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Opinion: New technology could end the debate over pipeline safety

by James Stafford of Oilprice.com

Who could have ever imagined that North America would surpass Saudi Arabia as the world’s largest producer of oil and natural gas liquids? A decade ago, that would have seemed laughable. Yet that’s exactly what has happened; and it’s not just Saudi Arabia that has been left in North America’s dust—Russia has, too.

The surge in North American oil and gas production is arguably the most important development in energy over the last decade. That’s the good news. The not so good news is that North America doesn’t have nearly enough oil and gas pipelines to accommodate its 11-million-barrel-a-day output level.

The famously unresolved proposed Keystone XL pipeline would carry oil from Canada to the US Gulf Coast, but its future is in legal and political limbo. The controversial Northern Gateway pipeline, proposed as an alternative to Keystone XL, would connect Canada’s oil sands to the Pacific Coast, allowing greater volumes of oil to be shipped to Asia, but it, too, is still on the drawing board.

Both are good examples of how pipelines – considered the safest way to move oil and gas – have become politicized and scrutinized, and not without reason. Despite their reliability, pipelines still lead to an unacceptable rate of safety mishaps. They corrode and rupture, which threatens workers and nearby communities. In 2013 alone, more than 119,000 barrels of oil were spilled in 623 incidents.

America’s existing pipelines are getting older and more prone to corrosion, and over the next five to 10 years, there will be a significant increase in the number of new pipelines. That is creating a huge opportunity for better pipeline safety technology.

Monitoring and detecting corrosion in pipelines is still a crude affair (no pun intended). Pipeline companies tend to underspend on safety, concerned only with meeting the minimum regulatory requirements.

One of the major ways pipeline operators detect corrosion is with a “pig,”—a machine that travels down the inside of a pipeline looking for problems.

Pigs are not new—the industry has long relied heavily on them—and the newest generation of pigs, known as “smart pigs,” is considered an improvement over the pigs of yesterday. Smart pigs give a read on the state of the pipeline, such as cracks, corrosion, and metal loss. Operators receive this information in a control room and can then dispatch crews to fix the problem. As of 2012, 93% of pipeline inspections were conducted using smart pigs.

But smart pigs might not be enough. Enbridge (NYSE: ENB), a major Canadian pipeline company, has spent more than $4.4 billion to upgrade pipeline safety. It is spending big bucks after one of its pipelines spilled oil into the Kalamazoo River in 2010—a corrosion breach that Enbridge’s smart pigs failed to detect ahead of time.

And that’s the problem: despite recent advances, smart pigs aren’t terribly accurate. They also require pipeline operations to shut down (you can’t pump oil through a pipeline if there is a machine in the way), and analyzing the data smart pigs gather can take some time. The Wall Street Journal ran an article last year that talked about the pitfalls of smart pigs, even as pipeline companies continue to depend heavily on them.

So alternative methods to detect trouble spots are needed. One method for detecting corrosion uses a device from outside the pipeline. A series of sensors placed on the outside of the pipeline can search for corrosion without interfering in operations.

Pipeline safety company Fox-Tek, a subsidiary of Augusta Industries (CVE: AAO), uses such a system to detect corrosion, as well as a fiber optic system to detect bends, strains and stress in pipelines.

But the real innovation in Fox-Tek’s system is its data analytics package. Companies that use smart pigs usually need to spend months doing post-inspection analysis, but Fox-Tek has developed proprietary software that does continuous and automatic analysis.

Fox-Tek’s sensors gather information and automatically send back confidential reports on everything the company needs to know—temperature, pressure, strain, rates of corrosion, etc. in the form of handy graphs, charts and diagrams. It eliminates the need for an army of people to go out and inspect pipelines and then come back to do the analysis.

The pipeline safety market is massive and growing, but one of the major hurdles for new technologies such as advanced sensors and software will be reluctance by pipeline companies to proactively invest in corrosion management and maintenance. In the past, they have largely focused on the bare minimum and viewed safety as a regulatory requirement.

