Will the trade war hurt US project builds? Not if the US does it right.

(edited)

8 hours ago, NickW said:

Because it is useful as an infill to service stranded oil resources where existing track is nearby or serve as a temporary option prior to a pipeline being built but it can't compete with pipelines for large scale movement of oil. 

As you identify, burying the pipe means the land is returned to its original use - a dual rail track won't allow that. Sure a track may have some dual functionality but I suspect once the oil has run out the line will become derelict. 

The cost of a rail is a lot more than just the track. You have crossings, if its single track you have to build large passing point sidings for them 1-2km tanker trains to pass with all the signalling to go with that. Alternatively you can build twin tracks with the associated costs In some locations you will need tunnels or embankments.

With pipelines you can usually use electricity to do the pumping. With rail, on the assumption its diesel then you will need a lot of expensive diesel as power. 

A pipeline is nice and automated and can largely be coordinated via a control room - send that oil direct to port for loading onto a ship, into storage tanks or straight into the refinery. Not so with rail transport as you have to hook up and empty each of those 750 barrel tankers. 

Finally if tariffs are going to increase the cost of pipelines then the same effect will be felt if the rail option was exercised as an alternative. In the short to medium term the USA is highly reliant on imported steel. 

 

 

 

Nick, you have accurately identified most of the problems associated with rail and the resolutions that favor piping, and may I add yet another:  from a bureaucracy and management perspective, a pipeline is less complex to manage, and thus can be done by less competent personnel.  Managing a complex rail system with lots of traffic requires staffing with competent managers, which tend to be in short supply. 

That said, let's take a look at the variables you have identified:

1.   The cost of pumping.   Oil is (by definition) a viscous mineral slime, and if not under pressure is going to have considerable pour resistance. It has to be pumped in "linear flow" conditions, and contrasted with "turbulent flow," or it will consume vast amounts of pump energy.  Linear flow implies a shear condition to the oil, with the oil film immediately next to the pipe wall never moving, and the area in the center of the pipe moving at maximum pumping speed. I suspect the oilpatch has developed a considerable expertise and historical data as to those profiles, so the energy required will be exactly known.  Whatever it is, it will be less than the energy required to move oil by rail.  If you take the locomotive as outputting 3,500 hp., you will be using full power on startup, yet once the train is rolling, it uses surprisingly little power.  The reason is that the steel wheel on steel rail has no effective deflection, so the energy needed to continue momentum is that of wind resistance on the nose.  And, given that the train is typically 10,000 tons  (for say 90 cars), that wind resistance is minimal (when calculated over the entire load).

GE recognized this and came out with the "Evolution" series of locomotive, in which the prime mover can be shut down in stages so that you have only one-fourth the total power in use when rolling along. Assuming two locomotives on the nose, your oil train is rolling with 1,750 operating hp., and even then is using probably even less.  In effect you have an oil pipeline with a cross-section of eight feet (which nobody builds) with the oil inside moving at 50 mph (which cannot be done no matter how much power you put in at the pump stations).  So even if the diesel fuel is vastly more expensive than electricity (which it likely is), that is not the determining factor.  Your train is going to use a fraction of the power a pipeline will - and move the oil a lot faster as a bonus. 

2.  Cost of passing sidings and signaling.   Yup, it would be a major cost if positive train control is required  (and the bureaucrats in DC have demanded that, pushed by incompetent politicians to be sure, but nonetheless PTC is a huge cost).  You get around the switching issue by using "spring switches," which automatically align for directing one flow into the siding and the other on the straightaway.  For technical reasons the spring heading traffic into the siding would be the returning empties.  With a spring switch you never need to re-set the switches. For that reason you could run without signals and have your line "dark," but the PTC aspect will be a huge expense, and may well tip the balance of capital costs to the pipe. And this is what happens when people who are not competent get involved in what is essentially an engineering exercise. 

3.   You have identified lack of automation on the loading and unloading as a hindrance, time delay, and cost center, and that will require input of Yankee ingenuity to overcome  (if it can be overcome).  For now, that would be a costing load on using rail.  Can it be automated using robotics?  Probably, but not on the cheap.  So that remains an obstacle.  If you could automate an unloading station for $500,000 a car, it still will run you $50 million for one car string. Costs climb fast when you are doing something new  (another reason it is not done as much as you might think). 

