NORMAN — The last time there was this much oil in the United States ready to be made into gasoline and other fuel Saddam Hussein had just marched his troops into Kuwait, setting in motion what would become the Persian Gulf War. And more and more of this oil is coming from under American soil. U.S. oil production is running at its highest level since 1999.
So, there's plenty of oil and more of it is coming from U.S. producers. But a lot of it is sloshing around storage tanks in Oklahoma. One reason is the Seaway Pipeline. It was built to bring U.S. and foreign oil from Texas Gulf Coast energy ports to the massive tank storage farm in Cushing, Okla., before being sent to Midwestern refineries. The trouble is American energy needs are changing direction.
Oil has been gushing into Oklahoma from Canadian oil-sands and the new crude freed from North Dakota shale rock creating an energy bottleneck. There's loads of oil in Cushing. A glut, according to many energy analysts. This actually has helped keep a lid on U.S. oil prices compared to more expensive foreign oil because the U.S. oil is trapped and is difficult to get into tanker ships and sent to overseas customers.
Beginning Thursday, the Seaway pipeline is scheduled to reverse course and begin sending crude oil from Oklahoma to the Texas Gulf Coast refinery row. Instead of lowering gasoline prices, it could actually increase prices as more of that oil sitting in its Oklahoma tanks has an easier time making it to market. A global and thirsty market.
Tom Hudson is anchor and managing editor of "Nightly Business Report," produced by NBR Worldwide and distributed nationally by American Public Television. Follow him on Twitter @HudsonNBR.