• David Armes

How is Oil Transported?

We probably all know that oil comes from the ground. Oil wells, both on land and offshore in the ocean, pump oil up from places sometimes kilometers underneath the Earth. It then goes through refinement, is turned into gas, diesel, lubricants, and other petroleum products, but how is it transported? According to the U.S. Energy Information Administration, in 2019, the United States consumed 20.46 million barrels of petroleum per day. That’s a lot of oil that needs to be moved around the country.


What are the options for transport?


In the United States, crude oil and other petroleum products are transported one of four ways:

  • Pipeline: 70%

  • Tankers and barges on water: 23%

  • Trucking: 4%

  • Rail (trains): 3%

As you can see, the vast majority of the transportation is done via pipeline, with over the water coming in second. Canada transports a full 97% of their natural gas and petroleum via pipelines [Forbes].


Why all the movement? Can’t we use it near where we get it?


Not exactly. Part of the drive for all this transport is different crude oil has different properties and varies in sulfur content and density. Crude also isn’t useful until it’s treated and turned into gas, heating oil, or other products. From Forbes: “As an example, the second largest refinery in the United States, Marathon Oil’s GaryVille Louisiana facility, can handle over 520,000 barrels a day (bpd) of heavy sour crude from places like Mexico and Canada but can’t handle sweet domestic crude from New Mexico.” Increased need for transportation such as the Keystone Pipeline is to get heavy tar sand crude oil to the Gulf Coast refineries that can process it.


Image Credit: Breakthrough


What does all this movement cost?


It’s estimated that pipeline costs of transporting crude oil is about $5 per barrel, whereas rail is about $10-15. Trucking is higher. Marine vessels are somewhere between pipeline and rail, but are usually used where neither is a good option. Along with the differences in cost, there are differences in flexibility and safety. For example, there are more train tracks than pipelines, which gives rail more flexibility. But, there are many more roads than tracks. In the case of oil, more flexibility equals more cost to transport as the size of the vessels shrink and the complexity goes up. The most commonly used methods are exactly what you might expect with pipelines being the cheapest, as you can see above.


Which option is best overall?


Pipelines are the most used option because they are least expensive, require little in the way of operation and maintenance compared to other methods, and are usually the safest. The biggest downside is the large upfront investment. Pipelines have to be planned, permitted, and built, sometimes over thousands of miles. The huge upfront cost is offset by the ability to use that pipeline for decades of transportation at significantly lower cost.


Moving petroleum products by ship is another common method, especially since countries export oil internationally. The planet’s tanker fleet is made up of about 4,200 vessels that transport oil all over the world. About 85% of those are independently owned and move oil from country to country. According to Breakthrough, “Smaller vessels typically transport “clean cargoes” which are refined products such as gasoline, diesel, and jet fuel. Large tankers—averaging 2 million barrels of crude oil per movement—however, carry dirtier cargoes like crude oil and unrefined commodities.” Some of the highest traffic areas for ships are known as choke points, which you can see below. The Strait of Hormuz at number 1 has the most traffic down to the Panama Canal at number 8 with least.


Image Credit: Breakthrough


The domestic oil boom in 2013 led to a sharp increase in rail traffic. Surplus oil meant there wasn’t enough pipeline capacity to move oil, so the next most efficient option was scaled up. With the price of oil leveling out over the next few years after, pipelines again began to pick up more of the slack. Additionally, there are many wells that can’t be reached by pipeline, so trains are the only good option.


Last is truck transport. Since trucks can only carry 200-250 barrels of oil per movement, they are a very inefficient way to move petroleum. Trucks are usually used when both pipelines and rail are infeasible or when there is a short distance to go.

The best option for oil transport really depends on where it needs to go. For long distances over land or short distances underwater, pipelines are the best option. If pipelines won’t work, rail is the next best option for over land. If an ocean needs to be crossed, tanker ships are pretty much the only option. For land where none of the above works, trucks handle those short distances with ease.


Since pipelines are the most common option for land transport, here’s a little on how they work:


They can be anywhere from 4 to 48 inches in diameter, usually buried underground 3 to 6 feet below the surface. Depending on the location, they can also run on the surface if needed. There is usually some kind of wood, concrete, plastic, or sand padding that protects the pipes from abrasion. Wax from the oil can build up in pipes in colder climates, and are actually inspected and cleaned by a process called pigging. “Smart pigs” can actually detect problems in pipes, increasing safety and potentially reducing spills. Fun fact: “pigs” are launched from pig launcher stations and go to another station downstream, cleaning or inspecting as they go.


A smart pig, probably not what you pictured…

Image Credit: RigZone


In the future, we will likely dive into more detail on pipelines, pigging, and tankers. For now, happy Friday!




Sources:

https://www.eia.gov/tools/faqs/faq.php?id=33&t=6#:~:text=In%202019%2C%20the%20United%20States,billion%20barrels%20of%20petroleum%20products.&text=Last%20updated%3A%20March%203%2C%202020,Petroleum%20Supply%20Monthly%2C%20February%202020.

https://www.forbes.com/sites/jamesconca/2014/04/26/pick-your-poison-for-crude-pipeline-rail-truck-or-boat/#5315d29b17ac

https://www.breakthroughfuel.com/blog/oil-in-motion-visibility-into-crude-oil-transportation/

https://en.wikipedia.org/wiki/Pipeline_transport#:~:text=Oil%20pipelines%20are%20made%20from,are%20constructed%20of%20carbon%20steel.

https://www.rigzone.com/training/insight.asp?insight_id=310&c_id=


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