Moving Crude
Why We Need Oil Pipelines Like Keystone

American oil production has grown more than 80 percent over the past seven years, and that’s put an enormous strain on producers’ ability to get their product to market. The WSJ has a great explainer on the various ways the oil industry is accomplishing transport and it’s well worth reading in full. In the first place, it sums up the pros and cons of moving crude by pipeline nicely:

Pipelines are typically the cheapest, and in some cases quickest, way to move crude in the U.S., and they spill less often than other transport methods. In 2014, pipelines delivered 3.4 billion barrels of crude oil to U.S. refineries, according to Energy Information Administration data. The Association of Oil Pipe Lines says it has a 99.999% safe-delivery rate on these shipments. “On an apples-to-apples basis, pipelines have less accidents, cause less environmental damage and cause less harm to human health than do railcars moving comparable masses of oil and gas,” says [the Fraser Institute’s Kenneth Green]…[But] even though pipelines don’t spill as often as other forms of transport, when they do spill, they can unleash a huge amount if not caught in time.

Pipelines account for the majority of America’s crude oil transportation, and no wonder—the U.S. has the world’s most extensive pipeline network by a long shot. But most of those miles on miles of pipelines were constructed prior to the shale boom, the pace of which took virtually everyone by surprise. Because of that, other forms of transportation have experienced significant growth over the past ten years, and one of them has captured considerable attention for a number of high-profile accidents. The WSJ continues with a profile of oil-by-rail transport:

Trains tend to spill a smaller amount of oil than other forms of transport. An International Energy Agency study said that from 2004-12 there were six times as many rail spills as pipeline spills, but “the average pipeline spill was far graver.”…[But rail] accidents potentially threaten lives and can cause widespread property damage. Many people, in fact, use the term “bomb trains” to describe them, because of their potential to explode in an accident. Trains also travel straight through many cities at street level—as opposed to pipelines, which tend to be located underground and often far from populated areas.

What’s more, train routes and schedules often aren’t disclosed, in part to prevent possible terrorism. That leaves emergency responders less equipped to deal quickly with accidents that may occur.

In 2010, just 20 million barrels of oil traveled our nation’s railroads. In 2014, that number spiked to 383 million barrels, according to the EIA. But oil isn’t just traveling by rail in increasing volumes, it’s also being loaded onto trucks, though the WSJ notes that they are “the least preferred method in terms of safety, air quality, expense and other factors.”

No one method of transport is unequivocally preferable to every other in every situation, but in terms of price, reliability, and public safety, pipelines seem to make the most sense more often than not. The Keystone pipeline debate appears to have gone into a kind of bizarro-hibernation this summer, possibly due to the depressive effect low crude prices are expected to have on high-cost projects, like Alberta’s oil sands. Another possible explanation: The furor over ending the ban on crude oil exports has stolen Keystone’s thunder.

But neither factor will be enough to kill the Keystone debate. For the former, the sheer size of investments that have already made in Canadian oil sands means that these projects will be going forward for years to come. Indeed, Alberta plans to boost production by 25 percent over the next two years. And as for the latter, Washington’s caprice won’t change the fact that the long-delayed project makes sense for all parties involved.

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