Cushing, Oklahoma

Cushing, Oklahoma
City

Pipeline Crossroads of the World monument (2006)
Nickname(s): "Pipeline Crossroads of the World"
Motto: "Personal Connections. Global Impact."

Location within Payne County and Oklahoma
Coordinates: 35°58′57″N 96°45′51″W / 35.98250°N 96.76417°W / 35.98250; -96.76417Coordinates: 35°58′57″N 96°45′51″W / 35.98250°N 96.76417°W / 35.98250; -96.76417
Country United States
State Oklahoma
County Payne
Area
 • Total 7.6 sq mi (19.8 km2)
 • Land 7.6 sq mi (19.8 km2)
 • Water 0.0 sq mi (0.0 km2)
Elevation 935 ft (285 m)
Population (2010)
 • Total 7,826
 • Estimate (2013)[1] 7,889
 • Density 1,000/sq mi (400/km2)
Time zone Central (CST) (UTC-6)
 • Summer (DST) CDT (UTC-5)
ZIP code 74023
Area code 539/918
FIPS code 40-18850 [2]
GNIS feature ID 1091897 [3]
Website City Website

Cushing is a city in Payne County, Oklahoma, United States. The population was 7,826 at the 2010 census, a decline of 6.5 percent from 8,371 at the 2000 census.[4]

The city was established after the Land Run of 1891 by William "Billy Rae" Little. It was named for Marshall Cushing, private secretary to U.S. Postmaster General John Wanamaker. An oil boom that began in 1912 led to the city's development as a refining center.[5]

Today, Cushing is a major trading hub for crude oil and a famous price settlement point for West Texas Intermediate on the New York Mercantile Exchange.[6]

History

The area that would become Cushing was part of the Sac and Fox Reservation. With the Land Run of 1891, a former government trader for the tribe, Billy Rae Little, built a house, established his claim, and laid out town lots.[7] The town got a post office on November 10, 1891 and was named for Marshall Cushing, private secretary to U.S. Postmaster General John Wanamaker.[7]

In 1902, the Eastern Oklahoma Railway line to Cushing was built. The Missouri, Kansas and Texas Railway added service on its own line built in 1903.[7]

Wildcatter Thomas B. Slick started an oil boom on March 17, 1912 when he brought in a gusher east of the town. Other wells were soon drilled nearby, and the oil field became known as the Cushing-Drumright Oil Field.[7] Oil production became based in nearby Drumright, Oklahoma, and Cushing became a refining center, when Consumers Oil Company opened a refinery in 1913.[7]

The oil boom did not last long. Annual production peaked in 1915 with 8.3 million barrels of oil, but production declined by fifty percent in 1916. Refining operations continued in Cushing until the last two refineries, Kerr-McGee and Hudson, closed. Rail service ended in 1982.[7]

Geography

Cushing is located in Payne County, Oklahoma at the intersection of state highways 33 and 18. Its geographic coordinates are 35°58′57″N 96°45′51″W / 35.98250°N 96.76417°W / 35.98250; -96.76417 (35.982628, -96.764171).[8] According to the United States Census Bureau, the city has a total area of 7.6 square miles (20 km2), of which, 7.6 square miles (20 km2) is land and 0.13% is water.