4.   The steel tariffs.   Those tariffs are not uniform; they actually apply to certain categories of steel products.  Anyway, steel rail today is made in long lengths, up to 1,650 feet in one piece, to reduce the junction points between rail pieces. It comes out of the mill in Indiana, is loaded onto special flatbed cars and will bend as it is transported around curves to the track-laying machine, where the building of rail including laying of the ties is all automated.  Nobody is attempting to import 1,650-ft lengths of steel rail, so that manufacture is largely domestic. The Trump tariffs specifically targeted pipeline steel, so that cost, specifically from the big pipe mfr. in Alberta, Canada (near Edmonton) got hit. And replacements for that Canadian pipe is not instantaneous, which was the whole idea in putting the tariff on pipe - it will stimulate the expansion of US pipe manufacturing capacity. 

On balance, I think you have identified the factors that tip to pipeline construction.  

Edited by Jan van Eck
change pipeline capacity to pipe building capacity
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(edited)

40 minutes ago, NickW said:

CLT looks like a major improvement over Structural Insulated Board which are bound together with lots of Formaldehyde and other nasties. 

Do you know what type of glue they use? 

Either Resinorcol or resorcinol.  I think it is resorcinol.  The major differences lie in the ability of the glue to fill voids, and the amount of clamping pressure needed to make a solid bond.  Typically, the glue joint ends up stronger than the wood, so you will see beams made up of individual thin planks with glue instead of a solid beam.  The glued planks end up having greater load-bearing capacity and resistance to flex and deformation.  A tree (solid piece) will bend in the wind; a glulam beam will not deflect at all.  Cheers. 

PS you never want to use formaldehyde glues, they will develop free radicals as vapor, will seriously attack the health of the inhabitants, especially when the windows are shut in, as in Winter. Ugh.

Edited by Jan van Eck
added PS

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(edited)

8 hours ago, Dan Warnick said:

 I came to this forum looking for information that would help me to make informed decisions about making successfully timed oil trades, that would eventually lead to my being able to contribute to and help improve the lives of people in my host country.  I find it is a good forum for the 1st goal, but I had no idea I would find people here that could actually provide guidance on how I might accomplish the second part of my goals. 

Well, don't get carried away, Dan.  So far, I  have accomplished nothing.  There is a lot of inertial resistance to change built into any complex bureaucratic society.  

Yet, this is the great advantage of America.  It has attracted the ingenious people of the planet and put them together in one jurisdiction, there to dream up and hatch all kinds of wondrous solutions to knotty problems.  Take the drill rig: to the ordinary person, you put that drill bit onto the drill pipe and down goes the hole in a straight line.  Now these clever Americans have figured out how to drill straight down for a thousand feet or more, then - bazinga!  Eureka! - the drill magically turns and starts drilling horizontally!  Who would have thought?  Truly amazing stuff. Objectively, it is inconceivable - yet Americans have figured that out and do so routinely, where it is not even remarked upon today. 

And that is the history of America. You would think that other English-speaking countries would have developed the same way, but they don't.  Take Canada, right next door, and it remains remarkably devoid of that sort of creative thinking.  You see little spurts and shots, but in the main the society is mentally stagnant, with most university grads wanting nothing more from their lives other than a government job.  What kind of enthusiasm for life is that?????  Your greatest desire is to be a bureaucrat? And you are good with that? 

Americans are not like that.  They are Doers and Dreamers, and so have attracted more Doers and Dreamers, over centuries, and now have this accumulated critical mass of very clever people.  And nobody wants to pay attention to Authority, those dead-handed bureaucrats that wreck everything  (which is what you get in next-door Canada). Two societies, yet they evolved quite differently, which shows you how the zeitgeist is controlled by externalities. I remain quite optimistic about America  (the Trump thing will pass). 

Edited by Jan van Eck
scrivener error
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2 hours ago, Jan van Eck said:

Either Resinorcol or resorcinol.  I think it is resorcinol.  The major differences lie in the ability of the glue to fill voids, and the amount of clamping pressure needed to make a solid bond.  Typically, the glue joint ends up stronger than the wood, so you will see beams made up of individual thin planks with glue instead of a solid beam.  The glued planks end up having greater load-bearing capacity and resistance to flex and deformation.  A tree (solid piece) will bend in the wind; a glulam beam will not deflect at all.  Cheers. 

PS you never want to use formaldehyde glues, they will develop free radicals as vapor, will seriously attack the health of the inhabitants, especially when the windows are shut in, as in Winter. Ugh.

Yep -Formaldehyde is often the cause of new build sick building syndrome as its used in so many different types of particle board. 

On several occasions I have advised with commissioning of a new building to get it as warm and toasty as possible to encourage the VOC's to vent off and then purge flush the entire building with fresh air. Usually get ignored and subsequent result is 3-5 years of elevated sick leave and staff dissatisfaction with indoor air quality. 

