June 27, 2017

INFRASTRUCTURE: Clogged oil arteries slow U.S. shale rush to record output.

Pipeline construction often lags production booms by years – if proposed lines are built at all – because of opposition from environmentalists and landowners, topographic obstacles, and permitting and construction challenges. That forces drillers to limit output or ship oil domestically, usually by rail – which is more costly and arguably less safe.

The crimped production, in turn, costs the economy jobs, keeps prices higher for consumers and stymies the nation’s long-held geopolitical goal of reducing dependence on foreign oil.

Obstacles to pipeline construction are coming into sharp focus as resurgent shale firms, after a two-year downturn, are now on pace to take domestic crude oil output to a record in 2018, surpassing 10 million barrels per day (bpd), according to the U.S. Energy Department.

“Get the hell out of my way!” the wise man once said.

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