Oil Transport Then and Now

The recent cyberattack on the Colonial Pipeline once again has highlighted the importance that pipelines play in our greater, national energy landscape. As a result of this attack, the US is now regulating security among the pipeline sector. Reading between the lines, from their inception to today, pipelines are an integral and safe conduit for transporting fuel across our nation. Don’t believe us? Ask the individuals who panic bought gas.

This reminded us of a similar problem from early 2019, when concern that the current pipeline infrastructure could not keep up with the surge in oil production. As such, the US is seeing a return to shipping oil by train. Which got us thinking: what are the limitations when it comes to transferring oil via pipeline? And based on conversations surrounding the Exxon Valdez oil spill and the Dakota Access Pipeline, how much safer is the use of pipeline versus other methods of transit such as rail, truck, and freight carrier?

According to the Smithsonian, the first pipeline was built sometime around 1862 and was a fairly crude wooden “V” that relied on gravity. This was the first of many steps to try and circumnavigate the use of wagons and boats transporting barrels of oil. Oh, it’s also probably important to note that the oil only flowed about 1000 ft.

Fast forward to 1975—the Alyseka Pipeline or Trans Alaska Pipeline System (TAPS) began construction. Three years and $8B later, an 800 mile pipeline connected the North Slope and the Port of Valdez. Unlike its wooden ancestor, this behemoth had safety precautions built in such as an emergency shut down mechanism, thermal regulation for stability, internal cleaning and well, it didn’t leave oil exposed to the environment.

However, this pipeline does not just function as a straw to allow an unlimited amount of oil to pass through. There are strict, physical and engineering barriers that regulate the amount of oil that can actually passthrough a pipeline at any given time. A 2014 study states that the low mobility due to high viscosity of “heavy crude oil” as well as impurities make it difficult to transport and refine. Heavy crude makes up a majority of what is extracted on Alaska’s North Slope and some of what is extracted in the Permian basin as well. Therefore, there is a finite amount of oil that can be transported via existing pipelines. And drilling sites throughout the US—especially those ramping up production in the PermianBasin—have met and exceeded this maximum capacity.

So where does this leave us? According to the Wall StreetJournal, the US EIA data shows an 88% increase in the use of railway oil movement. The political limbo of projects such as the Keystone XL and Trans Mountain lines have had the unfortunate consequence of shifting oil transit from pipelines to other mode of transportation. This is unfortunate due to the higher risk involved with transporting oil by rail. A study by the Frasier Institute in 2015 showed that oil transported by rail is over 4.5 times more likely to “experience an occurrence” than oil transported by pipeline and that a majority of pipeline occurrences are in contained facilities and involve less than a square meter of oil.

Overall, it appears that pipelines are most efficient when it comes to transporting oil. It is unfortunate that (the unique socio-political aspect of activism in North Dakota aside) environmental groups continue to slow efforts to build more eco-friendly modes of transit for oil. It is also unfortunate that, at times, these companies can work as their own worst enemy by refusing to share information (and thus can be vulnerable to digital hold-ups).As a petroleum-based world, the commodification of oil and natural gas will not change anytime soon. So, let’s be responsible in our resource development, supplying our nation with affordable energy and create some jobs while we are at it.

For more on oil transportation methods, including truck and maritime, check this out!

To find out more about advancements in pipeline technologies, go here!