Finding the Value in Research for the Pipeline Industry

By George Tenley, President of the Pipeline Research Council International

“Energy pipeline research will remain a viable and sustainable resource for the world's vital energy lifelines to the extent that it yields clearly recognizable benefits”
-George Tenley

To understand the challenges in achieving value from energy pipelines research, it may help to consider the realm of product development. Think of the cell phone, the safety razor and medical devices. A great deal of leading edge research has gone into all three and the end result in each case is a large market, dominated by a relatively small number of key players generating billions in sales worldwide. However, the value generated is not the physical product itself but the collateral “product” it enables. So, the value derives from the razor blades, the monthly cell phone services, and the medicine that flows through the device.

In contrast, there has been a reduction in the amount of investment in research for energy pipelines over the last 25 years. Companies have eliminated entire research departments. But, at the same time, there has been growing investment in research in the exploration and production of the hydrocarbon energy that pipelines transport. While seemingly everyone has a razor, a cell phone, and has benefited from medical devices, relatively very few people understand the essential value they derive from pipelines. Achieving widespread understanding of the role and value of energy pipelines and how (if at all) they are perceived, both within and outside the energy industry, is one of the most difficult hurdles to overcome in making the case for energy pipeline research.

Last year I wrote about the critical need for collaboration as the means best able to match limited resources with essential research needs. In order to maximize the research investment, or more accurately, to justify the research cost, the wide diversity in the how, who, where, and why of pipeline operations must, to the greatest extent practicable, be rationalised and directed. Only in this way can the industry achieve the greatest benefit to the greatest number of industry participants, the customers they serve, and the public trust that grants them their “license to operate”.

Energy pipeline research will remain a viable and sustainable resource for the world’s vital energy lifelines to the extent it yields clearly recognizable benefits that translate directly to the corporate bottom line. Increasingly, the bottom line for energy pipelines is a function of the interplay between several core needs and opportunities, including:

• Sustaining and growing the productivity of pipeline assets operating well beyond their originally projected design life
• Building new pipelines to reconcile the rapidly growing demand for energy and the unconventional and more difficult to access sources of that energy
• Assuring the safety and environmental performance of pipelines in the presence of population encroachment and the intrusive activities it brings.

For 56 years the energy pipeline industry has collaborated on research to confront these issues and the needs they generate. The future success of this collaborative effort can only be sustained if it can provide solutions to the industry that generate value across the entire pipeline operation. That value is being assured through the research program of PRCI covering every aspect of pipeline operations conducted by its members in North America, Europe, Central and South America, and Asia, as well as the wider industry worldwide.

Productivity of Existing Assets
Although pipelines are a fixed element of the energy infrastructure, they increasingly need to be dynamic and flexible in terms of their purpose and their operation. This need represents both an opportunity and a challenge ­­– to maximize pipeline productivity in terms of what they transport, how much they transport, and the ability to vary throughput to create and exploit opportunities. Important near-term (one to four years) research that will help to assure asset productivity includes:

• Enhancing flow efficiency through the development of new materials and, for oil and petroleum product pipelines (“liquid pipelines”) the use of drag reducing agents to enable greater throughput without increasing use of fuel.
• Establishing methodologies that enable pipeline repair while the pipeline remains in service thereby avoiding costly shut downs and loss of service to consumers.
• Increasing the operational flexibility of underground storage assets to improve the deliverability of existing reservoirs and developing new down-hole damage remediation diagnostics and tools.
• Reducing fuel consumption per unit energy throughput at compressor and pump stations, including expanded options for cost-effective compressor engine pollutant emission reductions that will enable pipelines to reserve capital for system expansion and other productivity gains.

Pipeline Construction
The current boom in pipeline construction that is under way in both developed and developing countries merely reflects the larger reality of a global voracity for energy. As this demand grows, so too does the need to find new sources of production. Increasingly, these sources are being found in harsh environments of extreme climate, geology, and water depths.

But regardless of the location, the energy produced will travel by pipeline. Ironically, the challenges may be more difficult in the developed world where impediments to rapidly closing the demand-supply gap abound, from the lack of an adequately trained work force to growing difficulties in gaining regulatory approvals and permits. The role of research in enabling more efficient, cost-effective construction is significant and includes the following activities:

The role of research in enabling more efficient, cost-effective construction is significant and includes the following activities:

• Establishing the technical bases for use of risk-based alternative design methodologies, including strain-based design for higher-strength steels, to better match pipeline design to the operating parameters of the pipeline once it goes into service. One key goal is to enable faster, better, and more cost-effective pre-service welding.
• Developing tougher more damage and defect resistant steels and the means to lay and weld the pipe (including improved weld inspection) faster and at higher performance levels.
• Developing alternatives to pre-service hydrostatic testing to reduce the time, cost, and environmental impact currently imposed by hydrostatic testing by establishing holistic approaches that draw from recent improvements in pipe materials, manufacturing processes, handling, and construction quality assurance procedures.
• Developing novel construction techniques, including for harsh environments, that are more efficient, produce a smaller environmental “footprint”, and reduce the time from pipeline design to pipeline operation.

Safety and Environmental Performance
An unintended release of potentially dangerous commodities from an energy pipeline can lead to death, injury, economic and social damage, as well as long-term environmental harm. As such, the pipeline infrastructure is being held to ever-higher standards of safety and environmental performance, despite an historic record that makes it the safest and most environmentally sound mode of energy transportation. As the demands for improved system performance increase, the pipeline industry must find ways to meet expectations – its own and those who oversee or are affected by it – by the most cost-effective means.

The engineering standards that have underpinned pipeline systems and their safe operation have been greatly enhanced over the last 50 years by a strong industry commitment to research. Today that commitment is expressed in critical research addressing some of the industry’s most challenging issues, including:

• Methods to detect, measure, and evaluate defects and damage to pipelines primarily from human activity on and around the pipe.
• Methods to monitor, detect, and prevent the effects of encroachment on pipelines using technologies in, on and adjacent to the pipe and via airborne means.
• Methods to determine the remaining strength of damaged or corroded pipe, and from that determination to make sound, cost-effective and risk-based decisions on repair or replacement.
• The reduction of emissions from compressor engines to meet increasingly stringent emission control and monitoring requirements at lowest practicable cost thereby saving fuel and avoiding costly modifications or replacements.

The design, construction, operation and maintenance of energy pipelines are built on a solid foundation of research and technological innovation. Once that foundation was the recipient of substantial investment, now it must defend itself by optimizing its cost in achieving the value that the pipeline operator demands.

Certainly, rationalising research costs is not inherently a bad thing as it assures that research, like all other expenditures, must respond to the relevant business drivers facing a company and the industry. Increasingly, these drivers are universal. While pipeline operators will continue to face the challenge of reconciling the corporate expense for research, collectively the industry’s commitment to collaborative research continues to grow and strengthen. As the leader in energy pipeline industry collaborative research, PRCI recognizes the need and value of a leveraging mechanism for research planning, execution, and deployment. This mechanism has proven to be a cost-effective, technically sound approach for assuring that research results produce real value for the industry leaders who form the collaboration and the industry at large.

Pipeline Research Council International, Inc. (PRCI), is non-profit, membership-based corporation comprised of 39 operating pipeline companies on four continents, and is augmented by 14 associate members representing steel and equipment manufacturers, vendors, and service providers. George Tenley has served as President since 1999.