Climate

Climate data for Cushing, Oklahoma
Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year
Record high °F (°C) 81
(27)		 83
(28)		 92
(33)		 101
(38)		 100
(38)		 108
(42)		 117
(47)		 112
(44)		 110
(43)		 99
(37)		 85
(29)		 82
(28)		 117
(47)
Average high °F (°C) 48
(9)		 54
(12)		 61
(16)		 73
(23)		 80
(27)		 89
(32)		 94
(34)		 95
(35)		 88
(31)		 76
(24)		 62
(17)		 52
(11)		 72.7
(22.6)
Average low °F (°C) 25
(−4)		 30
(−1)		 36
(2)		 49
(9)		 59
(15)		 67
(19)		 71
(22)		 70
(21)		 61
(16)		 51
(11)		 37
(3)		 29
(−2)		 48.8
(9.3)
Record low °F (°C) −11
(−24)		 3
(−16)		 −2
(−19)		 23
(−5)		 32
(0)		 45
(7)		 55
(13)		 51
(11)		 35
(2)		 24
(−4)		 10
(−12)		 −1
(−18)		 −11
(−24)
Average precipitation inches (mm) 1.3
(33)		 1.6
(41)		 2.1
(53)		 3.5
(89)		 5.8
(147)		 5.1
(130)		 4.3
(109)		 2.7
(69)		 3.7
(94)		 3
(80)		 1.6
(41)		 1.3
(33)		 35.8
(909)
Average snowfall inches (cm) 3.6
(9.1)		 2.1
(5.3)		 1.3
(3.3)		 0.1
(0.3)		 — — — — — — 0.3
(0.8)		 1.4
(3.6)		 8.8
(22.4)
Average rainy days 3.3 3.9 5 6.5 7.4 7.8 7.1 5.2 5.9 5 3.1 3.3 63.5
Average relative humidity (%) 70 68 63 62 70 69 66 64 63 63 61 66 65
Source #1: weather.com
Source #2: Weatherbase.com [9]

Demographics

Historical population
Census Pop. %±
1900226—
19101,072374.3%
19206,326490.1%
19309,30147.0%
19407,703−17.2%
19508,4149.2%
19608,6192.4%
19707,529−12.6%
19807,7202.5%
19907,218−6.5%
20008,37116.0%
20107,826−6.5%
Est. 20147,868[10]0.5%
U.S. Decennial Census

As of the census[2] of 2000, there were 8,371 people, 3,071 households, and 2,002 families residing in the city. The population density was 1,096.1 people per square mile (423.0/km²). There were 3,636 housing units at an average density of 476.1 per square mile (183.8/km²). The racial makeup of the city was 79.66% White, 7.02% African American, 7.97% Native American, 0.13% Asian, 0.90% from other races, and 4.32% from two or more races. Hispanic or Latino of any race were 2.70% of the population.

There were 3,071 households out of which 29.9% had children under the age of 18 living with them, 48.7% were married couples living together, 12.4% had a female householder with no husband present, and 34.8% were non-families. 31.3% of all households were made up of individuals and 16.1% had someone living alone who was 65 years of age or older. The average household size was 2.39 and the average family size was 2.99.

In the city the population was spread out with 22.9% under the age of 18, 10.0% from 18 to 24, 29.5% from 25 to 44, 20.0% from 45 to 64, and 17.6% who were 65 years of age or older. The median age was 37 years. For every 100 females there were 111.4 males. For every 100 females age 18 and over, there were 115.6 males.

The median income for a household in the city was $26,483, and the median income for a family was $32,284. Males had a median income of $26,710 versus $17,711 for females. The per capita income for the city was $12,620. About 15.1% of families and 16.4% of the population were below the poverty line, including 21.0% of those under age 18 and 10.1% of those age 65 or over.

Oil industry

Historical

In the early 20th century, Cushing was a center for exploration of and production from nearby oil fields. At least two refineries operated in the town. As the oil fields started to run dry, starting in the 1940s, production and refining became less important. However, the maze of pipelines and tanks that had been built led to the NYMEX choosing Cushing as the official delivery point for its light sweet crude futures contract in 1983.

Operators

Enbridge crude oil tank farm has a maximum storage capacity of 20,060,000 barrels (3,189,000 m3) (2010)
The stairs give a relative perspective of the size of the massive storage tanks in Cushing

Cushing is a "vital transshipment point with many intersecting pipelines, storage facilities and easy access to refiners and suppliers." Crude oil flows "inbound to Cushing from all directions and outbound through dozens of pipelines."[11] In 2005, crude oil and refined products in the U.S. were almost always transported by interconnected pipeline systems. In Oklahoma, eight private companies operated almost all the pipelines and frequently operated oil terminals and refineries: Enbridge; Enterprise Products; Explorer Pipeline; Jayhawk; Magellan Midstream Partners; Plains All American Pipeline; Sunoco; and Valero Energy.

