Economic, environmental, and safety impacts of transporting oil and gas in the U.S.

Primary Investigators


Megan E. Hansen, Director of Policy
Ethan Dursteler, Student Research Associate

Introduction


Access to cheap and reliable energy is vital to the continued growth of the U.S. economy. In today’s energy market, oil and gas are both relatively cheap and reliable energy sources. The efficient transportation of these products ensures that Americans are able to fuel their day-to-day lives. The United States transports large amounts of oil and gas over long distances to help meet the energy needs of its citizens. In 2017, petroleum production in the United States is nearing 15 million barrels per day and is projected to climb to 18.6 million by 2040. Transporting these products in the most efficient and safest manner allows domestic energy production to flourish and provides U.S. consumers with access to affordable energy.

There are four main methods of transporting oil and gas in the United States: pipeline, rail, boat, and road transportation by truck. In this report we analyze the three inland transportation methods’ economic impact, safety record, and effect on the environment, and look to determine which of the three deliver oil and gas to consumers most cost-effectively.

Pipeline is the most commonly used method for transporting oil and gas. About 70 percent of all domestically produced petroleum products is transported by pipeline. There are currently 2.4 million miles of natural gas pipelines and 190,000 miles of liquid petroleum pipelines throughout the United States.

Transportation by rail is the most commonly used alternative to pipeline transportation. Since the domestic oil boom in the mid-2000s, the use of rail to transport crude oil and natural gas has increased dramatically. In 2008, 7 million barrels of oil were delivered by rail. By 2013, that number increased to 262 million. Although that number decreased slightly in recent years, the competitive advantages offered by rail, particularly its access to remote regions, will likely make it a viable transportation method for years to come.

Although pipeline and rail are generally used to transport oil and gas long distances, truck transportation is commonly used to move smaller quantities of oil and gas over shorter distances. Despite the fact that trucks have limited holding capacity, they help move oil and gas from production sites to pipelines and other long-distances transportation infrastructure, and across areas where pipeline or rail infrastructure does not exist. An average truck holds about 200 barrels of oil, about one-third of the capacity of the average railcar.

All three forms of transportation play a role in moving oil and gas efficiently, but each has its unique trade-offs in terms of economics, environmental impacts, and safety.

Read the full report here.


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