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3 The Role of Freight Transportation in the Domestic Energy Revolution
Pages 34-67

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From page 34...
... This chapter describes how these three freight modes -- pipeline, railroad, and barge -- accommodated the escalating volumes of domestic crude oil, ethanol, and natural gas shipments. Background is provided on the size and scope of each mode's network as well as the specific means of conveyance used for these energy liquids and gases, from tank barge tows and tank car unit trains to buried pipes that span hundreds of miles.
From page 35...
... Recent trends in the amount of crude oil, natural gas, and NGLs transported by pipeline are then reviewed.1 Transmission Pipeline Network Crude oil and natural gas are transported by pipeline in upstream gathering and midstream transmission systems. In the case of natural gas, downstream systems of distribution pipelines are also used to deliver the commodity to local distribution companies that serve residential and commercial users.2 It is important to distinguish among these pipeline systems because their size, design, operating environments, and uses are quite different.
From page 36...
... More detail on the crude oil, natural gas, and NGL transmission pipeline systems are provided next. Crude Oil Transmission Pipelines Crude oil transmission pipelines originate at one or more inlet stations, or storage terminals, where custody of the shipment is transferred from its original owner to the pipeline operator.3 These stations can be access points for tank trucks, railroad tank cars, and tank barges, as well as upstream gathering pipelines.
From page 37...
... FIGURE 3-2 U.S. crude oil transmission pipeline network.
From page 38...
... Much like the crude oil pipeline network, however, the natural gas network is densest on the Gulf Coast, as the large gas-producing and gasconsuming states of Louisiana and Texas account for nearly 25 percent of 5 U.S. Energy Information Administration, "Regional Refinery Trends Evolve to Accommodate Increased Domestic Crude Oil Production," Today in Energy, January 15, 2015, https:// www.eia.gov/todayinenergy/detail.php?
From page 39...
... In recent years, transmission pipelines have been built to provide natural gas to regions that were once underserved, especially New York and New England.9 At one time, pipeline operators were required by regulation to own the natural gas that moved through their systems. Today the rates charged by 8 Pipeline and Hazardous Materials Safety Administration, "Pipeline Miles and Facilities 2010+," accessed September 19, 2017, https://hip.phmsa.dot.gov/ analyticsSOAP/saw.
From page 40...
... NGL Pipeline Network As explained in Chapter 2, NGLs are first recovered at natural gas– processing plants located upstream from transmission pipelines, which then transport them to fractionators to create the purity products butane, ethane, isobutane, and propane. The purity products are then carried in other transmission pipelines or by other means, such as tank trucks and railroad tank cars, to storage hubs and end users such as petrochemical plants.
From page 41...
... SOURCE: U.S. Energy Information Administration [EIA]
From page 42...
... For instance, unlike homogenous natural gas, crude oils and NGLs vary in grade and type. This variation in the characteristics of hazardous liquids presents an opportunity for pipeline operators to batch more than one commodity in a single pipeline.
From page 43...
... In the next chapter, further consideration is given to the safety features and maintenance of transmission pipelines. Trends in Pipeline Transportation of Crude Oil, Natural Gas, and NGLs Recent Trends in Traffic Pipelines have long accounted for the dominant share of long-haul crude oil movements in the United States.
From page 44...
... Unlike crude oil, all long-distance natural gas shipments move by pipeline. As a precursor to the domestic energy revolution, natural gas traffic by transmission pipeline increased nearly 20 percent between 2005 and 2010.
From page 45...
... FIGURE 3-7 U.S. interstate pipeline deliveries of dry natural gas, 2005–2015.
From page 46...
... FIGURE 3-9 U.S. pipeline shipments of crude oil between the Midwest and the Gulf Coast, 2005–2015.
From page 47...
... reports there were 38 line reversals and conversions from 1996 through 2015.16 Since 2013, most reversals have been made to accommodate the growth in natural gas traffic originating in the Marcellus and Utica regions. By comparison, most NGL traffic continues to move along the well-established NGL pipeline network in the Gulf Coast region.
From page 48...
... railroad spans the entire country from the East Coast to the West Coast, the major railroads also exchange traffic with one another. Shipments of wheat or crude oil going from North Dakota to the East Coast, for instance, require at least two railroads to complete the trip.
From page 49...
... Ethanol began moving in unit trains a few years before a rail market developed for crude oil. As discussed in Chapter 2, low ethanol production volumes and limited national demand had made unit trains uneconomical until the federal Renewable Fuel Standard (RFS)
From page 50...
