The interdependent relationship between the agriculture & energy industries

The High Plains Journal recently published a letter by Kansas resident Cole Morehead on the critical dynamic between the agriculture and energy industries. The letter emphasizes that these two industries heavily rely on one another – farms and ranches need oil and natural gas to operate efficiently, while energy developers rely on cooperation from rural landowners for pipeline routing and construction. The author contends these industries should work together for mutual benefit, writing:

In rural America, prosperity is based on crop and livestock production, which relies on products derived from pipeline-shipped oil and gas. What’s good for the farmer or rancher should be good for the pipeline operator, and vice versa. Instead of standing on opposite sides of the fence screaming at the other side, why don’t we all jump on the fence and have a conversation about aligning our interests?

The letter also assures readers that pipelines are the safest, cleanest means of transportation, citing data that finds a “barrel of oil shipped by pipeline safely reaches its destination 99.999 percent of the time.” The author writes:

Yet, the public’s perception of pipelines is poor, driven by misconceptions, negative press and politics. It isn’t the years of accident-free operations on thousands of miles of pipelines across the country that make headlines, but the one day when something goes wrong on one length of pipe.

From start to finish, the pipeline process is carefully planned and implemented. Pipeline operators “go above and beyond” to ensure systems are safe, including 24/7 monitoring and regular maintenance. In addition, workers are trained in land conservation, prioritize thorough, site restoration, and follow all environmental regulations.

GAIN looks forward to further investment and promotion of energy infrastructure across the country, and continuing to foster the important relationship between the energy and agriculture industries. As Morehead concludes:

Energy, farming and ranching are essential to the lives of every U.S. citizen, and to people around the world who count on our energy and agricultural exports. Let’s come together to strengthen the partnership between pipelines and rural landowners and maintain America’s position as the global leader in agriculture as well as oil and gas.

Dakota Access expanding as need for energy infrastructure in the Bakken continues to grow

Bismarck Tribune recently reported that “Energy Transfer Partners has announced it is seeking commitments from shippers to transport more Bakken crude to the Gulf Coast.” According to a company spokesperson, the proposed expansion would increase the pipeline’s capacity from about 500,000 barrels per day (bpd) to 570,000 bpd. The article writes that the expansion would “require minimal asset modifications within the existing pipeline right-of-way.”

Industry expert Justin Kringstad told the Tribune that pipeline capacity can be increased by a variety of factors, including adding a chemical to the oil that makes it flow easier, or adding additional horsepower or pumping stations. Kringstad contends that North Dakota producers have benefited and saved money on shipping costs as a result of DAPL, stating:

“Every expansion at this point is going to assist in keeping the market strong in North Dakota. But long-term, it will take some substantial new investment to continue to keep North Dakota oil connected to new markets.”

Energy Transfer’s recent announcement on the Dakota Access expansion comes at a critical juncture as North Dakota’s Bakken region is currently experiencing a major comeback, as recently reported by the Wall Street Journal. Many industry experts believed the region to have reached its peak – that is – until recent spikes in crude production. The Journal writes:

Several factors account for the Bakken’s recent rise, Mr. Prudencio said. U.S. oil futures surpassing $70 a barrel have spurred more drilling across the country. Additionally, cheaper acreage and improved crude transportation have made the area more attractive than some other major shale fields.

Namely, the Dakota Access Pipeline has made it cheaper to send crude to other parts of the country. Previously, much of the oil produced was transported by rail.

The United States is facing a major pipeline shortage around the country. The need for stronger infrastructure extends from the vast oil fields of the Bakken and Permian to the small New England towns preparing for frigid winter temperatures. GAIN is hopeful regarding the proposed DAPL expansion, and looks forward to continuing the fight to Grow America’s Infrastructure Now.

Rover Pipeline benefiting local communities along route

This past weekend, The Times-Reporter, of New Philadelphia, Ohio, highlighted a local school district’s plans for tax revenue it is expected to collect from Rover Pipeline this year. The Tuscarawas Valley Local School district recently held a public meeting to share information and field questions regarding the district’s vision to capitalize utility tax revenue of the Rover Pipeline.

The school district is set to receive approximately $950,000 annually as a result of utility tax revenue from Rover. The school district is not proposing a bond issue or tax increase of any kind this year, largely due to the significant revenue from Rover. The district plans to leverage the utility tax revenue generated by the pipeline to establish a permanent improvement fund, which will in part be used to create a “safe, state of the art pre-Kindergarten-12 facilities for all students on the Tusky Valley Road Campus.” In addition to new facilities, the district plans to use the funds to renovate an existing middle school, the stadium, and transform the existing high school to serve as a community center and house central offices.

Communities along the Rover Pipeline, and other pipelines across the country, are benefiting in similar ways. Tax revenue from energy infrastructure projects can be used by local municipalities to improve educational facilities, public infrastructure such as roadways and bridges, and even purchase new equipment or training for first responders. From providing much-needed tax dollars to communities, to safely and reliably transporting energy products to market, it is clear US officials must continue to welcome investment in our critical energy infrastructure.

