Pipelines in the Southeast US: The Backbone of America’s Energy Independence For NASEO - Southeast Region Edward O'Brien Tuesday, April 23, 2019
Technology – New drilling techniques allow more production - Fracking Big Data – Processing and storage solutions and the development of new devices to track a What Happened? wider array of reservoir, machinery and personnel performance Seismic – Lowered finding costs and allowed exploration for reserves not locatable by other means 3-D Modeling – Better able to recreate oil assets in three dimensions, allowing companies to better map underground caverns and target specific areas rich with hydrocarbons
How Much Has Changed Since Y2K? US Natural Gas Production (MMCF) US Oil Production (Billion Barrels) 33000 4 31000 3.5 29000 27000 3 25000 2.5 23000 21000 2 19000 17000 1.5 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
How Do Hydrocarbons Move? Pipelines are the safest and most efficient way to hydrocarbons US Highlights: - More than 300,000 miles of natural gas transmission pipeline - More than 2.1 million miles of distribution pipeline - More than 25 Tcf natural gas moved via pipeline in 2017 - 72,000 miles of crude pipelines - 63,000 miles of refined product pipeline - US DOT regulates pipeline safety
• Gathering – gather raw natural gas from production wells and transport it to large cross-country transmission pipelines • Transmission – transport natural gas thousands of miles from processing facilities across many parts of the continental United States • Distribution – distribute natural gas to homes and businesses through large distribution lines mains and service lines. Types of Pipelines
Product Transportation System Tank Farm Rack Pipeline Tanker Refinery Gas Station
US Pipelines
Colonial Pipeline • Transports more than 3MMBBL of gasoline, diesel, and kerosene from the US Gulf Coast to the New York/New Jersey area. • More than 5,500 miles of pipeline, including mainline and offshoots • 4 Main lines • 40-inch Houston to Greensboro, NC – 1.5 MMBBL • 36-inch Houston to Greensboro, NC – 1.2 MMBBL • 33-inch Greensboro, NC to Baltimore – 885 MBBL • 32-inch Greensboro, NC to Baltimore – 700 MBBL • Major Spurs • Atlanta to Southern Georgia • Atlanta to Tennessee • Greensboro to Raleigh • Central Virginia to Richmond, Norfolk, and Roanoke • Product moves at 5 MPH • Can make it from Houston to New York in about 20 days
Colonial Pipeline Product refined mainly in Houston, Beaumont, and the Lake Charles area. Main delivery point is the East Coast During hurricanes the whole East Coast is adversely affected Example: Hurricanes Rita, Ike, Harvey, Sandy Supply low Prices increase 20% of all liquid product delivered by pipelines utilize Colonial 70% of the liquid fuel supply to GA, SC, NC, TN, and VA
Plantation Pipeline Starts in Baton Rouge; ends in Washington DC 700,000 barrels moved per day 3,180 miles; takes 20 days Cost: $0.03/gallon to move from Baton Rouge to DC Product is from 9 refineries in Louisiana and Mississippi Product includes gasoline, diesel, kerosene, and jet fuel Focuses on delivering to Virginia and North Carolina Fewer offloading points in Southeast than Colonial
What’s Happening with Pipelines today? • By the end of 2018, EIA expects natural gas pipeline capacity into the South Central region of the United States to reach almost 19 billion cubic feet per day (Bcf/d). The region has shifted from being a source of natural gas supply to a source of growing demand, reversing the historical flows of natural gas in the Lower 48 states. Natural gas pipeline projects scheduled to come online in 2018 will bring additional supply to the Gulf Coast and support growing export markets. • Of the additional 6.4 Bcf/d of Northeast capacity planned to come online in 2018, more than 2.8 Bcf/d reaches the South Central region directly through three projects that transport natural gas through the Midwest and Southeast: Rayne Xpress, Gulf Xpress, and Atlantic Sunrise. Further west, Natural Gas Pipeline of America’s Gulf Coast Southbound Phase 1 is scheduled to enter service in October 2018. This pipeline will transport up to 0.46 Bcf/d of natural gas from Illinois into south Texas and Louisiana, where it will supply the Corpus Christi LNG export facility and pipelines into Mexico.
The LNG export facilities scheduled to come online in 2018 and 2019 represent an additional 6.1 Bcf/d of LNG export capacity, requiring infrastructure to connect them to the interstate pipeline network and deliver large volumes of natural gas to the liquefaction terminals. The United States currently has two operational LNG export facilities, which have a combined export capacity of 3.5 Bcf/d: Sabine Pass Trains 1-4 (2.8 Bcf/d) and Cove Point (0.8 Bcf/d). In addition to Train 5 at Sabine Pass, four new LNG export facilities are under construction, three of which are located in the South Central region. All three of these facilities have associated pipeline projects that are scheduled to be completed this year: • Freeport LNG will be supplied in part by the Coastal Bend Header Project (1.5 Bcf/d) • Cameron LNG will be supplied in part by Columbia Gulf Transmission’s Cameron Access Project (0.8 Bcf/d) and Tennessee Gas Pipeline’s Southwest Louisiana Supply Project (0.9 Bcf/d) • Corpus Christi LNG will be supplied in part by the Cheniere Corpus Christi Pipeline Project (2.25 Bcf/d) Tellurian received FERC approval in January to start construction on a LNG facility which is scheduled to consume 4.0 Bcf/d. They are trying to vertically integrate the process, cutting out the middleman, owning the up-, mid-, and downstream processes. LNG – What is it? And why is it important?
Security • Active Surveillance: • Ground patrol • Aerial patrol • Video surveillance • Excavation requests • Internal inspections
5 Measures DHS Recommends for Pipeline Operators Source: https://www.tsa.gov/sites/default/files/pipeline_security_guidelines.pdf
• On April 4, 2018, there was a coordinated cyberattack on a shared data network which four of the natural gas pipelines utilize, shutting it down. Cybersecurity • This attack did not interrupt service, but interrupted consumer transactions. • It has been theorized that Russia was behind the attack. • Testing the robustness of the pipeline companies’ security • Challenging Russia’s dominance of the European natural gas market with LNG • Attacks on Saudi Arabia and Ukraine have happened in the past • Pipeline Security Initiative (PSI) launched to address growing threats • Most of the focus on energy has been on the grid, not pipelines
Concerns Moving Forward • Pipelines are among the top targets of cyberterrorists • 33% of America’s top pipeline system admit to not having enough security • Too many organizations monitoring? (PHMSA, FERC, DHS, DOT, OPS + states) • Natural hazards (weather, climate change, earthquakes, floods)
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