However, there seems to be a sea change in the pipeline industry, particularly since operators are running into an environmental backlash. The blocking of several high-profile pipelines may have finally gotten the attention of the industry. Bringing local communities onboard and acquiring permits from regulators will require pipeline operators to demonstrate improved safety throughout their networks.

But above all, pipeline companies will see dollars saved by using cost-effective monitoring systems to reduce pipeline leaks. Enbridge has been forced to spend around $1 billion to clean up its mess in the Kalamazoo River, which was the result of a corrosion breach. It could spend a fraction of that to have better information on pipeline corrosion to prevent a growing problem from getting worse. That could reduce the frequency of future pipeline spills.

This could be a game changer in terms of how oil and gas pipelines are viewed in North America. If operators use smart software to catch small problems before they can turn into big ones, the common view of pipelines as accidents waiting to happen could be erased. Instead of seeing them as an environmental risk, the public may grow to see them as just another piece of modern infrastructure that facilitates commerce.

Source: https://oilprice.com/Energy/Energy-General/New-Technology-Could-End-The-Debate-Over-Pipeline-Safety.html

Comments

gorr

I prefer pipelines. This government is just sleeping on it. Pipelines are way safer and cheap and less noisy and don't impede car traffics at jonctions. They can construct a pipeline on my property, it will be welcome and I will receive money. I prefer a pipeline near my house than a train railroad full of petrol.

Jeffgreen54

You may be safe for awhile until things get old. Where the leak will come out varys and can be in anyone's back yard.

With global warming the issue that it is, its better to get the carbon tax in place to see if this pipeline is still warranted. To stay below 2*C, less oil, gas and coal are the direction our society needs to go in to stay in our thriving zone.

HarveyD

Improved monitoring will not fix rusty older and badly installed pipelines.

Pipelines owner-operators must improve their maintenance programs and a third party must verufy if it is done properly an in time.

The same applies to railroads and oïl tanks.

Account Deleted

People in general are hysterical about oil leaks from land based pipelines. Very few people or animals are ever hurt from those leaks and they are relatively simple to clean up. Even if you did not clean up mother nature would do it in less than 10 years through evaporation and naturally occurring microbes that eats the non-evaporated oil.

The US badly needs more oil and gas pipeline infrastructure. It typically cost 15 USD to ship a barrel of oil a 1000 miles by rail and only 5 USD to do the same by pipes. North Dakota could produce 2 or even 3 million barrels per day if there was enough pipeline out of the state but there is not and it will take many years to get the necessary approvals to build these pipelines. I also think the rail system is beginning to reach its maximum capacity in ND and thereby greatly slowing down further oil production increases in ND.
The oil industry is reacting by ramping up production in areas that does not have serious problems in transporting the oil. This is why you see an explosion of production in the Texas Permian oil shale. It is one of the least productive oil shales in the US but there are no serious problem getting the oil to the nearby oil refineries so this is where most money goes right now plus Eagle Ford.

For the productivity of oil shales in the US see
http://www.eia.gov/petroleum/drilling/#tabs-summary-1


For production and production growth see
http://www.eia.gov/petroleum/drilling/#tabs-summary-2

I expect that the US will become a net oil exporter before 2020 and that Texas will be the big winner in this oil boom that has been unleashed by the new shale fracking technology. Texas is winning because they can solve the transportation issues faster than other shale areas in the US.

HarveyD

@Henrik:

Please check Wikipédia for an incomplete list of pipeline accidents by country for the last 50 years. You will be surprised how unsafe and deadly they are.

In the last 20 years, USA had 745 serious pipeline accidents.

In 2010 to 2013 time frame, USA had 1,400 pipelines spills and accidents. That's about one every day.

One may wonder if they are much safer than rails and why those pipelines are having more and more spills, accidents and explosions?

Is it due to age or poor maintenance or both?

gorr

I said to construct pipelines so gasoline will be cheaper. Also sell your big suv for smaller cars so less oil needed. When im on the road I saw about 50% of the vehicles been suv or truck like big fatty pick ups, that's awful bad and also these chaps are doing speeding of 75 mph..

