Freelance Writing

This article appeared in Pipeline World, December 2004

OVER THE HORIZON
By Gordon Cope
2000 words

Pipeline World gazes boldly into the future and predicts the status of the industry a
generation from now.

It’s enough to make a pipeline veteran weep:  conventional sources of petroleum are
shrinking, construction is in the doldrums, legislators are on the warpath - and don’t
even whisper right-of-way in polite company.  Yet the pipeline sector in North America
is also facing huge opportunities over the next several decades, opportunities that will
carry it well into the 21st century.

A SHORT RECAP OF THE NEXT 20 YEARS
Conventional supplies of gas from such traditional basins as the shallow Gulf of
Mexico and the Western Canada Sedimentary Basin are expected to shrink
dramatically from its current level of 65 bcf/d.  Ditto, oil. U.S. crude production is
expected to slowly decline from 5.8 million b/d to 5.3 million b/d by 2025.  Canada’s
543,000 b/d of light, sweet crude production in the Western Canada Sedimentary
basin is nose diving at 5%, annually.  At the same time, demand for oil and gas will
increase from approximately 22 million b/d of crude and 67 bcf/d of gas to around 29
million b/d and 100 bcf/d by 2025.

The difference will be made up through a combination of new frontier gas sources,
increased oilsands production and imports.  From a pipeline perspective, the big
money will be in frontier gas and oilsands.  Large diameter pipes will be needed to
carry gas from the Arctic and Alaska to southern markets, and crude from the
oilsands to western ports.  Starting later in the decade, the current miserly level of
pipeline construction in North America will begin to rise as the 1,300-km Mackenzie
gas pipeline goes into the ground.  It could soon be followed by Terasen’s 30-inch
loop of its TransMountain line running from Edmonton to Vancouver and Enbridge’s
Gateway project, a 1,200-km liquids pipeline that would will run westwards from
Edmonton to the Pacific Coast, terminating at a deep sea port in either Prince Rupert
or Kitimat, British Columbia.  Last, but not least, the Alaska Highway pipeline, slated to
run 2,800 km and carry up to 6 bcf/d, would connect vast gas reserves to the lower
48 States.  These four projects alone could account for up to $31 billion in new build
between now and 2020.

In addition, new products pipelines will be needed to move petrol, diesel and jet fuel
to market.  If, in the likely scenario that local authorities object to LNG regassification
plants, lengthy new transmission lines will also be needed to carry gas up the East
Coast from the Gulf of Mexico.  The Interstate Natural Gas Association of America
(INGAA) estimates that, over the next 15 years, $42 billion will have to be spent on
new gas pipelines and storage in the US and Canada.  

But, after all that, what happens next?  As we ease into the latter half of the century,
what pipelines will be constructed, and what will they carry?  Who will own and work in
the industry?  What materials will be used?  How will networks function?

STEP ON THE GAS
Since Governor Arnold Schwarzenegger’s bold promise to establish the world’s first
hydrogen filling station network in California, speculation has swirled around how the
gas might be delivered to market.  With the aid of funding from the US Department of
Energy, scientist Marianne Mintz and her colleagues at the Argonne National
Laboratory in Chicago have been studying possible scenarios.  “You definitely need
pipelines to deliver large volumes economically,” she notes.  Currently, some 8 bcf/d
of hydrogen is produced from natural gas using Steam Methane Reformers (primarily
for use in removing sulphur from petrol and diesel).   Mintz speculates that a mature
hydrogen system able supply 100 million vehicles would require approximately 70
such plants situated nationwide.  The pipelines needed to deliver the natural gas
feedstock to the plants and the manufactured hydrogen to gasoline stations would
require an investment of approximately $300 billion over a 30-50 year period, starting
in 2020.  

Others, however, envision a more humble hydrogen system.  “I can imagine that a
local natural gas company might go into the hydrogen business,” says Jim Campbell,
the engineer responsible for the design and construction of hydrogen pipelines and
piping systems for Air Liquide in North America.  “They have the local franchise and
can build a system under the road.  That would be the most likely scenario.”

Regardless of how the hydrogen system evolves, new, larger pipelines will definitely
be very much in demand over the next half century, but not necessarily for fuel.  
“Water is going to become extremely important,” says Bill Shaw, an engineering
professor at the University of Calgary and the director of the Pipeline Engineering
Centre.   Shaw envisions an immense system that would carry fresh water from
northern Canada to the parched regions of the southwest.  “Northern Canada is
water rich.  Demand is mostly in the U.S.  It is needed immediately in the West Coast
and interior states – California, Nevada, New Mexico.”  Shaw expects that the water
lines will be at least as large and expensive as the Trans Alaska pipeline, exceeding
$10 billion.  Although the issue of shipping water from Canada to the U.S. is
contentious, Shaw guesses that construction may begin by 2030.  “There are a lot of
barriers to construction - social, political, environmental - but people are reasonable
in the end.”

GO DIRECTLY TO JAIL
While environmental and safety regulations have had a profound effect on the
pipeline sector over the last few decades, Michele Joy, general counsel for the AOPL,
speculates that the future will be dictated by justice courts.  “From a safety
standpoint, the public’s tolerance for incidents is going down, and in 20 years, it will
be zero.  The potential for criminal liability has already arisen in the incident in
Washington.”  (In 1999, the Olympic pipeline in Bellingham, Washington, was
damaged and gasoline entered a waterway and ignited.  Three people were killed).  
The president of the company went to jail for ‘failure to adequately train’.”   In an
attempt to control criminal liability, Joy speculates that the business will split into
owners and operators.  “The owners will be pension funds, and the operators will be
those willing to take the risk.  They will be a different type of person that you see
today.”

