Relative Advantages & Disadvantages of Petroleum Pipelines

by Maria Kielmas; Updated September 26, 2017
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Petroleum pipelines are transportation systems for crude oil to refineries and end consumers. A network of high-grade steel gathering pipelines brings crude oil from different wells in an oil field to a storage point, a processing facility or a shipping terminal. A number of such gathering centers deliver the crude oil to a larger transportation pipeline whose diameter may be up to 48 inches. Pumping stations at intervals along the pipeline ranging between 10 and 200 miles ensure that the crude oil within the line keeps moving. These pipelines are vital arteries for crude oil transportation across continents and under water in maritime regions such as the Gulf of Mexico and the North and Mediterranean Seas.

Economics

Oil fields often are located in remote regions on land or offshore. The most cost-effective way to transport large amounts of oil over hundreds and thousands of miles is by pipeline. The economic disadvantage is the upfront cost of the construction. The 800-mile Trans-Alaska Pipeline System, which moves crude oil from Alaska’s North Slope to the port of Valdez, cost $8 billion in 1977. Russia’s planned 3,000-mile East Siberia- Pacific Ocean (ESPO) oil pipeline will cost $30 billion.

Safety

Pipelines are the least hazardous form of oil transportation. They are designed for an economic life of 30 to 40 years so pipeline operators have an incentive to invest in safety and technical reliability. Their often remote location means that they cannot be secured against deliberate sabotage or terrorist attack. The Cano-Limon to Covenas oil pipeline in Colombia that delivers crude oil to the country’s Caribbean coast has been attacked by terrorists regularly since 1986.

Environment

Oil pipeline construction has a significant environmental impact along its entire route. This includes the social impact on local settlements, the clearance of vegetation and the heat effects of hot oil in the pipe on frozen ground around it. Pipelines have a sensitive instrumentation system that enables the monitoring of leaks and ruptures but often these may not come to light until pollution hits a water course. Earthquakes and severe floods can rupture the pipelines unexpectedly.

Politics

Oil pipeline routes create political issues. A proposed extension to the Keystone XL pipeline, which would carry Canadian crude to deep-water ports in Texas, has met with fierce opposition from farmers and resident in the United States. This pipeline would double Canada’s oil exports to the United States. Russia’s proposed ESPO oil pipeline to its Pacific coast would halve that country’s oil exports to Europe.

About the Author

Based in London, Maria Kielmas worked in earthquake engineering and international petroleum exploration before entering journalism in 1986. She has written for the "Financial Times," "Barron's," "Christian Science Monitor," and "Rheinischer Merkur" as well as specialist publications on the energy and financial industries and the European, Middle Eastern, African, Asian and Latin American regions. She has a Bachelor of Science in physics and geology from Manchester University and a Master of Science in marine geotechnics from the University of Wales School of Ocean Sciences.

Photo Credits

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