New pipeline policy could solve Keystone XL problems 06/08/14
by John Brian Shannon
Which are the most dangerous pipelines?
It’s an easy answer. Old pipelines.
Oil companies don’t advertise the first 15 years as the safest pipeline years. All bets are off after 30 years. And almost every pipeline spill in North America shows a pipeline well past 30 years of age.
One of the biggest problems contributing to leaks and ruptures is pretty simple: pipelines are getting older. More than half of the nation’s pipelines are at least 50 years old. — How Safe are America’s 2.5 Million Miles of Pipelines? published by propbulica.org
The average age of North America’s petroleum pipelines is getting older all the time (as there are few new pipelines are being built) so the existing pipeline network continues to age. But some pipelines built 30+years ago are so fragile from a maintenance perspective that they shouldn’t be allowed to transport toxic crude oil, dilbit, petroleum distillate, bunker fuel, or coal oil.
Forty-one per cent of U.S. oil pipe was built in the 1950s and 1960s; another 15 per cent of the country’s 281,000-kilometre network was built before then. In Alberta, 40 per cent of pipe was built before 1990. — Globe and Mail
How long does it take to ‘pay off’ a pipeline investment?
Depending upon the terrain a pipeline is traversing, pipelines can cost anywhere from thousands of dollars per mile up to millions of dollars per mile, especially when laying them through populated areas or under or above rivers and lakes. It can cost billions of dollars to build one pipeline.
Of course, if you want to move petroleum through a pipeline to your oil refinery, you are going to pay a significant dollar amount to transport that oil across the continent. Each oil refinery can refine up to one million barrels of oil per week. The oil refinery has only so much storage available to it on-site so it usually ships the refined product out ASAP via another pipeline system to a rail network, or direct to the customer via yet another pipeline.
After 15 years of operation, pipeline companies finally ‘break-even’ on their original investment
“Now we can finally make some money!”
Pipelines are quite costly to gain approval for from national and local regulators, to buy or lease the land, to design, build and operate. It also is the case that oil companies pay millions of dollars per year to the pipeline companies to move their liquids around. It is an annual business of billions, not millions.
We all need to make money and pass the ‘break-even’ point in our investments
We all want and need to make a return on investment (ROI) which is the reason we start businesses in the first place. But, just at the point that a pipeline has finally broken-even investment wise for its investor group, it is beginning to seep oil at the gaskets (called ‘weeping’) and also leak oil at the pump stations, and at areas where the pipeline has been disturbed by ground movement due to frost, ground settling, or earthquake movements. Some of this weeping can continue on for many years before anyone visits that remote area, which may not have been visited since the construction of the pipeline. Running toxic liquids across a continent safely, but economically, are mutually exclusive matters.
But without oil pipelines, our economy would grind to a halt within 90 days
Without pipelines, only coastal cities would be able to receive gasoline, diesel, kerosene, or other liquids used for transportation fuels, via international shipping lines. Other users of petroleum, such as chemical, plastics, and pharma companies would need to relocate to coastal areas to receive their petroleum ingredients.
It is a case of need vs. greed
- “We need the oil, keep it coming,” say consumers.
- “We need to keep our environment clean,” say a rapidly growing number of citizens/consumers.
- “We need to recoup our pipeline investment and make a profit in order to stay in business and we do it all for groups #1 and #2,” say the pipeline companies.
If ever there were a situation calling out for compromise, this has got to be it.
But the simple fact is, old pipelines weep plenty of oil and eventually burst, releasing tons of toxic liquids into the environment. New pipe does not burst or leak — unless it was to be hit by a derailed train, a transport truck, or an airplane crash — all of which are very unlikely events.
A mechanism for safe petroleum transport that works for all
Add a mile of new pipeline | Remove a mile of old pipeline
There are many pipeline systems that have been transporting petroleum for 30+ years in North America. These old pipes weep oil everyday. You might not see it, some of them are underground, or in wilderness areas where pipelines often traverse, or are just not accessible for viewing by the pubic or inspectors for that matter.
Some pipelines in North America are 45+ years old and they are big leakers — and just like purchasing carbon credits — one pipeline company could sell their RRR credits to another company that is ready to build a new pipeline.
It may seem odd for you to hear this solution from a renewable energy proponent; We should build more new pipelines!
What? Yes, but only if we completely remove 30+ year old pipelines on a mile-per-mile basis and remediate the soil and replant native species of plants along the historic route of the removed pipeline.
If pipeline company “A” wants to build a new pipeline, (such as Keystone II, for example) then government regulators should require that for every mile that they want to install new pipeline, the pipeline company is required to completely remove and remediate the soil and plant life, from whence an old pipeline has been removed.
This would help us to get rid of thousands of miles of old, leaking, and rusting pipelines that even the oil companies have forgotten about. They are environmental catastrophes just waiting to happen.
You can never completely empty a pipeline so they just sit there decade after decade weeping oil into the groundwater. Some old pipelines, although very leaky, are kept in place just in case of emergency so oil can be quickly diverted to the old pipeline for transport to a different junction in the system — and thereby still arrive at the oil refinery (and likely a day late and a few tens of barrels of oil short).
But that isn’t the best solution for the environment.
The best solution is easier approvals for newer and safer pipelines, contingent upon Retiring, Removing and Reclaiming (RRR) the land on the same total mileage of 30+ year old pipeline in the North American petroleum distribution network.
If Keystone II is 3500 miles of shiny new, high-tech, and state-ot-the-art pipeline, that’s great. It’s orders of magnitude less likely to leak, than 3500 miles of old pipeline.
All pipelines over 30 years old should be allowed to qualify for this removal/remediation programme. And the pipeline companies signing up for the Retire, Remove and Remediate (RRR) pipeline plan should receive tax incentives to assist in this regard. And, bonus, they can sell the land, once it is remediated.
Birth of a new industry
With the high prices of metals these days, oil and pipeline companies could find that passing the actual RRR work to another company could be the way to go. Even if the old pipe and pumps and pumphouses, etc, end up being sold for the scrap metal value, millions of tons of 30+ year old pipeline is sitting on the ground or just underground, waiting to be picked up and recycled.
Add in soil and plant remediation, and you have a whole new business model. A business where the workers could feel proud of the work they do!
“What do yo do for a living?”
Wouldn’t it be nice for an petroleum industry employee to be able to reply;
“I remove old, leaky pipelines, remediate the contaminated soil, replant the areas with native plants, and recycle millions of tons of old, leaky, pipeline metal.”
That has got to be the feelgood moment of the year, for any oil company employee.
Not your typical oil company employee job description
Yet, with some executive-level decisions and with a common-sense regulatory framework, RRR could finally solve the problem of the many thousands of miles of dormant but still weeping pipelines — and spawn a whole new business model — while helping to protect our North American ecosystems that wildlife depend on.