As for the workforce, staff levels will decrease. “Our estimate is that pipelines
currently employ around 25,000 people in the U.S.,” says Joy.  “That will drop by half
as automation and service contractors become more common.”  Those still employed
by pipeline companies will achieve higher levels of education.  “The staff will be
people who understand computers, hydraulics, risks, financing – their level of
schooling will rise.”  

YOU’RE STEEL THE ONE
Probably the most comprehensive changes to take place will be in construction,
materials and operations.  Art Meyer is Vice President of Technology for Enbridge
Pipelines Inc.  The Calgary-based company, which owns and operates more than
16,000 km of pipe in North America, moves 2.2 million barrels of liquids and 1.25
billion cubic feet of gas every day.   “We lose a lot of energy to friction,” he says.  “It
consumes a lot of power, and power is our highest expense.”  Recent experiments
have shown that inside coatings made of extremely tiny molecules could reduce
friction to a fraction of its current levels.  “Using nanotechnology, we could create
near frictionless pipe.”

Pipeline exteriors will also get a new generation of coatings.  “Right now, coatings on
pipe have a tendency to pull away and crack through the freeze-thaw cycle,” says
Meyer.  “We could have self-healing coatings on the outside of a pipe.  It would
prevent exposure to the environment and corrosion.”

As for the pipe itself, different construction materials are being tested, but the main
contenders all have their difficulties.  “Composites are high strength and can get you
a lighter weight and no corrosion and a long life, but the cost is extremely high,” says
Shaw.  “We’re not going to see glass or ceramic pipelines, they don’t have the right
(physical) characteristics.”

For the rest of the century, steel will still rule.  “I can’t see us getting away from metal,”
says Shaw.  “Metal has a problem with corrosion and stress corrosion, but it is good
for a long time.”  Research will look to extend the limits of steel’s strength.  “Right
now, they are looking at X120 (steel with a material strength of 120,000 psi), which
means that the wall thickness is half of X60, so it is a lighter product, which means
less material to manufacture and weld.  But as you increase the material strength, the
potential for stress corrosion rises, and if it fractures, there is the problem of arresting
it.  At higher strength, the steel is also more susceptible to hydrogen embrittlement.
We will continue to experiment, but there is a limit, and I suspect we will never get
beyond X160 without going into wrapping (creating a composite).”  

CAN YOU DIG IT?
Construction methods will incorporate more automation to improve safety and reduce
costs, but the main driver to innovation will be public intolerance to disruption.  “There’
s the expectation that industry will reduce its footprint,” says Meyer.  “Right now, you
have to dig a trench, shove the dirt to one side, then bring in the pipe on large
booms.  It takes up a wide swath of space.”  Meyer thinks that techniques used
offshore can be adapted for land. “In marine environments, we use a lay barge,
where the pipeline is simply dropped off the back.  We need to develop a ‘land lay
barge’ narrow enough to travel down a road.  It would trench, pipe and fill.  It would be
like a train that moved along the pipeline’s right of way.”

As for installing pipe in densely populated areas, equipment will be developed to drill
immensely long distances.  “Horizontal directional drilling is here now,” says Meyer.  
“But in the future, we’ll be able to drill several kilometres and put in large diameter
pipe.  It will be invaluable in urban areas.  You can go a long way into a city without
the expense and disruption to the public.”

Once the pipeline is in place, it will be designed to keep an eye on itself.  “In 20 years,
we could have smart pipe that is self-monitoring,” says Meyer.  “Right now, they strap
optic fibres into deep marine pipe to report conditions.  But you could use
nanotechnology to make the sensors and transmitters part of the pipe.  It would tell us
about corrosion and the strength of the steel.”  Legacy pipelines would need different
monitoring systems.  “We could build above-ground scanners that can tell us a pipe’s
condition without digging it up or running a tool inside.  We could also see more
robotics - integrity analysis devices that live in the pipe.  They can travel along and
detect problems.”

As more and more varieties of petrol, diesel and crude grades are dispatched down
lines, new ways will be needed to improve transportation efficiency.  “Someday we
may put radio frequency tags that are very small into fluids to act as batch identifiers,”
says Meyer.  “When you’re running batches of similar gasoline, you can use the tags
to swing more cleanly between tankage.  It allows you to more accurately identify
where that is.”

Expert systems will also be refined. “When we’re scheduling a pipeline, there’s a large
matrix of data involving supply and delivery requirements and issues that occur in
transit,” says Meyer.  “Expert systems create an optimum schedule, and gives us the
ability to react.  We’ll also have a system to diagnose inside a pipe and give the
operator better information.  The system will be able to take intervention or alert the
operator.”

By the end of the 21st century, pipelines may have evolved to take on entirely new
tasks.  Dr. Pedro Pereira-Almao is a professor in the Department of Chemical and
Petroleum Engineering at the University of Calgary.  A native of Venezuela, Pereira is
internationally recognized for his work in using super-heated steam to upgrade heavy
oil.  Recently, he has been looking at the effect that catalysts have upon bitumen
from the oilsands in Northern Alberta.   “What if you could make the catalysts really
tiny, on the order of 100 nanometres?” he wonders.  “You could put the catalyst and
hydrogen in the heavy oil and send it down a 300km pipeline and the upgraded oil
would come out at the other end!  Is it possible, or not?”