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Oil and Gas Industry: A Research Guide

Modes of Transportation

Standard Oil Company's wharf showing tanker being loaded, Los Angeles Harbor, Cal. 1919 June 9. [LOT 10166]. Library of Congress Prints and Photographs Division.

Crude oil moves from wellhead to refinery using barges, tankers, over land, pipelines, trucks, and railroads. Natural gas is transported by pipelines and liquefied natural gas (LNG) tankers.

Oil Tankers

The U.S. Coast Guard defines a tank vessel as one that is constructed or adapted to carry oil or hazardous material in bulk as cargo or cargo residue. There are various types of tankers: oil tanker, parcel tanker (chemical vessels), combination carrier (designed to carry oil or solid cargoes in bulk), and barges. International bulk chemical codes govern the safe transport of chemical cargoes and provide various levels of protection against the uncontrolled release of substances. Tank vessels are classified by the trade in which they routinely operate over a period of time. The three most common categories are crude oil carriers, product carriers: which can carry clean (e.g., gasoline, jet fuel) and dirty (e.g. black oils): and parcel carriers (chemicals). Tankers tend to remain in one trade but market conditions can dictate a change, even though the process to change a vessel's trade involves extensive work.

Crude carriers are classed as either VLCCs (Very Large Crude Carriers) or ULCCs (Ultra Large Crude Carriers) and are designed to transport vast quantities of crude oil over many long and heavily traveled sea routes. In addition, "lightering," offloading or transferring oil from large tankers to smaller ones, is used so that the smaller vessels can enter smaller ports that the larger vessels cannot.

One of the major concerns in the safe transport of bulk liquid cargos by tank vessel is the stress on the hull. Bending in the form of sagging (concentration of weight in the mid-section of the vessel causing the deck to be subjected to compression forces while at the same time the keel is under tension), hogging (concentration of weight at both ends of the vessel causing the deck to experience tensile forces while the keel is under compression), and shear force, which occurs when two forces act in opposite directions parallel to each other, such as at a bulkhead between an empty ballast tank and a full cargo tank. The weight or gravitational and buoyant action experienced on either side of the bulkhead causes the shear force phenomenon.1 Tankers that transport oil domestically from one U.S. port to another must comply with the Jones act, which requires a vessel to be U.S. built, with a majority U.S. crew and majority U.S. ownership. These requirements greatly reduce the number of vessels available for domestic oil transportation, although waivers have been granted for emergencies.2

LNG Tankers

High pressures and explosions make it difficult to transport compressed natural gas on tankers. Due to scientific advancements in the mid-20th century, natural gas can be turned to liquid at extremely low temperatures and transported as liquefied natural gas (LNG). LNG tankers are specially designed with double hulls, to allow extra ballast water because LNG is lighter than gasoline, and additional safety features.3 Due to the restrictions of the Jones Act, there are currently no approved vessels to transport LNG domestically by tanker.4

Pipelines

Pipelines can refer to gathering systems (wellhead to processing facilities), transmission lines (supply areas to markets), or distribution pipelines (most commonly to transport natural gas to medium or small consumer units).5 Pipelines play a very critical role in the transportation process because most of the oil moves through pipelines for at least part of the route. After the crude oil is separated from natural gas, pipelines transport the oil to another carrier or directly to a refinery. Petroleum products then travel from the refinery to market by tanker, truck, railroad tank car, or pipeline.6 As natural gas production grows in the United States, demand for new pipeline construction has been increasing.7 The United States has about 300,000 miles of natural gas transmission pipelines.8

Strategic planning involves determining the shortest and most economical routes where pipelines are built, the number of pumping stations and natural gas compression stations along the line, and terminal storage facilities so that oil from almost any field can be shipped to any refinery on demand.9 Offshore pipelines carry more risk for leaks and environmental impact than onshore pipelines, but technological advancements in pipeline material and monitoring systems have improved pipeline safety and efficiency.10 Standards exist for safety in the design and construction of pipelines, and are published by organizations such as the International Organization for Standardization (ISO) and the American Petroleum Institute (API).11 The Federal Energy Regulatory Commission (FERC) regulates the interstate transportation of natural gas and oil, and approves LNG terminals and natural gas pipelines.12 Before FERC was created in 1977, Interstate Commerce Commission was responsible for regulating oil and gas transportation.13

Barges

Barges are primarily used on rivers and canals. They require less infrastructure than pipelines, but are more costly, transport much less volume, and take more time to load.14

Railroad / Tank Trucks

Historically, railroads were the primary means of petroleum transportation. Today, railroads compete with pipelines: While usually more expensive than pipelines, the already existing railroad infrastructure creates a more flexible, alternative route when pipelines are at capacity.15 Many petroleum products travel from refineries to markets by tank truck or railroad tank car. Tank trucks deliver gasoline to service stations and heating oil to houses.

Tugboats

The increasing demand for oil has led to deeper drilling, with larger drilling rigs located further offshore, which has justified building of larger and more powerful tugs and larger barges.

The following materials link to fuller bibliographic information in the Library of Congress Online Catalog. Links to additional online content are provided when available.

Notes

  1. Mark Huber, Tanker Operations, a Handbook for the Person-in-Charge (PIC), 4th edition. (Centreville, MD: Cornell Maritime Press, 2001), 23. Back to text
  2. John Frittelli, Shipping Under the Jones Act: Legislative and Regulatory Background. Congressional Research Service Report R45725, November 21, 2019. Back to text
  3. Michael D. Tusiani and Gordon Shearer, LNG: A Nontechnical Guide (Tulsa, OK: PennWell Corp, 2007), 73. Back to text
  4. Michael Ratner and John Frittelli, U.S. LNG Trade Rising, But No Domestic Shipping. Congressional Research Service In Focus IF10878, May 4, 2018. Back to text
  5. Jia Man Neoh and Shang Yang Chuah, Oil & Gas: Europe Industry Surveys, (New York: CFRA, 2019). Back to text
  6. Morgan Downy, Oil 101 (Wooden Table Press, 2009), 242. Back to text
  7. John Madigan, Oil & Gas Pipeline Construction in the US (IBISWorld Industry Report 23712, August 2019). Back to text
  8. American Gas Association. How does the natural gas delivery system work?, https://www.aga.org/natural-gas/delivery/how-does-the-natural-gas-delivery-system-work-/External. Back to text
  9. Richard Rabinow, The liquid pipeline industry in the United States: Where it’s been, where it’s going (report prepared for association of oil pipe lines) [PDF] (2004). External Back to text
  10. Madigan, Oil & Gas Pipeline Construction in the US Back to text
  11. American Petroleum Institute, https://www.api.org External; International Organization for Standardization, https://www.iso.org/home.html External. Back to text
  12. Federal Energy Regulatory Commission, “What FERC Does,” External. Back to text
  13. Jerry A. McBeath, Big Oil in the United States (Santa Barbara, CA: ABC-CLIO, 2016), 6. Back to text
  14. “Nigeria’s Cash-Strapped Oil Industry Swaps Pipelines for Barges,”External Financial Times, (April 19, 2017). Back to text
  15. John Frittelli, Paul W. Parfomak, Jonathan L. Ramseur, Anthony Andrews, Robert Pirog and Michael Ratner, U.S. Rail Transportation of Crude Oil: Background and Issues for Congress (Washington D.C.: Congressional Research Service, Feb. 6, 2014), 5-6. Back to text