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Inside Energy: Pipelines

In the first quarter of 2014, the United States surpassed both Russia and Saudi Arabia as the world’s largest oil producer. It already hit that mark for natural gas late last year. All of that oil and gas has to be transported from the fields where it’s drilled to refineries and processing plants, and most of that is done by pipeline. But as Wyoming Public Radio’s Stephanie Joyce reports for Inside Energy, the nation’s pipeline infrastructure isn’t currently up to the task.

Driving along Wyoming highway 91, just west of Douglas, rancher Bob Kayser points out the window of his white pickup truck.

“See these pipeline markers? There’s three pipeline markers that go across me right here, and the fourth pipeline is on the other side of the house where we are…”

A short ways up the road, Kayser points out another landmark.

“See, this is the Oregon trail across here. And that’s why the pipelines and the power lines follow this. Because this was the easiest way for the settlers to come across, and it’s also the easiest way for the power lines and pipelines.”

Because of that, there’s a huge pipeline corridor. While Kayser has four on his property, some nearby landowners have as many as ten. Kayser says it’s both a positive and a negative. The positive: the pipelines carry natural gas away from oil wells, which reduces gas flaring, a source of harmful air emissions. AND the pipelines get truck traffic off the roads...  but the negative, in Kayser’s opinion, is that pipeline companies have an unfair advantage over landowners. That’s because of eminent domain, which allows them to essentially put the pipeline anywhere they want.

“When they put that pipeline in, you’re then prohibited from using the surface for anything but agricultural operations. If I want to put up a machine shed, I have to maintain a distance from the pipeline. So I lose the right to use my surface, and I get a small, one-time payment.”

And the pipelines that currently run across Kayser’s property aren’t likely to be the last. To deal with a glut of natural gas coming out of nearby oil wells, a processing facility is being built across the street. That means more pipelines and at least one of those could cross his property.

And that’s just the beginning…..More than a half a million miles of new pipeline will be built in the United States by 2035, according to a new study by the Interstate Natural Gas Association of America. That’s 22 trips around the Earth and then some.  A sizeable chunk will be built across the Rocky Mountain West.

“North Dakota, in 2012…”

That’s Justin Kringstad, with the North Dakota Pipeline Authority.

“Put over 2400 miles of new pipe into service. That’s the distance from Los Angeles to New York City, in one year’s time frame, all taking place within the state of North Dakota.

This year, three major crude oil pipeline projects will start moving oil out of the Bakken…the major shale play in North Dakota and Eastern Montana. Looking ahead to 2016, another three are planned, with a combined capacity of the embattled Keystone XL pipeline. Kringstad says companies are building as fast as they can.

“That pace of 2400 miles per year, it’s definitely not slowing down.”

It’s a similar story across the country. On a recent trip to Pennsylvania, I toured part of Washington County, where a lot of new gas development is happening in the Marcellus shale. Everywhere there were big tracts of newly-deforested land where pipelines had been laid.

And that estimate of a half million miles more might be low… Kringstad says his first attempt to predict Bakken oil production -- back in 2008 -- was so, so wrong.

“It’s almost laughable that we had such low expectations.”

The uncertainty is common across most shale plays -- from the Bakken to the Marcellus to the Niobrara in Wyoming and Colorado. And that complicates the task of estimating how much pipeline will need to be built…Wyoming Pipeline Authority director Brian Jeffries says he has a pretty good handle on how much new pipeline will be needed for natural gas and natural gas liquids in the next decade, but…

“Crude oil, man, I couldn’t call that one for you.”

But Jeffries says for the most part, the new pipelines will hardly be noticed by the general public. He gives an example. In a single half mile of I-25 between Cheyenne and the Colorado state line…

“There’s… mmm.. roughly three and a half billion cubic feet a day of gas going through there, which is about one twentieth of the US daily average consumption. They go up and over the bluff where that buffalo silhouette sits up on the bluff and head off. And nobody notices them.”

That is, until something goes wrong. Which is entirely possible. Right now, each federal inspector is responsible for almost enough pipeline to circle the earth. In short, they’re overworked. With the addition of hundreds of thousands of extra miles, it not clear how they’ll be able to keep up.

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