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Thursday, February 14, 2019

ANALYSIS/OPINION:

When many of us think of infrastructure, roads, rail lines and airports probably come to mind. Few of us, however, consider the vital role America’s pipeline and energy infrastructure plays in our daily lives. Ideally, the pipeline network brings energy resources from refineries to and businesses. But in reality, in many places, the pipeline network is simply not developed sufficiently to meet the large and growing demand for energy.

In his State of the Union Address, President Trump called for bipartisan support for major infrastructure spending: “I know that Congress is eager to pass an infrastructure bill, and I am eager to work with you on legislation to deliver new and important infrastructure investment.” Few observers believe that anything approaching the $1.5 trillion in infrastructure spending over the next decade he called for would be approved. Fortunately, many steps could be taken right away to ease a critical logjam that is hamstringing the nation’s pipeline infrastructure.


To fully appreciate the importance of a pipeline network without the capacity to sufficiently fulfill our energy needs, think of arteries pumping the lifeblood to the heart of America. We depend on oil and natural gas for transportation and to heat and cool our homes, offices, factories, schools and hospitals. Petroleum products are contained in plastics and many other everyday products. Without access to oil and gas, the nation’s economy would soon grind to a halt. It’s also worth noting that moving oil and gas via pipelines is 4.5 times safer than transporting the same volume across the same distance by any other means, with resources flowing through pipelines without incident 99.999 percent of the time, according to a 2018 industry report.

In several U.S. areas, the need for additional pipeline infrastructure is dire. In New York, potential 2020 presidential candidate Gov. Andrew Cuomo, who has already pandered to green voting blocs by banning fracking and pledging to make the state’s electricity 100 percent carbon neutral by 2040, has stepped in to block pipeline projects that would assist in the conversion from oil fuel to cleaner-burning natural gas for winter heating. As a consequence of this “pipeline prohibition,” utility company Con Edison announced that because of an insufficient natural gas supply, it cannot accept new natural gas customers as of March 15.

In New England, where the shift from coal and fuel oil toward natural gas in electricity generation has lowered emissions, political muscle from environmentalists has also hampered pipeline infrastructure improvements. During the coldest months, the shortage in New England is reflected in consumers’ utility bills, acting as a regressive tax on lower-income residents. Ironically, environmental “leaders” obstructing domestic pipeline construction has led to Russian tankers docking in Boston in the dead of winter. Their cargo of fuel was produced in Arctic regions, risking the most sensitive ecosystems under conditions that would never meet America’s environmental standards.

The game-changing shale revolution has turned America into a leader in oil and natural gas production and a net energy exporter. In West Texas’ Permian Basin, production surged from 1 million barrels per day (BPD) seven years ago to 3.8 million BPD today. But the dramatic production increase has created challenges. Currently, the region’s pipelines have a top capacity of just 3.56 million BPD. The restricted flow means that Americans are likely paying higher energy prices than if pipelines could fully accommodate production.

Fortunately, there are some things that the government can do today to alleviate the pipeline infrastructure dilemma. By issuing an executive order, the president can stop much of the politically motivated pipeline chicanery perpetrated among elected officials and “keep it in the ground” environmentalist groups. Many of the permits approved by federal regulators are thwarted by state agencies under direct control of the governor.

Cost is a factor in pipeline construction and a 25 percent tariff on imported steel, including the specialized thick steel used in pipelines that American steelmakers choose not to manufacture doesn’t help. But if steel tariffs are deemed necessary, they shouldn’t be replaced by import quotas which would limit steel available for pipelines at any price.

Additionally, regulations should be streamlined to facilitate a timelier permit-review process without sacrificing environmental protection. If the environmentally progressive nations of Canada and Germany can do it, so can we. A good place to start would be a reform of the antiquated National Environmental Policy Act (NEPA), which is so cumbersome and inefficient that it can delay projects for years while needlessly driving up project costs.

With such robust energy resources available in America, there is no good reason to import a drop of oil or tank of natural gas from a foreign country. Yet our own bureaucratic and antiquated permitting process, coupled with the efforts of radical environmentalists, is preventing many citizens from using the cheaper, cleaner energy we have here at home. If America’s energy dominance and its benefits to our economy are to continue, steps must be taken to enhance our pipeline infrastructure. Unlike many infrastructure projects, the nation’s leaders can help without a huge outlay of tax dollars. All that is really necessary is for officials to remove barriers that impede progress.

• Craig Rucker is executive director of CFACT, the Committee For A Constructive Tomorrow.


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