Pipelines Still Playing Catch-up to Shale Boom

The shale revolution took everyone by surprise, both here in the United States and elsewhere in the world. No one expected hydraulic fracturing and horizontal well drilling to make the impact on American oil production that they have over the past ten years, but as welcome as this new flood of hydrocarbons has been, it’s also caused some problems. Chief among them: our pipeline infrastructure—the most extensive in the world—still isn’t robust enough to deal with these new supplies. Reuters reports:

Pipeline construction often lags production booms by years – if proposed lines are built at all – because of opposition from environmentalists and landowners, topographic obstacles, and permitting and construction challenges. That forces drillers to limit output or ship oil domestically, usually by rail – which is more costly and arguably less safe.

The crimped production, in turn, costs the economy jobs, keeps prices higher for consumers and stymies the nation’s long-held geopolitical goal of reducing dependence on foreign oil.

Shale was a surprise, but that’s not the only reason why our pipelines are still playing catch up. Consider that in many cases shale formations have not overlapped conventional oil fields already in operation. That’s especially true in the Dakotas, where the Bakken shale has reawakened an industry that had been lying dormant there for decades. Then too there’s the relatively quick nature of shale drilling: unlike conventional oil projects, shale operations are smaller scale and can begin and end on a much shorter time scale. That agility has helped producers adapt to the new low price environment, but it’s also made the process of giving those producers pipeline access a lot more difficult.

President Obama was quite fracking friendly, so there’s not all that much that President Trump can do to top his predecessor in terms of further encouraging the shale boom. But our pipeline network is still under-built, and fixing that problem wouldn’t just strengthen U.S. energy security, it could also dovetail nicely with some of Trump’s infrastructure goals.

The post Pipelines Still Playing Catch-up to Shale Boom appeared first on The American Interest.