The Association for
Hose and Accessories
Distribution

09/28/2016

Pipeline Pushback - What's at Stake?

Those opposed to a prominent role for fossil fuels in America's energy portfolio are concentrating their focus on stopping pipeline projects as a primary way to strangle production and "keep it in the ground". 

Pipelines are essential to both production and consumption of natural gas and petroleum. They are the safest and most cost-effective method of transport. Without adequate pipeline capacity, neither natural gas nor petroleum liquids can be produced and delivered economically. This is because either (1) the higher cost of delivery by other means makes them currently uncompetitive, or (2) the lack of takeaway capacity drives the oversupplied local market price beneath the cost of production. In either case, new wells are not developed. 

Two things are clear for suppliers of construction, equipment, materials and services to energy operations. First, without new pipeline capacity, business driven by production from new wells in the Appalachian Basin and the Bakken will be limited under current price levels. Second, opposition presents major risk to otherwise tremendous supply opportunities for construction and operation of proposed new pipeline projects themselves. 

Much more here.