Pipelines – The Case for Producing Fuels Locally

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    Pipelines – The Case for Producing Fuels Locally

    Pipelines carry fuels to distant markets easily and can be important whenever we are forced to move Fossil Fuels like Crude Oil from source to destination. But pipelines create as many and more problems as they solve when spending on pipelines prevents spending on localized clean fuel production. As pipelines typically only carry one type of material, crude oil or natural gas are the most common pipelines; Crude can then be refined into its ten component fuels at destination.

    How important are these expensive, disruptive investments when we can create fuel exactly where it is needed and as demand requires it? One-third of all of our energy cost goes to transporting food & energy so producing fuel locally is always preferable – until cheap and abundant energy is widely available.

    Alternatives to Pipelines

    Pipelines are not always cheaper. A Business Case is important when making this decision because barrels (# of rail cars) to destinations like the gulf coast, east and west coast, need to be understood in order to support a decision. In the end, fossil fuel is polluting – so clean fuels produced locally save transportation costs that cannot be ignored (fully one-third of all of our energy is used to transport food and energy). Alternatives to pipelines discussed above include:

    • Driverless-trains reduce rail costs, permit refining in needy communities at any point between Oil Fields and Markets, and railways can be used for multi-purposes and financial benefit.
    • Locally manufactured clean Fischer-Tropsch Crude Oil – this option is available and manufactured today in Germany by Audi. Click here to see why Diesel fuels and vehicles are preferred in this solution.
    • Hydrogen – requires new vehicles North America-wide – but hydrogen can be manufactured right at the gas station.
    • Battery Cars – not yet ready but hopefully within the next ten years.

    PROs and CONs of Pipelines

    For Pipelines – PROs:

    • Shipping costs are lower A to Z – $3 to $11 per barrel pipeline; $8 to $21 per barrel rail – for transport of fossil fuels after the price of


    Hussain, 2015

    Against Pipelines – CONs:

    • Expensive to build and environmentally disruptive; railways can be built robotically now too. See http://www.popularmechanics.com/technology/infrastructure/a22018/robot-railroad-track/
    • Job mobility forces Income Guarantee programs; when jobs are permitted to move, they can move to clean-fuel companies too – which is a PRO in several ways. See The Business Case for Empathy.
    • Low-profit – pipelines carry unprocessed, raw material to remote markets where jobs and high-profits await refiners there.
    • High-profit – Truck or train hauling of locally refined fuels (gasoline, diesel, kerosene, aviation fuel, bitumen, etc.) creates good jobs, higher profit refined fuel products, at any point from Oil Field to final destination – locally.
    • Self-driving trucks and trains promise to reduced costs further leaving refineries profitable and able to employ easily.
    • Pipeline ties our investment and focus into status-quo fossil fuel businesses and technology – see alternative above
    • Rail forces us to build smart transportation networks that integrate in an overall Automation Strategy to Connect Smart Factories.

    Rail vs Pipeline, the Environment, and Safety

    Pipeline spills dwarf rail spills with the largest rail spill ever equaling just eight cars in 2013. In the following graph we see that pipelines spilled 211 Rail Cars, or 148,235 barrels, of crude from 2010 to 2016 in Canada.



    Look for Transition Economics at Amazon November 2016


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