Saturday Video: The Strategic Importance of Pipelines

What with the cyber attack on the Colonial Pipeline, see here:

A major oil pipeline that carries more than 100 million gallons of fuel from Houston to Linden, N.J., each day is shut down after the company that owns it was hit with a cyberattack.

Colonial Pipeline, which says it delivers about 45 percent of the East Coast’s fuel supply, shut down its entire pipeline network and some of its IT systems Friday.

It seems like a good idea to look at how pipelines serve as a strategic asset>

Not the first time this has been discussed at Eaglespeak - Sunday Ship History: Big Inch and Little Big Inch from about 14 years ago:

As the U-boats struck, supplies to the refineries dwindled, leading to a crisis of supply:

Tankers continued to be the number one target of the U-boats, and shortfalls in oil and oil product deliveries were beginning to seriously worry the oil industry. Oil companies were afraid they would be unable to deliver enough heating and fuel oil for the northeastern states.

In my view, the investigation and prosecution of whoever hacked Colonial needs to be pursued as a national security issue, a major cyber crime at least, and, if a foreign country is found to be involved, something akin to an act of war. If the latter case is true, serious sanctions need to be imposed. As far as Colonial goes, it's good they spotted the glitch, but their cyber game needs to be much better. Let this be a lesson to all our utilities.

Freezing Yankees in the Dark: "Natural gas bills are going up, and not just because it's cold" .... Well, sorta.

Had to laugh at this report from American Public Radio's Marketplace which I heard on the way home tonight:  Natural gas bills are going up, and not just because it's cold

The reason for that crazy 2,000 percent jump is that even though there is lots of natural gas, there isn't the infrastructure to move it quickly enough when demand spikes.

"Because the pipeline capacity to get it into the Northeast isn't that large," Borenstein says. "Likewise, that can happen in the Midwest."

But even with improved pipeline capacity, natural gas prices are still susceptible to price spikes.

"The reality is natural gas is expensive to store," says Michael Levi, a senior fellow for energy and the environment at the Council on Foreign Relations. And when large quantities of fuel can't be stored, it's difficult to smooth out prices over a long period of time.

You can listen to the report here.

Hidden in that "not just because it's cold" part of the headline is the the reason that there has been a demand spike. Which is: Demand spiked because it's cold. Duh.

And then, when demand spikes, the Northeast lacks pipeline capacity and storage capacity to handle the increased demand. Why? Because while "there is lots of natural gas" - it is not, apparently, in Yankeeland.

It also seems to lack alternatives since the use of coal has had the kibosh put on it. The switch from coal has cause industry to switch to natural gas (or in the case of some industries like gun manufacturers to move south*). That switch also increases local demand for a good that needs to be imported through an limited supply pipe. From place like Texas, Oklahoma, and other fly-over country.

Lacking alternatives . . . well, you can freeze or pay.

It seems to me that logically you could write a similar story about how there is a spike in the price for water in Arizona and it's not just because it's hot there but because there's no infrastructure to move water from the Great Lakes where there is lots of water to the desert. Trust me, if the price gets high enough, there will be pipelines for water built.

On the other hand, I guess up North they don't need to have expensive air conditioning in the spring and summer like we in the South and Southwest do, so they've got that going for them.

Come to think of it, though, I don't remember ever hearing or reading an article about how "air conditioning bills are going up, and not just because it's hot" written about the South. If you find one, let me know . . .

May I suggest to our Northern friends more nuclear power plants for electric heat?

Or perhaps using those expensive LNG terminals? Make it worth LNG shipper's efforts to ship in gas by letting those prices rise.




*And, yes, those moves occur for other reasons, too.

Energy News: "No major environmental impact from Keystone XL, DOS says"

Well, if we really, really want to work to free ourselves from the many problems of the Persian/Arabian Gulf and a long sea line of communication carrying crude oil through often troubled waters, then this ought to be good news: "No major environmental impact from Keystone XL, DOS says", as set out in the Oil and Gas Journal,

“This final review puts to rest any credible concerns about the pipeline’s potential negative impact on the environment,” American Petroleum Institute Pres. Jack N. Gerard said. “This long-awaited project should now be swiftly approved. It’s time to put thousands of Americans to work.”

“The State Department has once again found nothing in its environmental analysis that would prevent the Keystone XL pipeline from moving forward,” US Chamber of Commerce Pres. Thomas J. Donohue declared. “It’s time for the administration to stop playing politics with a project that will create good-paying American jobs, improve our energy security, and strengthen relations with our closest ally, Canada.”

Obama vowed to approve Keystone XL if it was proven to be environmentally safe, according to American Fuel and Petrochemicals Manufacturers Pres. Charles T. Drevna. “Today’s release of the pipeline’s supplemental EIS provides the irrefutable evidence sought by the president, and he should waste no further time in delivering on his promise,” he said.

Of course, there are the nay-sayers:

Environmental organizations and other opponents immediately dismissed the supplemental EIS’s findings as corrupted by oil industry influence and seriously flawed.

“[DOS’s] environmental review of the Keystone XL pipeline is a farce,” declared Friends of the Earth Pres. Erich Pica. “Since the beginning of the assessment, the oil industry has had a direct pipeline into the agency. Perhaps most frustrating is the apparent collusion between [DOS], the oil industry, and the Canadian government.”

“Even though [DOS] continues to downplay clear evidence that the Keystone XL pipeline would lead to tar sands expansion and significantly worsen carbon pollution, it has, for the first time, acknowledged that the proposed project could accelerate climate change,” said Susan Casey-Lefkowitz, international program director at the Natural Resources Defense Council. “President Obama now has all the information he needs to reject the pipeline. This is absolutely not in our national interest.”

Sierra Club Executive Director Michael Brune, meanwhile, said, “The president has two choices before him: fighting climate disruption, or promoting an energy policy that includes the expansion of dirty fossil fuels like tar sands. The Keystone XL tar sands pipeline fails the basic climate test, and it’s not in the interest of the American people. The president should reject the tar sands pipeline once and for all.”

So, months of study and delays which, once again, find "no major environmental impact" are a "farce" because they don't coincide with the agendas of FOE and the Sierra Club.

Noteworthy, too, is that no adverse decision to their positions can be simply characterized as "in error" but always must be demonized. That's a very old debating trick.

And a tiresome one.

UPDATE: About those oil ocean shipping routes ("sea lines of communication"), here's a nice graphic:

Source: U.S. Government Accountability Office

Note: Circles represent millions of barrels per day transported through each chokepoint. Arrows represent common petroleum maritime routes.