Energy Week

Pipeline Safety

President Obama needs to look at the safety record and then approve Keystone XL.

Friday’s jobs numbers from the Labor Department show that President Obama needs to approve the Keystone XL pipeline. Even with 175,000 jobs created in May, there are 2.4 million fewer jobs in America than at the start of the recession in December 2007.

Approval of the Keystone XL pipeline, to bring oil from Canada to our refineries near the Gulf of Mexico, would create jobs, both for constructing the pipeline and for refining the oil. But President Obama has delayed the pipeline’s approval, citing safety concerns.

Pipelines have been used to transport natural gas and oil, including from Canada to the United States, for three-quarters of a century. Almost 500,000 miles of interstate pipelines crisscross America, carrying crude oil, petroleum products, and natural gas, and over 2 million miles of natural-gas distribution pipeline send natural gas to businesses and consumers.

This extensive infrastructure network is heavily regulated by the U.S. Department of Transportation, which monitors the very issues central to the Keystone controversy: safety and reliability.

My review of accident statistics provided by the Department of Transportation shows that, in addition to enjoying a substantial cost advantage, transporting these substances by pipeline results in fewer spillage incidents and personal injuries than transporting them by road or rail. Americans are more likely to get struck by lightning than to be killed in a pipeline accident. The full paper can be found here.

The question of how to transport oil and natural gas safely and reliably is broader than Keystone XL. Petroleum production in North America is now at nearly 18 million barrels a day, and could climb to 27 million barrels a day by 2020, attracting manufacturing from abroad and creating yet more jobs. 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.

U.S. oil and natural-gas production is outpacing the transportation capacity of our inadequate national pipeline infrastructure. The Keystone XL pipeline is only one of many pipelines that will need to be constructed in the years ahead. Much of America’s refining capacity is located in the Gulf states, but large and expanding reserves of petroleum are being discovered in the north-central part of America and in Canada. Bringing oil to refineries, and then to end users, requires pipelines.

If this oil and natural gas can easily travel to where it is needed, all America will be able to benefit from lower energy prices and thus from increased economic activity and employment. New environmental regulations are closing coal-fired power plants, increasing the demand for natural gas. Large fleets of buses and trucks are switching to natural gas, and General Motors and Chrysler are making dual-fuel pickup trucks.

Approximately 70 percent of crude oil and petroleum products are shipped by pipeline on a ton-mile basis. Tanker and barge traffic accounts for 23 percent of oil shipments. Trucking accounts for 4 percent of shipments, and rail for the remaining 3 percent. Essentially all natural gas, except liquefied gas, is shipped by pipeline to end users.

If personal injuries and environmental damage caused by accidents in the transportation of oil and natural gas were proportionate to the volume of shipments, one would expect the vast majority of incidents to occur on pipelines. But the opposite is true — the majority of incidents occur on road and rail, as shown by Transportation Department data, even though more road and rail incidents go unreported.

Road transport had the highest rate of incidents, with 19.95 per billion ton-miles. This was followed by rail, with 2.08 per billion ton-miles. Natural-gas pipelines came next, with 0.89 per billion ton-miles. Oil pipelines were the safest, with 0.58 incidents per billion ton-miles.

Natural-gas pipelines had the lowest average fatality rate for operator personnel and the general public between 2005 and 2009, with a rate of one person killed per year. This was followed by oil pipelines and rail, each with an average of 2.4 people killed per year. Road had the highest fatality rate, with an average of 10.2 people killed per year. This is not because many members of the public are killed in accidents involving oil trucks. Only 1.4 members of the public, on average, were killed annually, but an average of 8.8 operators died per year.

Not only are fatalities and other injuries relatively low, but the majority of those that do occur have been associated with pipelines that are part of intrastate natural-gas-distribution systems. The U.S. network of pipelines for natural-gas distribution spans over 2 million miles, and the federal government does not regulate state pipelines (local distribution and production-gathering lines), except for gathering lines that are located on federal lands. Local distribution networks, which account for the vast majority of pipeline miles and where the vast majority of accidents occur, are regulated by states and municipalities. The federal government would regulate the Keystone XL pipeline.

The evidence is clear: Transporting oil and natural gas by pipeline is safe. Furthermore, pipeline transportation is safer than transportation by road, rail, or barge, as measured by incidents, injuries, and fatalities — even though more road and rail incidents go unreported.

As America continues to ramp up production of oil and natural gas, our pipeline infrastructure becomes more and more important. 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 New York, should the Empire State allow production to move forward) and the Utica Shale in Ohio to the rest of the country.

In order for these resources to get where they are needed, America needs more pipelines — the safest way to move fuel.

— Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is a senior fellow at the Manhattan Institute. She is the author of Regulating to Disaster: How Green Jobs Policies Are Damaging America’s Economy (Encounter Books, 2012).





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