How Does Building New Oil Pipelines Affect The Price Of Heating Oil?

Industrial & Manufacturing Blog

There has been much controversy about the proposed construction of new pipelines to bring oil from the newly accessible deposits in the Northern regions of the United States and Canada to the refineries of the Southern and Eastern regions.

While the construction is delayed, oil form these regions must be shipped by rail, which is much slower and more expensive than transporting the oil by pipeline. If proposed pipelines are built, the cost of transporting oil will be reduced, resulting in lower prices for heating oil.

The construction of two major pipelines, the Keystone XL and the Dakota Access, have been successfully curtailed by the Obama administration because of environmental concerns. However, President Trump recently signed orders to revive these projects, so they may be built over the objection of those who believe they are harmful and disrespectful of the people over whose lands they will travel.

The case against new pipelines

Both of the previously mentioned proposed pipelines have received virulent opposition from environmentalists and some Native American groups who are worried about water contamination and proximity to sacred lands.

Environmentalists are concerned both about possible breaches of the pipelines and the propagation in the use of fossil fuels that the pipelines will offer. The same environmentalists are vehemently against hydraulic fracturing, or "fracking",  because it has created an abundance of domestic oil, lowering prices, and subsequently increasing the use of oil fuels. 

They are also concerned about the use of chemicals and water that are pumped with great force into shale rock deposits to reach huge reserves of oil and natural gas beneath the shale. Pipelines allow this procedure to be more profitable, resulting in lower prices for heating oil and gasoline.

The case for new pipelines

Decreases in the costs of heating oil and gasoline because of pipeline transport may appear shortsighted to environmentalists, but can be a blessing to those with limited incomes, who need to heat their homes and get to work.

Pipeline builders have offered to reroute pipelines that were originally planned to travel over sites that are sacred to Native American groups. If the pipelines are eventually built, mediation  and/or litigation will likely be necessary to finalize an agreement that can satisfy all parties involved.

Although the possibilities exist for sabotage or a technical failure that could cause a pipeline breach and oil spill, transporting fracked oil by rail poses an even greater threat to both inhabitants and the surrounding environment.

Fracked oil is naturally mixed with gas and other substances, which are removed through refining. This mixture can turn a rail tanker into a potential bomb if a derailment occurs. This has already happened in a small town in Canada, when several tank cars derailed and destroyed the town.

Until the United States can realistically move away from fossil fuels with a viable alternative that the average American can afford, pipelines, built with safety precautions and sensitivity, are the best choice for safe and efficient transport of new sources of oil.

31 January 2017