Energy Boom Means New Infrastructure Spending

Dec 28, 2012

We know that shale energy creates jobs--lots of them--even in states where there isn’t active oil and natural gas development. We also know the boom has boosted growth in such seemingly unrelated areas as sand and hotel construction.

Now, we learn from the Wall Street Journal that because of the shale energy boom America’s energy infrastructure has to be retooled:

Surging energy production in North America is prompting billions of dollars of investment next year on pipelines and other infrastructure projects to move oil and gas around the continent.

The existing U.S. pipeline network isn't configured to fully serve the new production areas in the center of the country, from North Dakota to South Texas, where oil and natural gas production have started booming. As a result, companies are finding creative ways to move those fuels to market, including a return to early 1900s favorites: iron horse and barge.

The number of oil-laden tanker trains has grown, as has the number of river barges pushed by tugboats down the Mississippi River. Oil pipelines that once pumped crude north from the Gulf Coast increasingly are being reconfigured to flow south to refineries there.

Some natural gas pipelines originally built to ship fuel from the Rocky Mountains and Gulf to the East Coast are little used because of new natural gas discoveries in Pennsylvania. Those pipelines are being considered for conversion to handle oil.

This means infrastructure investment:

AECOM Technology Corp., a firm that does industrial project design, management and engineering, forecasts that in 2013 as much as $45 billion may be spent on new or expanded transportation infrastructure, including pipelines, rail cars, rail terminals and other projects, said Seth Deutsch, an AECOM senior vice president.

That’s new construction and manufacturing jobs.

When thinking about energy infrastructure, we can’t forget the Keystone XL pipeline. As construction progresses on the southern stretch of the pipeline connecting Oklahoma to Gulf Coast refineries and work continues to map a new path through Nebraska, the State Department, which refused to give the pipeline its regulatory blessing almost one year ago, keeps the northern portion in regulatory limbo to quell anti-energy critics.

It seems that every day we see a new story on how developing America’s energy resources is a job creator. With better energy policies this can be encouraged.

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