Expanding existing pipeline cheaper, safer than truck, rail

Posted: May. 19, 2020 4:00 pm

The use of hydraulic fracturing to extract oil from shale -- fracking -- has made America the world's largest oil producer.

Domestic oil production is roughly 13 million barrels a day, up from 5 million in 2008. The increase has necessitated billions of dollars of new investment to transport oil to refineries, mostly via pipelines.

While such construction can engender environmental protests, pipelines are the safest, cheapest, least polluting way to transport oil and gas, far better than truck or rail.

Constructing a pipeline requires enormous planning and investment to obtain the necessary permits, environmental reviews and rights of way. A faster, less expensive, safer alternative is to expand an existing pipeline.

The owners of the Dakota Access Pipeline are trying to do exactly that. The pipeline now carries 500,000 barrels daily from the Bakken oil fields of North Dakota, through Western Illinois to the Patoka Oil Terminal in South-Central Illinois.

The pipeline's current capacity is insufficient. Its owners want to construct three additional pump stations, which would double its capacity. The last hurdle is state approval for a pump station in Carthage.

The Illinois Commerce Commission has signaled its approval. Labor groups support the $40 million project, which will create union jobs.

The opposition comes from environmentalists, who prefer the oil be kept in the ground. They say blocking expansion may hasten a transition to carbon-free energy.

Unfortunately, 99.5 percent of all automobiles burn gasoline. Where will the oil that fuels them come from?

Increased U.S. oil production has boosted our economy. For starters, gas prices are lower. The average American household spends more than $2,000 a year on gasoline, largely invariant with income. Reduced gasoline prices disproportionately benefit low-income families.

The massive increase in domestic oil production also has left the U.S. less vulnerable to price fluctuations caused by global crises. A decade ago, the decline in Venezuela's production caused U.S. gas prices to shoot up. Today, Venezuela's dysfunction scarcely matters.

Finally, blocking the Dakota expansion doesn't mean the oil stays in the ground. Instead it will travel by truck or train -- a dirtier, more dangerous way to transport it.

Expanding oil production in an existing field is the least intrusive, most cost-effective way to do so.

Ike Brannon

senior fellow

Jack Kemp Foundation

Washington, D.C.