Tags: obama | red | tape | oil | pipeline | shortage

Obama Red Tape Creating Huge Oil Pipeline Shortage

Image: Obama Red Tape Creating Huge Oil Pipeline Shortage An oil well site near Tioga, N.D.

By Audrey Hudson   |  

The rapid growth of U.S. domestic oil production in recent years has surpassed pipeline capacity, forcing the biggest increase in truck, train, and barge transport from wells to refineries in more than 32 years.

The heavy traffic is putting a strain on an unprepared infrastructure and has regulators scrambling to put new railway safety rules in place, while $40 billion in new pipeline construction awaits approval or completion, The Wall Street Journal reported Monday.

"We are in effect re-plumbing the country," says Curt Anastasio, chief executive of NuStar Energy, a pipeline company in San Antonio, Texas.

The traffic is expected to decline significantly once pipeline construction is completed. But some projects are tied up by regulatory red tape, or have become the target of environmental groups.

The Keystone XL pipeline that would transport Canadian oil to Gulf Coast refineries, for example, has been delayed for five years while the Obama administration determines whether the project will damage the environment. Until the XL pipeline is approved and constructed, the crude oil it would carry is being transported through the United States by rail.

Transportation by truck has grown 38 percent in just one year, while 53 percent of crude is now being moved by barge or ship, according to the U.S. Energy Information Administration.

In the boom area of North Dakota, trains are moving 69 percent of the 800,000 barrels of crude oil a day produced there, and the American Association of Railroads predicts that trains will carry nearly 400,000 carloads of crude this year across the United States.


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The rapid growth of U.S. domestic oil production in recent years has surpassed pipeline capacity, forcing the biggest increase in truck, train, and barge transport from wells to refineries in more than 32 years.
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