Wednesday, May 29, 2013

Never send a pipeline to do a train's job

Got this email from my local Rep. saying "Thousands of potential jobs sit on the sidelines and we continue to rely on oil from the Middle East" because we haven't approved construction of the Keystone XL pipeline.

Baloney, I say.  Keystone XL pipeline?  Bah!  Who needs it?

There has been much braying and trumpeting going on in good old Washington DC lately about how, when and if the Keystone XL Pipeline gets built.

If you listen to the trumpeting, you'd think all of western civilization hangs in the balance.  If we could just build this pipeline, unemployment would be solved and then all that Canadian and North Dakotan oil would flow downhill to our refineries and we could tell the Middle Eastern oil producers what they can do with their oil! (Sell it to China and India, perhaps?  That's where it's going now, anyway.  Most of our oil comes from our hemisphere.  Only 13% comes from the middle east.  Check it out! where does our oil come from?)

If you listen to the braying, you'd think we (and our food animals) would be all eating, not only genetically modified corn, but well lubricated corn, as well - that all of Nebraska would become just one big oil puddle if the thing sprung a leak. (example here: The pipeline is the root of all evil)

But, from both of them you get the idea that no pipeline = no oil.

So, I'll let you in on a secret.  We don't need the Keystone XL pipeline.  

I'm not talking about solar or wind or biomass or natural gas or coal or even conservation.

I'm talking about a way to get all that oil to where it needs to go without building a pipeline from anywhere to anywhere - RIGHT NOW!

Trains are moving the oil.

Well, you say, "how much oil? Trains can't possibly move as much oil as a pipeline."

Well, you would be wrong.  Trains can move ALL the oil.

Here are some facts.

The Keystone XL pipeline is designed to handle 830,000 barrels a day.  That sounds like a lot, until you find out that one single train can carry 89,000 barrels of oil. (for the detail oriented:  A barrel is 42 gallons.  A tank car can hold 30,000 gallons.  A train can have 125 cars.  Do the math!)  So, the Keystone pipeline can be replaced by nine trains a day.  Is that a lot?  Not really.

Consider that railroads run 100 coal trains a day out of the Powder River in Wyoming.  50 years ago, that number was near zero.  The track and equipment to reach that total was put in place in a span of a decade or two.  So, can railroads rise to the challenge of moving crude oil.  Certainly, they've proven  more than that in recent past history with coal.

This coal train is on the last 50 miles of it's 1700 mile trip.  One of approximately 100 coal trains a day to operate out of the Power River Basin in Wyoming.

In fact, they've already proven it this year.  Right now, railroad are carrying more than 800,000 barrels of oil a day to east coast refineries - a longer haul than the planned 1200 mile pipeline.

Here's another fact to consider - the value of the oil in transit.

The 3 foot diameter pipeline holds ~ 1.25 barrels per linear foot.  In order to get 830,000 barrels a day out of the end, the goo has to flow at 5 mph.  Oil trains can average about 20 mph terminal to terminal, so trains only tie up 1/4 of the inventory that would be tied up in transit in a pipeline.  How much is that inventory worth?  At 20 mph for 1200 miles, it would take about 23, 125 car train sets to handle 830k barrels per day.  At $100 a barrel, that's $2B in oil on the move.  For the pipeline, it would be four times that - $8B!  That's a lot of money to have laying around doing nothing!

So, if RRs can do it all and do it faster, why all the interest in the pipeline?


It's not about national security or jobs or stifled energy production.  None of that.

It's just transportation cost.

Pumping the goo through a three foot pipe at 5 mph uses quite a bit less energy than a train of tank cars moving 40-50 mph.  Energy isn't cheap.  Also, every train needs a fresh, two man crew every couple hundred miles.  Not so for the pipeline.  The difference might be a few cents per gallon in price at the pump for us.

Also, to some extent, safety.  Railroads run though the middle of towns because those towns grew up along the rail lines when it was the only way to get around.  An oil train derailment in a town could be a mess.  A new oil pipeline can avoid towns.  Even though railroads have a generally excellent safety record, pipelines are a bit safer, inherently.

Sum these up and the balance tilts toward the pipeline by a nose. long as you have a lot of product,

...going from A to B,

...for a long time.

That someone is willing to build it for profit tells me the economics are likely there.  So, the way being clear, let them.

But, is the pipeline the "ultimate answer to life the universe and everything"?  No. (42 is the answer) We could live without it.

Easily.  So why all the fuss?

But, our friends in Washington need something to do. Trumpeters and brayers, how about this?

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