Moving Petroleum Smartly

This is the second discussion post for my Energy Science and Technology course. The question I was responding to was “What’s your plan for North American petroleum transportation?” These posts are limited to 500 words, so I couldn’t touch upon all possible aspects of the issue. While I would like us to wean ourselves off oil, especially tar sands oil, I don’t think vetoing the Keystone XL or other pipelines gets us there. Instead we need other approaches such as subsidies for renewable energy, a carbon tax, increased efficiencies, etc. 

Petroleum will be the primary energy source for the U.S. for the foreseeable future, as this chart shows:

(Source: Energy Information Administration)

(Source: Energy Information Administration)

Therefore, our focus should be on getting it to refineries in the safest, least environmentally damaging, and most economic way possible, whether it originates in the U.S. or Canada. The three options available to us are: pipelines, trains, and tankers (trucks are not capable of bulk transport). Let’s look at each in turn.

Pipelines are by far the primary petroleum transport method in the U.S. In 2013, pipelines moved 8.3 billion barrels of oil with a 99.99% safety rate. By way of comparison, let’s look at the Keystone XL project. Using it plus existing pipelines to transport crude to the Gulf of Mexico would result in 518 barrels released per year. The alternative options using rail/other pipelines and rail/tanker would result in 1,227 barrels and 4,633 released per year respectively. A limitation of pipelines is that they have to be where the oil is.

Trains combine wide geographic coverage with large carrying capacities. They link even developing plays, such as Bakken, with refineries. However, although crude petroleum transport by train nearly doubled from 2012 to 2013, U.S. trains still only carried approximately 260 million barrels in 2013, only about 1/30th of that carried by pipeline. According to the Association of American Railroads, the rate of hazardous-material spills, which includes petroleum and other materials, for trains was about 2.7 times higher than for pipelines in 2013. Additionally, rail transport costs about three times more.

While tankers are the primary way oil is moved around the world, they are a very limited option for moving petroleum from U.S. and Canadian oil fields to refineries. The petroleum still needs to be moved somehow from land-based oil fields to ports. This is done by pipeline or train, so tankers are a secondary carrier. When used, tankers are safe (99.99% safe delivery over past 10 years), environmentally friendly by comparison (2.7% of global CO2 emissions compared to 21.3% for airplane, train, and truck), and cost efficient (long-haul freight contributes 1% to the cost of a gallon of gasoline).

Clearly, pipelines best satisfy safety, environmentally safety, and affordability requirements. Approval of Keystone XL and other pipelines that have passed reviews must be approved quickly, especially to transport oil from new fields such as Bakken. Even then, Keystone XL won’t be operational until 2018. Meanwhile, the U.S Department of Transportation must implement rules requiring retrofitting or retiring DOT-111 railcars that transport oil and additional measures to increase the safety of crude oil transport by rail.

Petroleum will continue to be moved around our country for many years to come, let’s be smart about it.

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