There is approximately 80 million barrels of crude oil storage capacity at Cushing.[12][13] A partial list of tank farm owners at Cushing are:

A partial list of pipelines with connections at Cushing are:[14]

Transhipment point for West Texas Intermediate (WTI) oil

Cushing is the delivery point for West Texas Intermediate, a blend of US light sweet crude oil streams.[11] traded on the New York Mercantile Exchange[24]

Cushing's strategic position as a major hub in oil supply led to WTI’s development as a significant physical market price reference or benchmark for over three decades.

In 2005 Cushing was described [25] as the most significant trading hub for crude oil in North America, connecting the Gulf Coast suppliers with northern consumers.

In 2006, with production increases from Canadian oil sands, one pipeline reversed direction, bringing crude into the Cushing Hub, rather than delivering crude from Cushing to oil refineries.

By 2007 Cushing held 5 to 10 percent of the total U.S. crude inventory. Signs made of a pipe and valve on the major highways near town proclaim Cushing to be the "Pipeline Crossroads of the World", and the town is surrounded by several tank farms.

Oil futures designated delivery point in the US

On April 13, 2007, the now-defunct Lehman Brothers released a study which claimed that West Texas Intermediate (WTI) Crude at Cushing is no longer an accurate gauge of world oil prices.[26] By May 2007, Cushing's inventory fell by nearly 35% as the oil-storage trade heated up.[27]

Oil giant BP, and energy-transport and logistics firms Enbridge Energy Partners (an affiliate of Canada's Enbridge), Plains All American Pipeline and SemGroup owned most of the oil storage tanks in Cushing in October 2007.[27]

Oil storage became big business in 2008 and 2009, when the supply glut in the oil market led to situation where oil futures were higher priced than their spot price.[28] Many participants—including Wall Street giants, such as Morgan Stanley, Goldman Sachs, and Citicorp—turned sizeable profits simply by sitting on tanks of oil.[27] Institutional investors bet on the future of oil prices through a financial instrument known as oil futures, in which investors contractually agree to buy or sell oil at a set date in the future. Investors can choose to take profits or losses prior to the oil-delivery date. Alternatively, they can leave the contract in place and take physical delivery of the oil at an "officially designated delivery point" in the United States; this delivery point is usually Cushing.

On July 13, 2010, BP announced it will sell its assets in Cushing to Magellan Midstream Partners.[29]

Cushing storage hub bottleneck

The bottleneck at Cushing's giant storage hub distorted benchmark U.S. oil prices for many years. In 2007 a large stockpile of oil at the facility was caused largely because Valero Energy Corp.'s McKee refinery near Sunray, Texas, was shut down.[30] With the refinery closed, crude oil prices were artificially depressed at the Cushing pricing point. The Eagle North pipeline reactivated in 2010, added offtake capacity to Cushing by connecting Valero's oil refinery in Ardmore, Oklahoma with Cushing's cheap crude oil. This should have resulted in boosting WTI prices which were discounted against Brent crude oil because of the glut.[31]

In March 2013 Valero Energy Corp.'s (VLO) McKee refinery in Sunray, Texas was closed for five weeks for planned maintenance.[32]

Government

Cushing has a commissioner-manager form of government.[7]

Education

The Cushing school district has five schools that include a preschool, two elementary schools, a middle school, and a high school. The district serves approximately 1,800 students.[33]

