support exports on the Gulf Coast and also to some extent on the East Coast as well. I think another thing that’s worth watching is particularly what's going to happen on the regulatory and environmental side. Those are big issues and they are key issues that affect midstream in particular due to the size and complexity of midstream projects. If you go out and build a 400-mile, 500-mile pipeline do you have to do a significant amount of regulatory work and also work with the community with regulatory leaders governmental agencies to get the job done. One that has just come along in recent weeks that I think is particularly worth watching is the rumored investigation by the FBI of the Mariner East project. Which I see either way it goes is bad. If indeed Energy Transfer and Pennsylvania regulatory authorities and the governor's office somehow did something to achieve permits that were needed, that's bad. On the other side, if someone in the environmental lobby is using a connection to the FBI to set up a bogus investigation of a legitimately needed midstream project that's bad too. So, it's something that should be of concern and we'll just have to wait and see how that works out. 

Hart Energy:

As you were mentioning with the LNG exports. Laying the groundwork is one thing, but having the regulatory backing or knowledge of really making that product move is important. You have to move it. 

Paul Hart:

Correct. My great midstream line is, “You can find all the oil and gas you want. You don’t make any money until you move it to the customer.” That is why midstream is so important to make the industry work. 

2019 Midstream Highlights: