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Threats to America’s oil pipeline grid

Threats to America’s oil pipeline grid thumbnail

Preface. At some point of energy decline there will be Americans who tap into pipelines to get scarce oil for themselves and to sell it on black markets. Just look at the massive amount of oil being stolen in Nigeria here. And the rate of theft is increasing, in 2017 9,000 barrels a day were stolen versus 6,000 in 2016, which also often resulted in messy spills.

The United States has 150,000 miles of crude oil pipelines, while Nigeria has just 2,800 miles and can’t protect them from theft (Wikipedia 2015).

One of the best and most effective ways governments can help their citizens cope with energy decline is to ration oil to agriculture whatever it needs, and after that other essential services and citizens. If oil theft can’t be prevented, the descent of civilization will be even faster.

Alice Friedemann  author of “When Trucks Stop Running: Energy and the Future of Transportation”, 2015, Springer and “Crunch! Whole Grain Artisan Chips and Crackers”. Podcasts: Practical Prepping, KunstlerCast 253, KunstlerCast278, Peak Prosperity , XX2 report


Hampton, L., et al. 2016. Bolt cutters expose vulnerability of North America’s oil pipeline grid. Reuters.

All it took was a pair of bolt cutters and the elbow grease of a few climate activists to carry out an audacious act of sabotage on North America’s massive oil and gas pipeline system.

For an industry increasingly reliant on gadgets such as digital sensors, infrared cameras and drones to monitor security and check for leaks, the sabotage illustrated how vulnerable pipelines are to low-tech attacks.

On Tuesday, climate activists broke through fences and cut locks and chains simultaneously in several states and simply turned the pipelines off.

All they had to do was twist shut giant valves on five cross-border pipelines that together can send 2.8 million barrels a day of crude to the United States from Canada – equal to about 15 percent of daily U.S. consumption.

The activists did no damage to the pipelines, which operating companies shut down as a precaution for checks before restarting.

The United States is the world’s largest energy market, and the infrastructure to drill, refine, store and deliver that energy to consumers is connected by millions of miles of pipeline that are impossible to protect entirely from attack.

“You’re not manning these things on a permanent basis. It’s not viable,” said Stewart Dewar, a project manager at Senstar, an Ottawa-based company that authored a 2012 white paper on pipeline security. “It’s too expensive.”

55 Comments on "Threats to America’s oil pipeline grid"

  1. JuanP on Sun, 9th Jun 2019 5:12 pm 

    Goldman Now Expects The Yuan To Drop Below 7 For The First Time Since The Financial Crisis

    the bank now sees “scope for further US dollar appreciation” against the Yuan, and as a result it has revised its USD/CNY forecasts higher to 7.05, 6.95, and 6.80 on a 3M, 6M and 12M outlook (from 6.95, 6.65 and 6.60 previously). This is remarkable, because if Goldman is right, not only will the yuan breach what many have said is the PBOC’s “redline” level of 7.00 vs the USD, which to many is also the catalyst for a resumption in aggressive capital flight from China, but would also mean the lowest level of the yuan since the financial crisis – the last time the USDCNY traded above 7.00 was in March 2008, just after Bear Stears collapsed. This, in turn, was shortly after China began strengthening the yuan after a decade of “fixing” the currency at almost exactly 8.28 as shown in the chart below.

  2. JuanP on Sun, 9th Jun 2019 5:14 pm 

    Oopps forgot that was from Zero Hedge my favorite go to place for news.

  3. JuanP on Sun, 9th Jun 2019 5:27 pm 

    Much More Than A Trade War
    Meanwhile, the proponents of a “gold-backed” yuan faced the reality of a Chinese central bank that injected and increased the money supply in a more aggressive way than the US Federal Reserve. China is not following sound money policies. The PBOC is copying the same policies of the Fed and BOJ by the book. It is not even remotely close to a gold standard, as gold reserves are less than 0.25% of M2 money supply. The gold-backed-yuan mirage faded with two consecutive devaluations, a currency that is used in less than 4% of global transactions and an extremely aggressive monetary policy. “Firing blanks” Many have mentioned that China could sell its US treasury holdings or threaten with its rare earth supply, essential for the manufacture of technological equipment. China is not the largest holder of US bonds in the world, not even close. It’s the US. In fact, China has already reduced part of its holdings in US bonds and yields fell. No, China could not weaponize its US debt holdings because it would run out of reserves and sink the economy and the yuan with it (read this excellent analysis ). China’s FX reserves have fallen by 21% from the highs and the vast majority of them cannot be used. The only solution for China would be to eliminate its capital control and let the yuan float, but then it could face a huge devaluation that would lead the country to a spiral of bankruptcies which may, in turn, lead to more yuan printing, a yuan that is not used worldwide and with diminishing demand. Recession or financial crisis. Does the United States have anything to lose? A lot, but much less than China. According to Oxford Economics, the impact on US GDP of a total and prolonged trade war would be between 50% and 70% higher in China than in the US, and we have to add the domino effect of bankruptcies in China Global fund flows move to the US and out of emerging economies. The strength of the United States is to have a safer, open economy where currency remains a global reserve, not because of military power, but because the rest of the currencies fall into the trap of carrying out the same monetary imbalances as the US but without its free market, openness and real demand for currency. China’s Achilles heel has been to try to be a reserve currency whilst maintaining capital controls and increasing state intervention, playing to be the US without its dynamism, openness and free market. Its only card was a debt-fueled high-growth economy. Chinese officials knew it was impossible, but thought that being the “engine of world growth” would allow them to get away with it. They have met with a customer, the United States, which is the only one that supports its huge trade surplus ( China has a trade deficit with most of its other partners), and that does not depend so much on exports. The US exports less than 12% of its GDP. The United States knows that this war has important negative internal economic consequences. Tariffs are not a solution, only a weapon, because if China does not begin to open its real economy, the problem will be greater in the long term.

  4. Anonymouse on Sun, 9th Jun 2019 5:29 pm 

    Juan, you forgot to put your Zero Hedge link.

  5. More Davy Identity Theft and Projections on Sun, 9th Jun 2019 5:36 pm 

    JuanP on Sun, 9th Jun 2019 5:12 pm

    JuanP on Sun, 9th Jun 2019 5:14 pm
    “Oopps forgot that was from Zero Hedge my favorite go to place for news.”

    JuanP on Sun, 9th Jun 2019 5:27 pm

    Anonymouse on Sun, 9th Jun 2019 5:29 pm

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