SJC

The pipes in the southern half of Keystone XL were laid on top of rocks which weakens the pipe. When a pipe ruptures it can release as much a one MILLION gallons of tar sands bitumen with propane into the land, rivers, lakes and aquifers. Monitoring will not prevent this, there is too much in the pipeline between valves under pressure. The rupture on the Yellowstone river took hours to shut off, the control was in Houston.

HarveyD

Many more automatic shut off valves may be required together with improved pipelines construction standards and more monitoring and maintenance.

Increased production from the Texas Eagle Ford 100,000,000,000 (100 B) barrel shale oil deposits will negate the construction of the Keystone XL pipeline, at least for the next 30+ years.

This is the time to invest in Texas oil fields again.

SJC

Huge pipeline valves cost a lot, the controls cost a lot, oil companies and pipeline companies want to maximize profits by minimizing regulations. We have seen this story many times before.

The number of cars will double in the next 30 years, we can not produce even 100 million barrels per day, how are we suppose to produce 200 million? The answer is we will NOT, which leads to more oil wars, more economic collapses and a reduced standard of living.

HarveyD

@SJC:

USA will soon become the number one oil producer again at 12+ million barrels/day. With Canada's 6+ mbd plus more and more efficient vehicles, we may become net exporters by 2020 or so for the next 30+years.

fred

OR???Canada could just refine its crappy, abrasive crude up there into a finished product...Youd think this would be a no-brainer. Unless getting rid of the sand would be uneconomical. Why else would one attempt to pipe it 2500 miles? Because LA or TX need MORE sand?

O TOLMON NIKA

fred,

The rub is, it has nothing to do with pipeline safety and all to do with the religion of global warming.

I would love to see TransCanada refine the product to clean gasoline and diesel, and then re-apply for the pipeline permit. I would love it just to see the whackadoodle opposition. We would hear the same insane "safety" concerns, etc.

Personally, if the pipeline is rejected by our *cough* state dept (obama), I'd love to see a small stretch of railroad built between the USA and Canada. A pipeline ends on the Canadian side, pumps oil into a train, the train travels 1000m into the USA where the oil is put back into a pipeline and shipped. Now that would be funny (and a sad example of extremist liberalism).

SJC

Harvey,

If you think the world can produce much more than 100 million barrels of oil per day, you are in the minority. The U.S. still imports almost HALF of our oil, it is not clear that fracked fields will continue to produce for 30 years.

O TOLMON NIKA

SJC,

You are right in that we (the USA) still import a large portion of our oil, however the goal should be to reduce our imports, and limit our imports only to trusted friends (ie Canada). Unfortunately, we have a political situation that is ardently opposed to rational energy policies.

What can I say, elections have consequences.

SJC

I thought you were going to leave politics at the door.

O TOLMON NIKA

SJC,

The Keystone pipeline has been delayed due to politics and not science.

That's why "decisions" about the pipeline are constantly delayed until AFTER the next election cycle.

Political shenanigans at its best....

Brotherkenny4

I love the fervent nature of those enthralled by a minor and temporary repreive with regards to our economy killing addiction to the remnants of fossil energy. People are absolutely giddy. I have said this before. The fracked well production and tar sands have guarenteed high prices. If the price per barrel of oil goes lower then these production techniques become unprofitable. World demand now depends in part on high cost production. This dependence will continue to increase. So while we may never run out of oil, it will always be more expensive than last year. Expect a steady and predictable climb in price unless our government gets the tax payers to subsidize oil production in some new and devious way. You know, not just fighting wars for oil companies, but an oil production tax or some sick thing like that. You know the same crafty fake free market junk our industrial master tend to pay the politicians to do.

O TOLMON NIKA

Brotherkenny4,

Obviously high energy prices are a detriment to western economies, however the flip-side is that when oil is very expensive (above $60ish/barrel), it promotes north American oil production that would otherwise be un-economical.

Time will tell what the outcome of such prices are, however given the choice between $40 oil from Saudi Arabia or $90 oil from North American that supports a large number of jobs......... quite the debate...

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