Notable people

See also

References

  1. ↑ "Population Estimates". United States Census Bureau. Retrieved 2015-03-07.
  2. 1 2 "American FactFinder". United States Census Bureau. Retrieved 2008-01-31.
  3. ↑ "US Board on Geographic Names". United States Geological Survey. 2007-10-25. Retrieved 2008-01-31.
  4. ↑ CensusViewer:Population of the City of Cushing, Oklahoma
  5. ↑ , D. Earl Newsome, "Cushing," Encyclopedia of Oklahoma History and Culture. Accessed June 9, 2010.
  6. ↑ "Crude Oil Futures Contract Specs. Delivery.".
  7. 1 2 3 4 5 6 7 , D. Earl Newsome, "Cushing," Encyclopedia of Oklahoma and History]'. Accessed June 9, 2010).
  8. ↑ "US Gazetteer files: 2010, 2000, and 1990". United States Census Bureau. 2011-02-12. Retrieved 2011-04-23.
  9. ↑ "Historical Weather for Cushing, Oklahoma, United States".
  10. ↑ "Annual Estimates of the Resident Population for Incorporated Places: April 1, 2010 to July 1, 2014". Retrieved June 4, 2015.
  11. 1 2 "Light Sweet Crude Oil (WTI) Futures and Options: When the World Asks, "What’s the Price of Crude Oil?" WTI is the Answer" (PDF). CME Group.
  12. ↑ Oil tanker demand booms as traders wait out cheap oil; cbc.ca; January 14, 2015.
  13. ↑ US running out of room to store oil; price collapse next?; AP; March 3, 2015.
  14. ↑ U.S. crude oil pipeline project; Yahoo Finance / Reuters; April 6, 2015.
  15. ↑ Company history; EOG Resources.
  16. ↑ First train with EOG Resources Bakken crude oil departs Stanley, ND for Oklahoma; EOG Resources; December 31, 2009.]
  17. ↑ Crude Oil Offload Terminal; JFSCO Engineering.
  18. ↑ Great Salt Plains Pipeline; IPS Engineering.
  19. ↑ JP Energy Partners acquires Parnon Storage and Paronon Gathering; Business Wire; August 14, 2012.
  20. ↑ Ken Newton (June 9, 2010). "Oil Flows Through Keystone". St. Joseph, Missouri: St. Joseph News-Press.
  21. ↑ Press Release – Keystone Pipeline Starts Deliveries to U.S. Midwest; TransCanada; June 30, 2010.
  22. ↑ "Liquids Pipelines". Enbridge. Retrieved 2012-02-08.
  23. ↑ EIA Short-Term Look At Crude Oil Pipeline Infrastructure; Pipeline & Gas Journal; April 2013.
  24. ↑ U.S. Energy Information Administration (EIA). "Upcoming Pipeline Capacity Additions Will Facilitate Continued Growth in Crude Oil Shipments from Midwest to Gulf Coast" (PDF). This Week in Petroleum. CME Group.
  25. ↑ The 2005 Oklahoma Refinery Report: Appendix A (PDF) (Report). Oklahoma: Office of the Secretary of Energy. April 2005.
  26. ↑ Margot Habiby (2007-04-13). "WTI Prices Don't Reflect International Oil Market, Study Says". Bloomberg.
  27. 1 2 3 Davis, Anne (6 October 2007). "Where Has All The Oil Gone? After Sitting on Crude, Speculators Unload It. The World's Eyes Fall on Cushing, Oklahoma". Wall Street Journal.
  28. ↑ Norris, Michele (17 December 2008). "Contango In Oil Markets Explained".
  29. ↑ "Magellan snaps up BP midstream package". Upstream Online (NHST Media Group). 2010-07-13. Retrieved 2010-07-13.
  30. ↑ Mark Shenk (2007-04-13). "Crude Oil in New York Falls on Increasing Supplies in Oklahoma". Bloomberg.
  31. ↑ Campbell, Robert (5 October 2010). "Valero oil refinery to link to Cushing hub soon". New York: Reuters.
  32. ↑ "Refinery Status: Citgo Reports Leak at Corpus Christi - WSJ.com". Wall Street Journal. 4 Apr 2013.
  33. ↑ Cushing School District, Education.com (accessed June 9, 2010).
  34. ↑ News services and staff reports (December 28, 2013) "Star center fielder won two titles with Orioles" The Washington Post, page B4. Retrieved December 28, 2013
  35. ↑ "Kelly Cook". databaseFootball.com. Retrieved December 15, 2012.

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