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Energy Consumption and It’s Delivery

For this blog let’s address the energy infrastructure crises, by first examining the current state of the energy landscape in the United States. As I see it, we would be remiss if we did not continue to delve into this very important discussion we had in this blog last week talking about our nation’s infrastructure without first addressing some key facts.

In fact, if you will recall, last week in this column I gave an overview of the situation and used the United States’ water infrastructure as a catalyst to highlight about some of the changes we need to start making if we’re going to fix our infrastructure problem. If you aren’t sure what I mean when I say “infrastructure problem,” I encourage you to listen to the July third podcast. I had the distinct pleasure to interview ASCE (American Society of Civil Engineers) President Kristina Swallow. It is an amazing interview.

This blog will focus on energy and the United States energy infrastructure. Let’s be clear: this is not a political column. I am going to attempt to avoid the landmines of the political pitfall by trying to avoid any politics as much as possible in this blog, but I will highlight a little of the controversy surrounding pipeline infrastructure.

Here are some of the facts about the current energy landscape in the United States. In 2017, the amount of energy produced was about 87.5 quadrillion BTU (British thermal units), according to the U.S. EIA (Energy Information Admin).

What’s more, the amount of energy produced in 2017 was equal to about 90% of the U.S.’s energy consumption, so we produced more than we consumed.

Fossil fuels—primarily petroleum, natural gas, and coal—accounted for a little more than three-quarters of the U.S.’s primary energy production in 2017, with renewable energy contributing just under 13%. And that’s all according to the EIA.

We’re looking at five primary sectors when it comes to our nation’s major consumers of energy. There’s electric power, transportation, industrial, residential, and commercial. They are listed from most consumption to least consumption. But what we’re primarily concerned with today is: how does this energy get delivered? The answer: through the energy infrastructure, naturally.

Before societies had formal energy infrastructure, people could only use natural gas if they happened to be at or near the source. As time went on, we started to find ways to transport natural resources from the source to wherever we needed these resources.

Fast forward to today, and as you know, we now use pipeline infrastructure to deliver energy just about everywhere it’s needed to power life and business. Of course, “where it’s needed” is a moving target.

Where energy was needed when the bulk of the U.S.’s pipeline infrastructure was originally built doesn’t necessarily reflect where it’s needed today.

For instance, one expert insists that some of the larger-scale interstate pipelines tend to run from historically large producing fields and regions to historically large consumer markets. But, over time, producing fields and consumer markets shifted.

What we’ve experienced in the U.S.—especially in the past decade—is old fields have dramatically dipped in their daily production, while large energy consumers have expanded around the country. Also, with the commercial development of shale gas, production areas that once produced a small percentage of U.S. gas now generate a greater portion than ever before.

All of this indicates that the energy is sifting considerably and there has been a significant shift in the source-and-use balance during a relatively short period of time. And these shifts have turned the midstream sector on its head.

A recent study from the INGAA (Interstate Natural Gas ASSN of America) foundation delved into this, exploring the supply and demand outlook for oil and gas along with the infrastructure necessary to support it in America.

It also asked questions like: how much midstream infrastructure development will be needed through 2035? The study suggests midstream infrastructure investment will peak in 2019 but will remain “robust” through 2035, largely as a result of strong market demand and relatively low commodity prices.

Capital expenditures for new oil and gas infrastructure development are projected to average $791 billion between 2018 and 2035. What does this translate to in terms of new infrastructure?

The INGAA estimates between now and 2035, the U.S. will add about 41,000 miles of pipeline to help transport oil, gas, and NGLs (natural gas and natural gas liquids), plus an additional 139,000 miles of gathering lines to support gathering, processing, and storage.

There are different schools of thought here on whether the addition of new pipeline infrastructure is a good thing or a bad thing. Let’s start by asking why this new infrastructure could be a good thing.

The INGAA says investment in infrastructure will contribute $1.3 trillion to the U.S. and Canadian GDP’s (gross domestic product) between 2018 and 2035. That’s about $70 billion annually.

What’s more, the study suggests infrastructure development could result in the employment of 725,000 U.S. workers annually.

While that sounds great, there’s a lot of controversy about the various social and environmental costs of pipeline infrastructure and new pipeline construction.

There’s no doubt that accidents along pipelines can have devastating social and environmental consequences. Highly publicized incidents have left many people questioning whether the risk is worth the reward. Again this is something for the politicians to debate, but let’s address the benefits of how technology can be the great equalizer in so many of these types of debates.

Let’s put the IoT (Internet of Things) to work for us to make sure that what we build and what we’ve already built is really safe. Let’s take the guesswork out of pipeline infrastructure maintenance. This is where technology can perform the greater good.

In my next column, perhaps I will take a closer look at the technologies that are being used to monitor and maintain pipeline infrastructure. When it comes to tech we all need to find the best innovators to help keep our workers and citizens as safe as possible.

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By |2018-07-09T21:02:46+00:007/11/2018|

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