Exec Sees Exciting, Concerning Times for Pipeline Industry

As the CEO of Houston-based energy infrastructure firm Lineal Star Holdings, Tim Connolly appreciates better than most the robust demand for oil, gas and products' shipping capacity on pipelines throughout the United States.

“It is an exciting time for the pipeline industry and the growth in oil and gas production now being sold into both domestic and international markets,” Connolly told Rigzone. “In previous years when the U.S. was a net importer of energy, we sent billions of dollars from American citizens to other countries for their energy. Now that position has completely reversed, thus bringing in new billions of dollars to our economy, helping improve the prosperity and balance of payments in the U.S.”

Although Connolly sees benefits for the U.S. pipeline sector, he also expresses concern about the overall condition of the country’s pipeline infrastructure. He is hardly the only one. In its 2017 Infrastructure Report Card, the American Society of Civil Engineers (ASCE) gave the U.S. energy system – including nearly 3 million miles of oil and gas pipelines – a D+ grade.

To be sure, ASCE’s grade encompasses assets held by the oil and gas sector as well as electrical utilities. Moreover, the organization’s report acknowledges that pipeline construction has advanced “at a fairly brisk pace to address new sources” since 2013. Nevertheless, ASCE also pointed out that periodic failures in existing pipelines and permitting delays are ongoing problems and underscore the need for better monitoring and maintenance.

For its part, the pipeline industry takes steps to improve its already strong safety record. For instance, the Association of Oil Pipe Lines (AOPL) and the American Petroleum Institute (API) collaborate on a liquids pipeline industry-wide endeavor to enhance pipeline safety organizational culture, accelerate development and adoption of new inspection and leak-detection tools, improve emergency response preparedness and better inform and engage stakeholders. Gas pipeline companies also integrate various safety measures into their operations on an ongoing basis, outlined in this Interstate Natural Gas Association of America (INGAA) document.

During his recent conversation with Rigzone, Connolly elaborated on his concerns about domestic pipeline infrastructure as well as where he sees opportunities. Read on for his perspective.

Rigzone: What do you see as the key oil and gas pipeline infrastructure challenges in the U.S., particularly in terms of operations and maintenance?

Tim Connolly: Key challenges are the aging pipelines throughout the USA and the ability to timely identify, assess and complete required maintenance and repairs before major breakdowns occur. There is no set formula that fits every situation, and the greatest challenge is to improve the industry predictive capabilities of identifying near-term and long-term pipeline problems before they occur.

Rigzone: What do you see as the pros and cons of how the pipeline industry is managing these operations and maintenance challenges?

Connolly: Reputable pipeline industry operators keep safety as the first and foremost priority at all times, for both the pipelines and the workers that construct, maintain and repair them. However, the most difficult task for the industry is how to anticipate needed maintenance and repairs before they occur.

Rigzone: How could the industry improve?

Connolly: The industry could improve by developing industry databases and artificial intelligence capability necessary to accurately predict major breakdowns before they occur and take steps to improve critical timing of maintenance and repairs before a major catastrophe occurs.

Rigzone: Since the onset of the shale revolution, we’ve witnessed rather dramatic shifts in how natural gas is shipped in the U.S. For instance, Appalachia – formerly a destination for gas – is shipping gas to the Gulf Coast. How have such shifts affected pipeline operations and maintenance?

Connolly: These new markets are increasing the usage of both existing and new pipelines to reach these markets. Because many pipelines are operating at their capacity and generating significant new revenues for their owners, special care must be taken to increase the frequency and quality standards of pipeline monitoring and maintenance to account for the increased usage and hence need for stepped-up maintenance schedules.

Rigzone: Are there any glaring issues on the U.S. pipeline infrastructure scene that are getting far too little attention? In other words, are there any proverbial elephants in the room that will need to be addressed sooner or later?

Connolly: There are approximately 2.7 million miles of pipelines running throughout the U.S., many of which are 50 years old or more. Additionally, records do not reflect where all these pipelines are or who their exact owners are responsible for them.

To contact the author, email mveazey@rigzone.com.