market | Update
Figure 6: US crude oil production, million barrel/day Source: EIA
Figure 7: Schematic of shale gas exploitation Source: ProPublica
used in the past. Shale oil was rendered uneconomic by the advent of cheap Middle Eastern crude, but a combination of new technologies and an increase in the price of crude may well change that in the future. All these changes in Oil & Gas supply are powerful
drivers for pipeline construction. So are changes on the demand side - the fast growing manufacturing output in Asia and South America, for instance, results in increased demand for energy. This, in turn, drives the construction of new pipelines.
Securing future supplies However, new pipeline construction is not only driven by the growth of Oil & Gas volume that needs to be transported. The need for supply reliability acts as an amplifi er of demand. Since Oil & Gas represents a strategically important resource, countries are often interested in diversifying sources and routes of transportation. Europe is a good example in this context. Technically, Europe may be able to source all its natural gas needs from Russia. In reality, however, it has sought to also access sources in North Africa, Central Asia and the Middle East. This has had the effect of driving pipeline construction activity beyond that which would have been strictly necessary to transport the volumes. So far, we have been discussing new pipelines. But,
as already mentioned, mankind has been building pipelines for many decades now. Some of these pipelines are already old and need to be repaired, rehabilitated or replaced. This kind of activity is gaining in importance in the pipeline industry. In addition, while this analysis has focused mainly on Oil & Gas pipelines (which currently account for the lion’s share of the total), there is also considerable
14 PIPELINE COATING | May 2013
growth in the construction of pipelines carrying potable water and water-based liquids. To start with, the sources of fresh water are very unequally distributed around the globe. Some countries and regions suffer from water penury – a situation that is further exacer- bated by climate change, population growth and desertifi cation. Solutions involve either transport of water from other regions, or desalination. Both solutions involve the construction of pipelines. In the slightly more distant future, we are also likely
to see numerous pipelines transporting carbon dioxide. As previously mentioned, the world is far from being able to wean itself away from fossil fuels. On the other hand, continuing to burn such fuels produces CO2
, which
adds to the greenhouse effect and causes climate change. Part of the solution is a technology called Carbon Capture and Storage (CCS). This involves capturing the carbon dioxide produced by power plants and storing it, for instance in exhausted Oil & Gas fi elds. Between source and storage site, the pressurised gas will be transported through pipelines. In summary, there are plenty of reasons to answer
the third question of our analysis with a confi dent affi rmative: Yes, the world is likely to need many additional pipelines. The pipe coating industry can look to the future with optimism.
For more information Quantitative outcomes of the analysis in this article (in terms of pipe coating) are provided in the newly-pu- bished third edition of Applied Market Information’s study: Steel Pipe Coating – the Global Market 2013. For more information contact Noru Tsalic, senior
vice president AMI Consulting. Tel: +44 (0)1173 111526. Email:
nt@amiplastics.com.
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