US needs safe, reliable energy infrastructure to deliver to consumers

Forbes recently published a comprehensive overview by industry expert David Blackmon highlighting ongoing pipeline construction across the country and extreme levels of opposition these important projects continue to face. According to Blackmon, although these protests are not receiving the national media attention that those of Dakota Access experienced, they are still disrupting the safe completion of a number of critical pipelines.

Blackmon goes into detail on pipeline challenges from the East Coast, to the Dakotas, to the bayous of Louisiana. Tactics have escalated against specific projects in some areas, while are seemingly counterintuitive in others. In Minnesota, for example, protesters of Enbridge’s Line 3 blocked a bridge for several hours. However, there is no Line 3-related construction going on anywhere in the state. In Louisiana, landowners filed a suit to halt the construction of Bayou Bridge, questioning the developer’s ability to build on private land under the state’s expropriation law. These are just a couple instances of the mounting hurdles much-needed pipelines are facing. Blackmon emphasizes the need for the continued expansion of modern energy infrastructure, stating:

All of this is so counterproductive and frankly, ill-advised. These pipelines are without question the safest, most efficient and most environmentally-friendly way to move oil and natural gas to the markets they serve, and the demand for the products they transport is strong and growing stronger. While all of these pipelines will ultimately end up being completed, time is money in the midstream business, and these delays and work stoppages only serve to raise the cost of energy for everyone, while doing little if anything to protect the environment.

Simply put, the reality is the US needs an extensive, and reliable, network of pipelines in order to safely and efficiently deliver energy products to consumer markets around the country. Many environmental activists have continued to ignore the facts, including the impressive safety ratings of pipelines and considering the riskier alternative transport options. Having been unsuccessful in their efforts to “keep it in the ground,” activists have directed their efforts toward preventing the means of safely transporting it to market.

GAIN echoes Blackmon’s assertion that the US needs strong energy infrastructure. It is time for US officials to promote investment in our critical infrastructure and ensure safe and timely completion of our pipelines.

Trump administration emphasizes need for energy infrastructure

The Hill recently reported President Trump is expected to make a “renewed push” to permit and build oil and natural gas pipelines next year, according to his top economic adviser Larry Kudlow. The article writes, “the need for pipeline is especially strong in the natural gas industry, where drillers, thanks to the boom in fracking and horizontal drilling, are producing more gas than there is pipeline capacity to carry.”

The lack of pipelines is so great in certain regions that drillers have resorted to “flaring,” or burning, large amounts of excess natural gas. To complicate the bottleneck even more, ongoing pipeline projects, from Louisiana to North Dakota, from Ohio to Texas, have faced a number of hurdles. These hurdles include vigilante activists, legal challenges, and strict state regulations.

The US government must promote investment in our critical energy infrastructure and ensure regulatory certainty. Strong energy infrastructure is key to delivering reliable, affordable energy products to consumers across the country. Pipelines have also played a critical role in the US’ record-amount of oil and natural gas exports. GAIN recognizes the President’s prioritization of strengthening American energy and the continued need for modern energy infrastructure.

New trade deal promotes American energy

The Daily Caller recently published an article on President Trump’s new trade agreement with Canada and Mexico and its provisions that “free up the energy industry to continue expanding U.S. Natural gas exports into Mexico without worrying about tariffs.” The pact, known as the U.S., Mexico, and Canada Agreement (USMCA), largely focuses on the export of automobiles, but the article notes that it “does allow for continued market access for U.S. gas and investments in Canada and Mexico, which is highly dependent on U.S. natural gas exports.”

American energy has the potential to benefit greatly from the USMCA. Considering the oil and gas boom, from the Marcellus to the Permian, and with continued investments in our critical energy infrastructure, the U.S. is in a strong position to provide reliable energy to not only American consumers, but also to our neighbors in Canada and Mexico. The Daily Caller reports that Mexico accounts for the bulk of U.S. gas exports, with 90 percent coming from pipelines and the rest from LNG. In fact, “the country’s energy industry expects to increase its natural gas use for electric power generation by about 50 percent over the next five years.” The Daily Caller expands on the important role of energy infrastructure in regards to transporting product to Canada and Mexico, writing:

Pipelines such as Rover and Nexus Gas Transmission are being built to shuttle gas from the Marcellus and Utica supply regions in Ohio, Pennsylvania, and West Virginia into areas on the Gulf coast and eastern Canada. USMCA is not expected to derail any future exports or pipeline constructions between the countries.

The positive influence of U.S. energy continues to grow as we reach record production levels, as well as modernize and expand our critical energy infrastructure network. GAIN looks forward to American industry continuing to provide reliable, affordable energy to our allies around the world, starting with Canada and Mexico.

Pipeline 101: Remediation

The last installment of our Pipeline 101 series focuses on the important process of remediation. Once construction is complete, environmental experts remediate the land that was affected by the construction process. Once the pipeline begins operating, it is monitored around the clock, every day of the year. The operator has the ability to monitor conditions for any potential issues, pinpointing the problem, and the technology to shut down the pipeline remotely within minutes. To learn more about remediation, pipeline monitoring, and the completion of the process, watch this short video!


