Energy Infrastructure

 

Introduction

America’s energy infrastructure is designed to safely and efficiently move raw products (crude oil and natural gas) from wellheads to processing and manufacturing facilities, through distribution centers to ultimately benefit consumers at retail outlets, homes and businesses. It is a vast integrated network of pipeline, rail, marine, and tank/terminal assets that works to seamlessly accomplish these tasks. Tesoro (TSO) and Tesoro Logistics LP (TLLP) continuously conduct these activities with three essential goals in mind: they are accomplished safely, responsibly, and efficiently.

iStock_000002021165SmallSpotlight on Infrastructure

The importance of America’s energy infrastructure in helping to sustain our nation’s economic prosperity is receiving increased attention. Dr. Jason M. Thomas, Research Director at the Carlyle Group (a $183 billion global asset management firm), appeared before Congress in 2015 to address how changing energy markets affect U.S. transportation needs, and explained:

Increased investment in energy infrastructure has the potential to boost near-term employment… but its real promise comes from its potential boost to long-run economic activity. The case for an energy based ‘reindustrialization’ in the U.S. depends not only on abundant reserves of low-cost natural resources, but also the infrastructure capable of transporting those resources seamlessly across the country.”

Congress is keenly interested in improving America’s energy and transportation infrastructures. The hearings that attracted Dr. Thomas’s participation were part of initiatives to further America’s energy and economic resurgence. Legislative proposals to advance the safe and efficient build-out of energy infrastructure are moving on Capitol Hill. Additionally, the President’s Quadrennial Energy Review contributed to this momentum by endorsing several important infrastructure initiatives. This endeavor gained new impetus with the Interstate Natural Gas Association of America Foundation’s April 12th release of a new “Infrastructure through 2035” report. INGAA’s study informs industry, policymakers and stakeholders about the dynamics of North America’s energy markets and the infrastructure needs to ensure that consumers benefit from abundant U.S. and Canadian natural gas, crude oil and natural gas liquids (NGLs).

INGAA’s analysis anticipates that natural gas infrastructure requires an additional investment of $290 to $376 billion ($333 billion midpoint) from 2015-2035. Natural gas infrastructure includes gathering and transmission pipelines, compressors, laterals, gas-lease equipment, processing, gas storage, and LNG export facilities.

A further $137 to $190 billion is needed for crude oil infrastructure investment and $43 to $55 billion for new NGL infrastructure in the next 20 years. Crude oil infrastructure includes gathering pipeline, lease equipment, mainline pipeline and pumping, storage laterals and tanks; natural gas liquids (NGL) infrastructure encompasses transmission pipelines, pumping, fractionation and NGL export facilities.

Midstream investment is projected to add $655 to $861 billion of value to the U.S. and Canadian economies and to annually employ 323,000 to 425,000 workers. While Midstream jobs are concentrated in the Southwestern and Northeastern U.S. and Canada, the economic benefits of these investments are nonetheless widely dispersed. Further, an additional $24 billion in capital spending is anticipated for integrity management and emissions reductions in the natural gas Midstream space over the next two decades.

The issues that follow exemplify some of the key components of America’s energy and transportation infrastructure that are designed to further the safe, environmentally responsible, and efficient movement of energy products to our nation’s businesses, industries, governments and consumers.

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