US Energy Transportation Network Gets Multibillion-Dollar Revamp

Hugh Pickens writes writes "Simone Sebastian writes in the Houston Chronicle that the nation's energy transportation network is undergoing a multibillion-dollar overhaul, as oil and natural gas production surges in new regions of the country and energy producers charge into new areas with technology that can reach oil and natural gas trapped in shale and other tight rock formations leaving pools of crude and gas stranded far from the Gulf Coast refineries and petrochemical plants that need them. 'Where it used to be isn't where it is now. Where it needs to go isn't where it used to go,' says Terrance McGill, president of fuel carrier Enbridge Energy. 'You're seeing this fundamental shift of crude oil across the country.' For example Phillips 66 CEO Greg Garland says his company is considering buying 2,000 more rail cars that could carry an additional 150,000 barrels a day from shale regions (PDF) to its refineries across the country because the glut of crude oil pouring out of the newly tapped shale oil plays like North Dakota's Bakken has kept the price of Mid-Continent crude at a record-wide discount of up to $27 per barrel relative to its rival European benchmark Brent crude because there is not enough pipeline capacity to get Bakken crude to Gulf coast refineries. 'That's a pipeline on wheels,' says Garland. 'You'll see us stepping out and doing some more things around infrastructure. Like everyone else, we're doing everything we can to get more barrels in front of those facilities.'"

Comments

Great. Where are my cheap solar panels?

[crazyjj]

How come all the oil and gas companies keep expanding like this and all the solar companies keep going bankrupt? Wasn't it supposed to be the other way around? Damned hippies lied to me again.

Re:Great. Where are my cheap solar panels?

[jdastrup]

Hopefully these new 2000 rail cars can be modified to transport solar and wind energy to bring these Energies of the Future to locations where they are currently unavailable. Even better if the locomotives are corn powered. Or, just grow the corn on the trains using the solar energy they are transporting and we'll have perpetual energy trains.

Re:Great. Where are my cheap solar panels?

[sl4shd0rk]

How come all the oil and gas companies keep expanding like this and all the solar companies keep going bankrupt?

For one, Koch Bros., and others like them, pretty much own the Republican party in the USA. It comes in handy when you want to make sure emerging technology doesn't threaten your empire.

Secondly, too many people just don't care and more would rather eat up lies and witch-hunt drama because it's easier than figuring out the facts. This keeps seats in the senate full of corporate sponsored asshats who in turn pass votes to allow things like alternative energy solutions to be derailed before posing a threat to the oil empire.

Time to get off the oil addiction

[presidenteloco]

You may as well be discussing the pros and cons of the new heroin shipping routes.

The fossil fuel addiction is just as destructive and involves the same level of denial of reality.

Specially for tech people. Get off the obsession with oil based technology and make us some seriously steampunk alternatives that work.

Why do we want to ship crude x-country?

[trims]

I'd be interested in seeing a good analysis of exactly WHY something like the Keystone XL pipeline (or the OP's huge number of railcars) is necessary for shipping crude to the Gulf Coast.

I realize that 80% of the US's refineries are on the Gulf, but, given a couple of things:

• The tar sands are *relatively* clumped together in Alberta
• After a re-alignment of oil sources, the vast majority of tar sands oil will be used domestically (Canada and USA)
• building a refinery is expensive, but we need the extra capacity anyway
• refining close to the tar sands extraction site reduces the total requirements for transport of the final products (i.e. the oil source to refinery to recipient); that is, not only do you reduce the total volume of end product being produced (as refining 1 gallon of crude produces under 1 gallon of end-products), but you can ship end products essentially directly from the tar sands to end-users. Given that the distance from the Gulf to the end-users is no shorter than from Alberta to the end-users, this saves a whole lot of transportation costs for the crude oil.
• what's the cost differential between building the Keystone XL vs a large refinery (or a couple) up in Alberta?

Something similar goes for the various Shale gas extractions - I would think that it would be far better to build power generation (since that's where 90% of the gas is going to go) right near the gas fields, and then spend money on an upgraded Power Grid, rather than try to ship the gas around to existing power stations.

Basically, I think we're falling into the trap where we just assume that transportation is less expensive than co-location of end use. I'd far rather pay for another refinery and gas power stations (added capacity) AND a better power grid, than cough up the same amount for just another couple of pipelines (which, frankly, all they add is environmental disaster potential).

-Erik