Pipelines are the safest way to transport energy

Story originally appeared on Market Watch.

WASHINGTON (MarketWatch) — Wednesday’s 714-barrel oil spill in Minnesota came not from oil drilling or hydrofracturing, but from the derailment of a Canadian Pacific Railway train bringing Canadian oil to America.

How odd that those who profess concern for the environment are trying to block construction of oil pipelines, the safest way of transporting oil.

There’s no better example than President Barack Obama’s delay in approving construction of the Keystone XL Pipeline. If approved, the pipeline would bring oil from Canada, our closest trading partner, to American refineries in the Gulf of Mexico, enhancing America’s energy security. Instead, Canada’s oil arrives by rail — and Canada is planning to build another pipeline to its West coast to ship the oil to China.

A crew hired by Exxon Mobil cleans up an oil spill along the Yellowstone River in Montana after an Exxon Mobil pipeline ruptured, dumping up to 1,000 barrels of crude into the river.
On March 1 the State Department issued a draft supplementary environmental impact statement on Keystone XL, concluding that the pipeline would not harm the environment. Comments on the impact statement are due on April 22.

The relative safety of pipelines vis-à-vis road and rail to transport oil and gas is an important topic. Data published by the Department of Transportation show that pipelines have lower injury and fatality rates than road and rail, in addition to enjoying a substantial cost advantage.

These findings have substantial relevance for America’s energy future. Petroleum production in North America (Mexico, Canada, and the United States) is now over 16 million barrels a day, according to the Energy Information Agency, and could climb to 27 million barrels a day by 2020. Natural gas production in Canada and the United States could rise by a third over the same period, climbing to 22 billion cubic feet per day.

Whether oil and gas are produced in Canada, Alaska, North Dakota, or the Gulf of Mexico, it will be used all over the country, especially since new environmental regulations are resulting in the closures of coal-fired power plants. Large fleets of buses and trucks are switching to natural gas, General Motors and Chrysler are making dual-fuel pickup trucks, and newspapers are speculating about the timing of natural-gas passenger vehicles for the American market.

Pipelines result in fewer fatalities, injuries, and environmental damage than road and rail. Already almost 500,000 miles of interstate pipeline crisscross America, carrying crude oil, petroleum products, and natural gas. The network of pipelines has a remarkable safety record. Americans are more likely to get struck by lightning than to get killed in a pipeline accident.

America has 175,000 miles of onshore and offshore petroleum pipeline and 321,000 miles of natural-gas transmission and gathering pipeline. In addition, over 2 million miles of natural gas distribution pipeline send natural gas to businesses and consumers. This is expected to increase as America shifts to natural gas to take advantage of low prices that are expected to last into the foreseeable future.

Pipeline transportation of oil and gas is safer than transportation by road and rail. Pipelines are the primary mode of transportation for crude oil, petroleum products, and natural gas. Approximately 70% of crude oil and petroleum products are shipped by pipeline on a ton-mile basis. Tanker and barge traffic accounts for approximately 23% of oil shipments. Trucking accounts for 4% of shipments, and rail for the remaining 3%. Essentially all dry natural gas is shipped by pipeline to end users.

If safety and environmental damages in the transportation of oil and gas were proportionate to the volume of shipments, one would expect that the vast majority of damages to occur on pipelines. But the opposite is true: the majority of incidents occur on road and rail.

Data on pipeline safety are available from the United States Department of Transportation Pipeline and Hazardous Materials Safety Administration Office of Pipeline Safety. Operators report to PHMSA any incident that crosses a certain safety threshold. These reports enable the public to calculate the safety of pipelines in comparison to road and rail.

Oil spills from rail are increasing, according to the PHMSA. Between 2010 and 2012, the PHMSA reported 112 oil spills, compared to 10 spills between 2007 and 2009, according to calculations by the Wall Street Journal.

In contrast, injuries and fatalities from pipelines are declining. There were an average of 32 serious incidents — defined as those involving a fatality, or an injury requiring hospitalization — between 2010 and 2012, compared to 42 serious incidents between 2007 and 2009, and 38 between 2004 and 2006.

To draw another comparison, according to the National Weather Service, there were an average of 37 reported deaths annually caused by lightning from 2002 through 2011. Over the same period, fatalities related to pipeline incidents were about 15 per year. An individual had more than twice the chance of getting killed by lightning as being killed in a pipeline incident.

Some claim that pipelines carrying Canadian oil sands crude, known as diluted bitumen, have more internal corrosion, and are subject to more incidents. However, PHMSA data show no incidents of oil releases from corrosion from Canadian diluted bitumen between 2002 and 2010. Oil sands crude has been transported in American pipelines for the past decade.

Pipeline safety matters because America continues to ramp up production of oil and natural gas. We need better pipelines to get oil from North Dakota to the refineries in the Gulf, and natural gas from the Marcellus Shale in Pennsylvania and the Utica Shale in Ohio to the rest of the country.

The new American energy revolution is attracting energy-intensive manufacturing, such as petrochemicals and steel, back to America. In order for energy to travel to new manufacturing plants, we need more pipelines — the safest way to move fuel.