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I have glanced through these several posts regarding pipelines that will eventually become obsolete. We have four giant pipelines across our land in Oklahoma. Only a couple are used. The other two are causing no harm. 

But, there have been several horrible droughts. Sea levels are rising a bit. The entire heartland was suffering not too long ago . . . for water. Well, on the Left Coast, we have plenty of sea water, and the ability to desalinate. There are pipelines everywhere, once you get to Kansas, Oklahoma, Texas. It is pretty amazing to me that desalinated seawater, perfectly good for irrigation, hasn't been piped to the heartland. For that matter, great potable water could easily be piped from the Northwest to California farmland. 

Pipelines are wonderful. We have had at least one pipeline under our land since the forties. We have yet to experience a problem. And there are great ways to run a pig through them these days to find any problems. They haven't been multipurpose, but they could become so, with very little modification in thinking. 

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32 minutes ago, Gerry Maddoux said:

I have glanced through these several posts regarding pipelines that will eventually become obsolete. We have four giant pipelines across our land in Oklahoma. Only a couple are used. The other two are causing no harm. 

But, there have been several horrible droughts. Sea levels are rising a bit. The entire heartland was suffering not too long ago . . . for water. Well, on the Left Coast, we have plenty of sea water, and the ability to desalinate. There are pipelines everywhere, once you get to Kansas, Oklahoma, Texas. It is pretty amazing to me that desalinated seawater, perfectly good for irrigation, hasn't been piped to the heartland. For that matter, great potable water could easily be piped from the Northwest to California farmland. 

Pipelines are wonderful. We have had at least one pipeline under our land since the forties. We have yet to experience a problem. And there are great ways to run a pig through them these days to find any problems. They haven't been multipurpose, but they could become so, with very little modification in thinking. 

Crude Oil is worth about $450 a m3 depending on grade. 

Potable Water is worth about $2.91 m3 (Houston prices) http://banyanwater.com/across-plains-texas-water-rate-analysis-lonestar-state/

That will explain why long distance pipelines are built for one substance and not another. 

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38 minutes ago, Gerry Maddoux said:

I have glanced through these several posts regarding pipelines that will eventually become obsolete. We have four giant pipelines across our land in Oklahoma. Only a couple are used. The other two are causing no harm. 

But, there have been several horrible droughts. Sea levels are rising a bit. The entire heartland was suffering not too long ago . . . for water. Well, on the Left Coast, we have plenty of sea water, and the ability to desalinate. There are pipelines everywhere, once you get to Kansas, Oklahoma, Texas. It is pretty amazing to me that desalinated seawater, perfectly good for irrigation, hasn't been piped to the heartland. For that matter, great potable water could easily be piped from the Northwest to California farmland. 

Pipelines are wonderful. We have had at least one pipeline under our land since the forties. We have yet to experience a problem. And there are great ways to run a pig through them these days to find any problems. They haven't been multipurpose, but they could become so, with very little modification in thinking. 

Gerry, while there are no real technical barriers to what you propose, nobody is going to do that because of the money involved.  That heartland farming will be left to rot, and agribusiness will import food from Argentina before it spends the coin to pipe in freshwater.

To build a desalinatioin plant and expect to run it for large water volumes, you would have to go to a dedicated set of nuclear plants, and that future is controlled by bureaucrats with an astonishing vacuum of understanding.  It is not going to happen.  What could happen is piping freshwater from the Great Lakes, also because that is mostly "downhill" and thus requires much less energy.  The States bordering the Lakes are so alarmed at this prospect of a "water grab" that they have formed the Great Lakes Interstate Water Compact, in which all the States on the Lakes and Ontario have created this international Treaty that limits water withdrawals to smaller withdrawals for municipal drinking water and a little irrigation water.  Sending water to outlier States is now prohibited by Treaty. Otherwise, a pipeline sucking off hundreds of millions of acre-feet of Lake Superior water to the grains heartland would be built in a flash. 

So that leaves you with glacial legacy water in the Ogallala Aquifer, which has been tapped by pumping and has apparently dropped in water-table by some 150 feet and up to 300 feet in places (!).  Rainfall adds 61 mm. per year; extraction is 5 feet per year. When you exhaust that, your Oklahoma farms are headed for sagebrush and tumbleweed.  Such is life.

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Yes of course it will. US will get destroyed, it's kind of obvious. US smacking CHINA  with 500 bill +  tariff. When us is 20 Trill debt, will cause havoc. Why? Don't need to explain.

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