GAIN Sponsors Washington Examiner Event on Manufacturing, Economic Development, and Modern Infrastructure

On Thursday, September 27th, the GAIN Coalition sponsored a Washington Examiner event hosted at Youngstown State University in Youngstown, Ohio. The event highlighted the region’s important and growing role as a hub of innovative manufacturing, infrastructure, economic development, and educational opportunities. Multiple panel discussions featured industry experts as well as local and organizational leaders. An important theme of the event was concisely stated by panelist and former Ohio State Senator Capri Cafaro in her statement: “Infrastructure is a key element in economic development.”

GAIN Strategic Advisor Brigham McCown participated in one of the panels, emphasizing the need for and critical role of modern infrastructure development in the region and across the country. McCown spoke about infrastructure funding, from recent highway grants the state received, to the importance of public-private partnerships to strengthen pipeline networks. Specifically, he highlighted the booming Marcellus and Utica shale formations, and their contributions to the energy industry and role in bringing natural gas prices to the lowest they have been in decades. McCown stresses that this is largely because we “not only have the natural gas [in the region], but we also have the infrastructure to move it from point A to point B.”

For example, the Rover Pipeline, which passes through Michigan, Ohio, and West Virginia, has consisted of $1.3 billion in procurement and has produced more than $147 million in tax revenue to the state and local municipalities. This revenue can then in turn be utilized to fund schools, road and bridge projects, police and fire departments, and other important infrastructure projects that benefit residents.

The positive impact of the U.S. shale boom can be observed across the board. As underlined by Judson Wallace, President of Vallourec Star, a Youngstown-based seamless pipe manufacturer that serves the oil and gas industry, the United States’ decreasing reliance on foreign oil is helping manufacturing businesses throughout the region. This trend is not unique to the region though, as it is undoubtedly benefiting industry across the country. A strong American energy market starts with investment in our critical infrastructure and the ability to safely and efficiently transport product to consumer markets. A reliable, effective energy industry will continue to foster economic growth, job creation, and market stability.

To view a full video of the event, click here.

Energy Infrastructure Key to Accessible, Affordable Energy

West Virginia’s State Journal recently reported on the important role pipelines play in the “big picture” of the state’s energy industry. Anne Blankenship, executive director of the West Virginia Oil and Natural Gas Association emphasizes the benefits of infrastructure, including moving product to market safely, enhancing downstream industries, and making West Virginia more economically stable. The State Journal writes:

“This is truly an exciting time for this state and region, as much needed pipelines are being built so that the oil and gas we are sitting on can be developed,” said Blankenship. Noting that environmental activists are fighting pipeline projects in West Virginia and elsewhere, she labeled fears about pipelines “simply unfounded and based on untruths. Pipelines have been transporting hydrocarbons all over the world for nearly 100 years. … Pipelines are the safest and most economical means of transportation for liquid and gaseous hydrocarbons.

A number of pipelines are currently under construction or recently completed in the state, including the Atlantic Coast Pipeline, Mountain Valley Pipeline, and Rover Pipeline. The Atlantic Coast Pipeline is slated to transport 2.0 billion feet of gas per day, creating 17,250 construction jobs and 2,200 operational jobs throughout the three states it spans. Rover Pipeline recently received the green light from federal energy authorities to become fully operational, carrying gas from West Virginia to Ohio and Canada. These projects are thoroughly reviewed before being granted the necessary permits, and carefully constructed over a multi-month, and sometimes multi-year, time period.

The points highlighted in the article are not only applicable to the state of West Virginia, but rather, the whole country. An extensive, modern network of energy infrastructure will ensure reliable energy delivery to consumers across the country, and promote grid resiliency. In addition, infrastructure projects promote job growth and bring significant tax revenue to municipalities and states along the route. GAIN looks forward to the safe completion of the pipeline projects currently underway in West Virginia, and the critical role they will soon play in fueling our country’s energy needs.

Pipeline 101: Construction

The fourth installment of our Pipeline 101 series covers the construction process. As with all aspects of pipeline projects, construction is very intricate and detail-oriented. Once the extensive approval process is complete, construction may begin. During construction, oversight and safety are key. Every pipeline is divided into multiple smaller segments, called “spreads.” Each spread has a project supervisor overseeing that part of the line. Highly skilled contractors receive dozens of hours of training and safety techniques before setting foot on a worksite.

There are three main processes by which a pipeline is installed. These three processes are open-cut trench excavation, horizontal directional drilling (HDD), and road boring. Each process has experts who are experienced and ready to navigate any potential issue.

Throughout the whole process, safety is the main focus. From the welding and pipeline installation, to the special coding in the valve installation process, all pipelines are subjected to careful inspection and testing to verify their integrity and compliance with all regulatory standards. Energy companies understand the importance of a safe pipeline to ensure successful operations. To learn more about the construction process, check out this short video.