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POLL FINDINGS: North American refiners prefer pipelines for crude shipments

09.09.2013  |  Ben DuBose,  Hydrocarbon Processing, 

Keywords: [poll findings] [pipeline] [Keystone XL] [rail] [barge] [logistics] [crude oil]

While Keystone XL remains in limbo, the concept behind it is very much alive.

Roughly 70% of industry respondents predict that pipelines will be the most popular crude oil transportation network in coming years for North American refiners, according to a recent Hydrocarbon Processing industry poll with hundreds of votes cast.

That percentage dwarfed secondary logistics options such as rail (16%) and barge (13%), which are viewed by many in the industry as less efficient and more expensive on a proportional basis.

Pipeline expansions in works. With the proposed Keystone XL expansion still uncertain, other pipeline companies are filling the gap. Rival Canadian company Enbridge is expanding its existing pipes to carry Canadian crudes south to the US Gulf, and it doesn't need federal permission because it is using existing pipeline rights of way.

Likewise, in the US, several new projects are being developed. In September, Kinder Morgan and Valero started up the 141-mile, 16-inch diameter Parkway pipeline, which can transport refined products from refineries in Norco, Louisiana, to an existing petroleum transportation hub in Collins, Mississippi.

Rail safety a question. Another factor is that despite the environmental concerns surrounding Keystone XL, the most devastating logistics accident of 2013 occurred via rail. The July 6 derailment and explosion of a runaway crude-carrying train in Quebec was responsible for the death of at least 47 people, thereby threatening to ratchet up scrutiny of rising crude-by-rail shipments on both sides of the US-Canada border. Canadian regulators blamed the Quebec incident on insufficient brake force applied by the operator.

Indeed, less than a month later, the US Federal Railroad Administration said it began asking shipping companies to supply testing data they use to classify their crude-oil shipments, saying it was concerned that some shipments were being transported in tank cars that aren't safe enough.

As a result, with both pipelines and rail under intense regulatory scrutiny, the tiebreaker seems to be efficiency – which presently is in favor of pipelines, according to poll respondents.

To see more details on this poll as well as access prior  Hydrocarbon Processing   poll results,  click here .

(Editor’s note: Polls are where we gather industry sentiment on significant issues of the day. Visit the HP home page to  weigh in on our latest poll  on potential North American petrochemical exports.)

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