BAKKEN OIL BUSINESS JOURNAL

BakkenJournal_Oct-Nov16

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Read online @ B A K K E N O I L B I Z . C O M / d i g i t a l - j o u r n a l 15 Pipelines are in the news these days. First it was the Keystone Pipeline that was supposed to run from Canada down to Oklahoma. Successfully blocked by the Obama Administration. The last- est debacle to surface concerns the Da- kota Access Pipeline, intended to con- nect the Bakken region with a terminus in Patoka, Illinois on a route that passes through South Dakota and Iowa. Unfortunately, despite the best efforts of the pipeline's owners, Energy Trans- fer Partners, the Obama Administra- tion has once again stepped in and blocked this $3.8 billion project at the half-way point. Now what? What can En- ergy Transfer Partners do with a pipe- line to nowhere? Why does the current administration stand in the way of such beneficial projects? Let me digress. A few years ago President Obama spoke endlessly, tediously, about the need to undertake "shovel-ready projects." Pipelines are about as "shovel-ready" as construction projects get. However, for no defensible reason, a pipeline project that has al- ready employed thousands of high-paid union workers, a pipeline that will move millions of barrels of domestic crude oil 1,200 miles far more safely that it can be moved by rail, has led Obama to throw a wrench in the gears, yet again. Why? Seems the president's attention was drawn by protests undertaken by the Standing Rock Sioux tribe who seem to believe the pipeline is dangerous. Where did the President and the Standing Rock Sioux get this idea? Do they have a basis for believing the pipeline is dangerous? A REVIEW OF PIPELINES IS IN ORDER. Some basics. There are two types of energy pipelines: liquid petroleum pipelines and natural gas pipelines. In the US there are more than 190,000 By: CHRIS BISCHOF miles of liquid petroleum pipe- lines. The Dakota Access Pipeline, for ex- ample. Far larger is the natural gas pipe- line network, a vast complex of pipelines stretching 2.4 million miles. LIQUID PETROLEUM PIPELINES Within the liquid petroleum pipe- line network there are crude oil lines, refined product lines, and highly volatile liquids lines. Crude oil lines are subdi- vided in to "gathering lines" and "trans- mission lines". Gathering lines are constructed of small-diameter piping and located primarily in Texas, North Dakota, California, Oklahoma, New Mexico, Loui- siana, and Wyoming. Cross-country crude oil transmission pipelines, or trunk lines, bring crude oil from producing areas to refineries. They are larger, most 8 to 24 inches in diam- eter. The largest in the US is the Trans- Alaska Pipeline, which is 48 inches in di- ameter. There are approximately 55,000 miles of these lines. Next are pipelines that carry refined petroleum products – gasoline, jet fuel, home heating oil and diesel fuel. Approximately 95,000 miles of refined products pipelines serve the country. These pipelines deliver petroleum prod- ucts to fuel terminals. There, the prod- ucts are loaded into tanker trucks for final delivery. WHERE ARE PIPELINES LOCATED? In a word: everywhere. Mainline pipe is buried, but other pipeline compo- nents, such as pump stations, are above ground. Some lines are as short as a mile, while others may extend more than 1,000 miles. Some pipelines start from ports, such as San Diego and San Fran- cisco. They serve inland areas in Califor- nia and the southwestern U.S. THE BILLION DOLLAR QUESTION: ARE PIPELINES SAFE? The record shows pipelines are the safest way to transport energy. Crude oil and petroleum products shipped by pipeline reach their destinations safely more than 99.999% of the time. How do we know? Who's looking out for the public? There are several watch- dog agencies. A leading agency is the US Pipeline and Hazardous Materials Safety Administration (PHMSA). The Pipeline and Hazardous Materials Safety Administration, keeps records of leaks, spills, ruptures and human injuries. It has the power to impose fines and shut-downs. According to its records, over the last 20 years the safety record has proven beyond any doubt that pipelines are the safest way to move crude oil. The agency reports this: Since 1996 the total number of cases in which oil has escaped from pipelines is 15. In other words, an average of less than one escape per year – from oil pipelines. The amount of oil that has been spilled over that 20-year period is about 28,000 barrels. The spills resulted in 31 injuries and six deaths. By any measure of safety, these results are impressive. Contrast the injury and death figures with injuries and fa- talities in car accidents. More relevant, with respect to transporting oil, is the troubling number of railroad tanker-car mishaps. The PHMSA is not alone. Other agencies overseeing pipelines in North Dakota include: The US Army Corps of Engineers, the North Dakota Public Service Commission, the North Dakota CONTROVERSIES ➤ continued, pg 16 Pipelines and

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