Nation & World

Oil-pipeline business booms

An oil-field worker motions to a co-worker at a rig near Watford City, N.D.
An oil-field worker motions to a co-worker at a rig near Watford City, N.D. AP file

In a far corner of North Dakota, a few hundred miles from the proposed path of the Keystone XL pipeline, 84,000 barrels of crude oil per day recently began flowing through a new line that connects the state’s sprawling oilfields to an oil hub in Wyoming.

In West Texas, engineers activated a new pipeline that cuts diagonally across the state to deliver crude from the oil-rich Permian Basin to refineries near Houston. And in a string of towns in Kansas, Iowa and South Dakota, local government officials are scrutinizing the path of pipeline extensions that would pass nearby.

While the Keystone project awaits a final decision, such scenes are unfolding almost every week in lesser-known developments that have quietly added more than 11,600 miles of pipeline to the nation’s domestic oil network.

Overall, the network has increased by almost a quarter in the last decade. And the work dwarfs Keystone. About 3.3 million barrels per day of capacity have been added since 2012 alone — five times more oil than the Canada-to-Texas Keystone line could carry if built.

The pipeline build-out provides a little-noticed counterpoint to the fierce political battle being waged over the 1,179-mile TransCanada project, which is still in limbo seven years after it was proposed. During the long wait for Keystone, the petroleum industry has pushed relentlessly everywhere else to get oil to market more efficiently, and its adversaries have been unable to stop other major pipelines.

“There’s been a lot of growth — we’re really positive on it in general,” said Rob Desai, an equity analyst with Edward Jones who focuses on the energy industry. “The oil that’s being produced in the U.S., in many cases, it’s basically in the middle of nowhere. You need new infrastructure to get that oil to market.”

Environmental groups have fought Keystone by citing the risk of leaks and the climate-change consequences of fossil fuels. They hope to make cleaner energy options more appealing. Their success has inspired local protest groups to challenge more projects.

But those efforts, while slowing a few pipelines, have not stopped any, because the regulatory path is smoother when a pipeline does not cross an international border, as Keystone would.

In Texas, Magellan’s BridgeTex Pipeline, designed to take up to 300,000 barrels of crude per day from Colorado City to refineries in Houston, was recently completed over landowners’ protests about its path. Local officials cleared the way for the company to use the state’s eminent-domain law to condemn land for the pipeline. It came online last year.

In Minnesota, local opponents last year got state regulators to consider rerouting a 616-mile pipeline proposed by Toronto-based Enbridge around pristine lakes and forests, delaying it for at least a year.

More typical, though, was an Enbridge project to double the capacity of a 285-mile stretch of pipeline in Michigan. Groups like the Michigan Coalition Against Tar Sands fought the proposal, citing a spill in 2010 that caused serious environmental damage. But the Michigan Public Service Commission ruled the project acceptable, and the expansion went ahead.

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