Pipeline Gridlock (Click to View Part 1)
With the shale boom in the US and the increase in production from Canada’s unconventional oil sands resources, oil and gas companies are producing so much oil that it’s straining the existing pipeline infrastructure on both sides of the border. In the US, there’s now a very real possibility of reaching energy independence. In Canada CAPP (Canadian Association of Petroleum Producers) forecasts that oil production levels will more than double between now and 2030. This is great news, but pipeline gridlock has become a very real and very serious problem.
Thanks to unconventional resource extraction, there is now an enormous supply of oil and gas in North America. The problem is getting the product to market. Within the US and Canada there are 3 primary methods for transporting crude oil: pipeline, rail, and transport truck.
Pipelines are by far the safest and most cost-effective method for getting oil to market, but a recent rise in well-funded and well organized anti-pipeline campaigns has led pipeline companies to become the industry whipping boy for environmental groups. At face value, the environmental opposition seems to be winning the battle by slowing down pipeline growth, but by impeding the infrastructure growth, they are actually losing the war. The oil will continue to flow, but producers are left with less positive transportation options – options which increase costs, options with fewer regulatory constraints and oversight, and options that are less safe and environmentally friendly than pipelines.
There’s a long road to travel in order to get to construction though as companies continue to wade through the miasma of public discourse, environmental push-back, and regulatory hoops. Getting to construction has become a very large public relations project. Historically, this has not been an area of strength for oil companies, but the world is changing and effective PR is crucial to getting things done and healthy discourse will result in better projects.
So what can be done? Can pipeline companies overcome the very real and growing opposition? Can they turn the PR machine on to get their safety message out and in the process do what’s right for the greater public? Pipeline gridlock won’t be solved today, but there is hope…
…more to come in Part 3