US Infrastructural Pipeline System Expansion Reaches Critical Urgency Levels

October 7th, 2013 | by Morris Beschloss | Comments

While the last two years have experienced an unprecedented breakthrough in the recent record production of crude oil and natural gas, in ever growing numbers, what has been left behind is the upgrading and updating of a nationwide system of pipeline systems. These are needed to shift this overload of fossil fuels to crude oil refineries and storage areas for natural gas.

Such a deliberate neglect of America’s most demanding potential of a national pipeline infrastructure has also reached crisis proportions in the electric power arena. This was originally postponed in the wake of the late 1990′s-2001 Enron scandal, which had created the illusion of sufficiency regarding power plants and their transmission capability. However, the fossil fuel urgency is even greater as oil and natural gas through fracking has only begun to reach a peak approaching the 10 million barrels a day experienced currently only by Saudi Arabia and Russia. This unprepared-for expansion will put excruciating pressure on the refining capacity of America’s globally dominant 140 refineries. These have temporarily kept pace only through extraordinary expansion and constant maintenance. No new refineries have gotten off the ground in the past 30 years, as slowing U.S. oil derivative demand and lagging conventional drilling production hit a multi-year low during the “Great Recession.”

Currently, the soaring costs of such additions due to the fracking revolution future potential are not being contemplated. Along with nuclear facilities, which are being disclaimed worldwide, oil refining costs and the multi-year time frame necessary for completion have, for now, been put on the back burner. While the “greenfield” startup of oil refineries pose a problem for the future, a national crude oil pipeline grid is beginning to become more urgent with every passing week.

In addition to the lack of oil pipeline facilities in totality, the positioning throughout the nation in sync with the opening of new oil shale projects has made additional pipeline development overdue and increasingly urgent.

With the North Dakota Bakken Belt also pumping 1.5 million barrels per day, an amount expected to double during this decade, that “miracle of all production” is increasingly depending on rail tank cars. These themselves are in short supply, even though they have multiplied their capacity well over 100% in just the past four years. That’s insufficient. Even trucking is little more than a temporary expedient..

With federal funds no longer available for the staggering size of these relocations, the multiplicity of private exploration and production companies will have to take up the pipeline burden pronto. Early indications are that 2014 will be the year of unprecedented expansion. The extent to which this overdue startup can do the job will indicate not only the extent of this urgent problem’s resolution, but also the number of construction workers, and the appreciable manufacturing capacity needed to support the expected surge.

It’s no exaggeration to anticipate that the year 2014 will foretell a banner year for the U.S. energy development industry as a whole. Such success will also be depending on the strictures and hurdles that various government agencies might put in the way to restrain the breakneck speed with which the job must get done.
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