There was a press story recently, regarding the pipes that the builders of the Dakota Access pipeline are stockpiling west of Aberdeen in anticipation of beginning construction sometime in 2016.
It shouldn’t come as a shock, as it’s fairly common for pipeline construction companies to stage pipe in the vicinity where construction will take place, as they have with the Keystone XL pipeline. For obvious reasons, as well as economics, the longer you wait to build something, the higher expenses for construction materials goes up. It happens all the time in school and municipal projects, and it’s the same with private enterprise.
If it’s cheaper by millions to buy now versus in a year, and it only costs tens of thousands to store it, the economics work pretty well. That’s just good business.
Predictably, despite companies trying to keep an eye on the bottom line, South Dakota’s nattering liberal class is mewling about a pipeline company (how dare they) preparing for moving forward:
Dakota Access has rented land from a farmer six miles west of Aberdeen to stockpile pipe for the Bakken oil pipeline, which is planned to run northwest to southeast across East River… assuming, of course, that the South Dakota Public Utilities Commission permits the pipeline to be built… which it hasn’t yet… which would make ordering 200 to 300 miles of steel rather premature, wouldn’t you think?
Read it here.
Absent a pipeline, what else is there? Rail? That’s all well and good aside from the fact that it diverts rail cars away from transporting grain and other ag goods to market. And the tendency for rail cars to explode every once in a while. Or so.
In fact, some people think they explode often enough that they made a special report about it.
So, liberals think pipelines are bad, and oil trains are bad. Unfortunately there are problems with other options.
#1 – No one is exploring sending oil by sustainable and renewable carrier pigeons.
#2 – The only sensible solution to transport oil is via pipeline.
Are pipelines perfect? No. Are they far better than rail cars? Yes, and pipeline safety constantly and continually improves, in addition to them moving far, far more oil. As noted in an article on CNBC last month, after one of the recent oil-car explosions:
Monday’s derailment of a CSX train carrying oil in West Virginia has reignited the debate about the cheapest and safest way to move oil across the country.
Diana Furchtgott-Roth, a senior fellow at the Manhattan Institute, told CNBC’s “Power Lunch” on Tuesday “if that oil had been carried by pipeline there would not have been this accident.”
“The advantage of pipeline is that the container is stationary and the product moves through it and it’s much safer than rail or truck, according to Department of Transportation statistics,” she said. “We need to put human lives above all of this.”
Read that here. Forbes, weighed in as well:
Of note, analysts say that it can cost as much as five times more to transport oil by rail than it does pipe, for moderate to long distances.
So, is it safer to send hazardous liquids by railway or by pipeline? Without a doubt, both modes of transportation could be improved and given more oversight. But the reality is that energy consumption is on the rise and that each method is necessary to meet market demand, although moving it by pipelines can be much cheaper and more efficient.
Read that here. And here’s what the Washington Post had to say:
So it’s pretty clear here that moving oil by pipe is a less risky proposition than moving it by rail. Both the rate of accidents and the total amount of spillage varies less for pipe transport than for rail transport. To the extent that we can shift some of that transportation burden from rails to pipes, we can drastically lower the odds of spill incidents, and potentially lower the overall volume of oil spilled as well.
Read it here.
Yes, transport by rail IS getting better, and will continue to do so in the future. But it’s still not as good, nor as efficient as transport by pipeline. And we also need to deal with ‘the today,’ not how things will be in five or ten years’ time.
And we can’t ignore our particular needs as far as South Dakota is concerned; The agriculture aspect is an argument equal with safety for shifting the transport of oil from rail cars into pipelines:
…for grain farmers and grain elevator operators in states like Minnesota and the Dakotas, it’s a near disastrous crisis that could continue to cost them tens of millions of dollars.
The reason: A lack of available railroad service—from rail cars to track lines—to ship the grain to market.
“I’m losing money and my hands are tied,” said Tim Luken, general manager and grain merchandiser at Oahe Grain, a grain elevator operator in Onida, South Dakota.
He said his grain elevator has a 5.7 million bushel capacity but can’t take any more grain as the harvest season enters a big push.
Luken said that it costs $5,000 a day to keep his operations open and because the crops are not being shipped, he can’t make room for new grains to buy or sell them.
“The farmers and grain elevator operators are at the mercy of the railroads, said Luken. “And with commodity prices falling, profits are very thin.”
Read that here.
South Dakota ag producers need rail cars. South Dakotans, and Americans, need inexpensive, affordable energy. The more we have refined, produced, and sent to market benefits us all. And the best way to accomplish that is to approve and complete Keystone XL, and to do the same for the Dakota Access pipeline.
It’s past time to secure our nation’s energy future. Let’s get the pipelines underway.