Aging steel oil pipelines latest threat facing United States

The fire floods from the subprime lending volcano have temporarily been contained thanks to U.S. Federal Reserve chairman Ben Bernanke who rained green showers of dollars on these deadly streams, helping the lenders but not the borrowers, but in doing so merely postponed the day of reckoning, as even greater dangers are ready to emerge from behind our facade of false confidence.

This became plain last week at a conference in Houston, Texas on offshore technology, attended by all the big shots in the oil and finance industry.


Matthew R. Simmons, himself a prominent banker, spoke there. His topic had a two-fold warning: End the oil addiction; replace its aging infrastructure. He has sounded the alarm bells for at least five years, especially in his book, “Twilight in the Desert”, casting doubt on Saudi Arabia’s oil reserves.

Simmons, whom I met last year at a peak oil conference in Boston, began by emphasizing that steel deteriorates the minute it is cast, because “rust never sleeps.”

There are 335,890 miles (some 530,000 km) of aging steel pipelines in the U.S. alone, all subject to corrosion, leaks and metal fatigue. And that is only a fraction of the oil network: 1,127 tank farms plus hundreds of refineries have many more millions of miles of steel tubes, both monstrous and minute. Because the price of oil has been so low for so long – it was $10 per barrel 10 years ago – there simply was not enough money to properly inspect this decaying mesh of intricate tubing and replace them where needed.

These tired steel building blocks are a symptom of the dual exhaustion the oil industry is subject to: both the pumping of the liquid gold and its transportation systems are now in terminal decline. Simmons is convinced that peak oil is here. Peak oil means that we have reached a plateau in oil production, with ever greater decreases to come, even while demand is rising. Of course this means ever rising prices.

Belleville Intelligencer