Pipe In Demand for Asphalt

As stewards of the land we work on, members of the asphalt industry take seriously our responsibility to protect resources. We also take seriously the opportunities to conduct business in the most efficient manner when it comes to controlling quality and keeping costs within reason. When the arguments for and against the Keystone XL Pipeline were at their height in the mainstream news outlets, weighing the perceived good versus the perceived bad took a delicate scale. The Association of Equipment Manufacturers (AEM) President Dennis Slater issued a statement in February of this year following President Obama’s veto of the Keystone Pipeline’s construction commencement:

I was disappointed – but not surprised – to learn that President Obama has vetoed legislation that would have begun long-overdue construction of the Keystone XL Pipeline. By any measure, the Keystone Pipeline is good – good for the economy and good for the equipment manufacturing industry. It’s also the safer option for the environment, compared to alternatives.

At this point, Keystone has been relentlessly studied and scrutinized by the government and outside groups. And the evidence is in: Keystone would not pose a meaningful threat to the environment, and it would promise to create thousands of jobs in construction and manufacturing. The alternative to constructing this vital piece of U.S. energy infrastructure is the continued transportation of crude oil by rail. As we’ve seen recently in West Virginia, this is a volatile and potentially hazardous solution that further diminishes our national rail capacity.

I urge Congress to redouble its efforts to pursue construction of the Keystone Pipeline…

The relentless study and scrutiny that Slater referred to has shown that the pipeline would have carried oil 1,200 miles from Alberta to Nebraska, where it would connect to an already existing portion of Keystone to continue its journey to Texas refineries on the Gulf Coast. Because the oils coming from Canada would allow Gulf Coast refiners to purchase from Canada rather than volatile (read: not always reliable) sources in Venezuela and Saudi Arabia, sources predicted the U.S. refiners would have about the same capacity to work with.

While pundits agreed with Slater’s statement that the construction of the pipeline would have offered a boost to the U.S. economy during its construction, a review of the Dallas News’s “Keystone XL pipeline’s impact on jobs, energy, climate more muted than advertised” in its Nov. 17, 2014, online edition shows the jobs created within the U.S. borders would be temporary. We summarize the article this way: The Keystone pipeline offers no additional Canadian/domestic oil production. While it would create jobs to build the pipeline, the oil that would flow through the pipeline will find its way to refiners in the United States via other transportation methods.

The Association of Oil Pipelines points out that the United States had 60,911 miles of crude oil pipelines at the end of 2013. If the Keystone XL had been approved and built, it would have added 1,179 miles. If you include transmission pipelines that go through neighborhoods to supply individual homes, the United States has 2.5 million miles of hazardous liquid pipelines. The addition of 1,179 miles would be minimal at a 0.047 percent increase in energy pipeline.

In fact, the addition of 1,179 miles would be redundant.
Quietly, without drama, while everyone’s attention was directed toward what could or could not happen to our economy with the Keystone XL Pipeline’s future hanging in the balance, Enbridge Partners completed the acquisition of a 50 percent interest in the Seaway Crude Pipeline System. Seaway is a 670-mile pipeline including a 500-mile, 30-inch long-haul system that was reversed in 2012 to enable transportation of oil from Cushing, Okla., to Freeport, Texas, according to a company financial statement.

Seaway includes 6.8 million barrels of crude oil tankage on the Texas Gulf Coast and provided an initial capacity of 150,000 bpd. Pump station additions and modifications completed in January 2013 increased the capacity to approximately 400,000 bpd, depending on the mix of light and heavy grades of crude oil. In March 2012, Enbridge announced plans to expand the Seaway Pipeline to more than double its capacity to 850,000 bpd. In July 2014, the Seaway Pipeline Twin was mechanically complete. It was put into service in December of that year.

Included in the scope of this second line was a 65-mile, 36-inch diameter pipeline lateral from the Seaway Jones Creek facility to Enterprise Product Partners LP’s ECHO crude oil terminal in Houston, which was completed in January 2014. A third line, a 100-mile pipeline from the ECHO Terminal to the Port Arthur/Beaumont, Texas, refining center, was mechanically completed in August 2014 to provide shippers access to the region’s heavy oil refining capabilities, with line fill completed in January 2015. The new 100-mile pipeline offers incremental capacity of 750,000 bpd.

This increased infrastructure shows the demand for energy and resources in a growing population. While members of the asphalt industry work with recyclable products as often as possible and share information, technology and processes for using recycled materials efficiently, we must employ virgin materials as well. By keeping an eye on the ways and means by which those materials reach our businesses, we can make informed decisions when it comes to purchases. We take seriously our responsibility to protect resources, protect quality and protect materials costs.