... These liquids too could be transported by rail using the pressure tank cars traditionally used for hauling propane and butane, as long as the ethane content in NGL was minimal. Indeed, some unit trains were created to bring NGL shipments from the Bakken fields in North Dakota to fractionators in 3-11 FIGURE 3-11 Direct truck-to-rail transloading.
From page 51...
... for unit train service.
From page 52...
... DOT tank car specifications, see Ensuring Railroad Tank Car Safety, which describes the varying design standards appropriate for cargo characteristics. 20 The DOT-114 tank car design is also used for propane service.
From page 53...
... In 2011, the AAR Tank Car Committee required that all new tank cars used for ethanol and crude oil meet the CPC-1232 standard, which added half-height head shields, top rollover protection, thicker tank steel, and bottom skid protection to the DOT-111. However, even as CPC1232 tank cars began entering the fleet in larger numbers during 2012, ethanol and crude oil volumes had been escalating, creating more demand for the large fleet of older DOT-111s.
From page 54...
... The amount of ethanol shipped by rail since 2010 has remained largely stable after the earlier years of rapid growth.23 Geography of the Traffic The spread of crude oil and ethanol shipments through new regions of the country began shortly after 2005, when ethanol production began ramping 21 Bureau of Transportation Statistics, "Table 1-55: Crude Oil and Petroleum Products Transported in the United States by Mode." 22 U.S. Energy Information Administration, "U.S.
From page 55...
... Figure 3-14 shows how a substantial portion of the demand for ethanol is in the country's population centers, as nearly half of the ethanol produced in 2015 was transported from the Midwest to the East Coast. By and large, all of this traffic has moved in railroad tank cars over routes that accommodated much less flammable liquids traffic before 2005.
From page 56...
... SOURCE: EIA. FIGURE 3-16 Average length of haul of crude oil and ethanol rail shipments in the United States, 2005–2015.
From page 57...
... There are 3,108 counties in the contiguous United States. Figure 3-17 shows the number of counties that experienced crude oil and ethanol rail traffic each year from 2005 to 2015.
From page 58...
... As with rail, waterborne movements of crude oil grew sharply as a result of the domestic energy revolution.
From page 59...
... The system encompasses navigable channels in more than one dozen tributaries -- including the Arkansas, Illinois, Missouri, and Ohio Rivers -- that pass through 17 states. Navigable from the Gulf Coast to as far north as Chicago, Minneapolis, and Pittsburgh, the Mississippi River System
From page 60...
... The 10 locks on the Columbia River can lift barge tows as much as 110 feet. Although this system and the Mississippi River System account for most of the country's "brown water" barge traffic, small amounts of freight are shipped on a number of other regional rivers, including the Delaware, Hudson, James, and Sacramento Rivers.
From page 61...
... Because most refineries have waterside access, barges can bring crude oil supplies with existing water infrastructure, thereby precluding the need for investments in railroad offloading facilities and spur lines. In these cases, crude oil shipments originating on tank cars can be transloaded onto barges for the final leg of the journey to the refinery.
From page 62...
... Contrary to the situation with railroads, most of these tank barges are owned by the operators, as opposed to the shippers. There are more than 40 inland barge operators in the United States, but tank carriage is specialized.
From page 63...
... Trends in Waterborne Transportation of Domestic Crude Oil, Ethanol, and NGLs Recent Trends in Waterborne Traffic Because they had long been used to transport crude oil, NGLs, and ethanol, the waterborne modes were accustomed to hauling flammable liquids when the domestic energy revolution commenced a decade ago. Data for 2005 to 2014 show that even before the growth in crude oil production from hydraulic fracturing, the waterways were handling large volumes of these commodities (see Figure 3-22)
From page 64...
... Trends in waterborne crude oil traffic mirror those of railroads; however, as shown in Table 3-1, the percentage increase in rail traffic was much higher, in large part because rail carried very little crude oil before 2010. In the case of NGLs, waterborne carriers have historically hauled these commodities from the Gulf Coast to the lower Atlantic Coast.
From page 65...
... Coastal Crude Oil Inland Crude Oil
From page 66...
... Coastal Hydrocarbon & Petrol Gases, Liquefied and Gaseous Internal Hydrocarbon & Petrol Gases, Liquefied and Gaseous
From page 67...
... THE ROLE OF FREIGHT TRANSPORTATION 67 FIGURE 3-26 Ton-miles of alcohol, including ethanol, transported domestically by water by waterway type, 2005–2014.


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