Approval of the Dakota Access and Keystone XL pipelines has drawn the ire of many who claim that these pipelines pose a threat to the well-being of U.S. citizens. The rallying cry, “people over pipelines” has rung from the Bakken oil fields in North Dakota to the steps of the Capitol in Washington. Although these protests provide lurid headlines that sell newspapers, their claims are not realistic. Access to cheap and reliable energy is critical to the economic vitality of the United States.
In today’s energy market oil and gas are both relatively cheap and reliable energy sources. According to the U.S. Energy Information Administration, fossil fuels accounted for 81 percent of total U.S. energy consumption in 2015. That number is expected to remain relatively constant through at least 2040.
Given the importance of these products to our economy, efficient transportation methods must be employed in order to keep energy prices reasonable and to produce and distribute these essential fuels in a safe and economical matter. Pipelines are both a safe and economical way to transport oil and gas.
A 2014 report by the Congressional Research Service showed that pipeline is by far the cheapest method of transporting oil and gas. Moving petroleum products by pipeline costs $5 per barrel, compared to $10 to $15 per barrel by train and $20 per barrel by truck. Pipelines move much more product than these alternatives and do so at a much lower price.
Pipelines do more than help lower energy prices. In 2015, pipeline construction resulted in a $10.2 billion increase in labor income as well as a $15.5 billion contribution to U.S. GDP. And although pipelines move much more product than other methods of transport, they require far less human capital, another testament to their superior efficiency. This increase in efficiency allows producers to drill more wells and produce more oil, which creates more jobs overall for the economy.
Publicized incidents like the 2010 natural gas pipeline rupture in San Bruno, California, that killed eight people understandably result in public wariness about the continued use of pipelines. However, when compared with both train and truck transportation, pipelines are the safest way of transporting oil and natural gas.
A study by the Fraser Institute found that transporting oil and gas by pipeline results in fewer fatalities to operator personnel and the general public than any other transportation method. In fact, Americans are 75 percent more likely to die in a lightning strike than in a pipeline related incident.
Pipelines usually run through remote areas and are often underground while trucks and trains carrying similar products often move through dense metropolitan areas. That means that when trains or trucks spill, it can be much more devastating for humans. A train delivering U.S. oil to Canada derailed in Quebec in 2013, killing 47 people. By contrast, the Pegasus pipeline spill, also in 2013, harmed no one and was contained relatively quickly.
Despite their bad rap, pipelines are the most environmentally friendly method of moving oil and gas. Even though pipelines move a massive amount of product (almost 70 percent of all oil and natural gas moved in the United States) the average amount spilled per year is only 269 barrels. Transportation by rail results in the least amount of product spilled per year, about 83 barrels, but that number has increased dramatically in recent years as the amount of product transported by rail has increased. Even with that increase in rail usage, rail still moves only 3 percent of all oil and gas transports. Moving oil by roadway is the most dangerous for the environment, spilling 326 barrels annually while moving only 4 percent of all transported product.
Politicized demonstrations against the construction and use of pipelines dominate the discussion surrounding pipelines. Many of these protests center on the cry of prioritizing “people over pipelines.” But that formulation can only be realized when all of the relevant factors, such as costs and risks are properly taken into account. The ultimate goal is to deliver oil and gas to the consumer in the most cost-effective manner possible.
To do so, we must blend the three modes of transport in a way that achieves overall efficiency, which will lead to both superior economic and environmental outcomes.
For much of the distribution system, pipelines are the most efficient way to transport oil and natural gas and the best way to enhance human welfare and environmental health. Pipelines, then, are built for the consumer, not at their expense.
