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Pipeline - The New and Expanded Refined Products Pipes Criss-Crossing Texas

Texas consumes far more diesel fuel than any other state and almost as much gasoline as car-crazy California, which also has 10 million more people. The long-distance distribution of refined products within the Lone Star State is handled largely by tanker trucks, but in the past couple of years, midstream companies have been adding a lot of new refined products pipeline capacity, not just to help deliver diesel and gasoline within Texas — including the diesel-hungry Permian Basin — but also to move motor fuels to the Mexican border for export. And more diesel and gasoline pipe capacity is on the way. Today, we discuss the new and expanded refined products pipelines criss-crossing Texas.

Energy consumption by Texas’s transportation sector totaled more than 3.3 quadrillion Btus in 2017, the most recent year for which state-by-state data from the Energy Information Administration (EIA) is available, and it’s surely higher now, after another two years of economic expansion. (Vermont ranked last among the states, using only 48 trillion Btus to power all its bumper-stickered Priuses, Subarus and Volvos.) Distillate consumption in Texas — most of it ultra-low-sulfur diesel — is sky-high, averaging about 515 Mb/d, or nearly 22 MMgal/d, in 2017, including more than 350 Mb/d by cars, trucks and buses and upwards of 40 Mb/d by the oil and gas industry to power the motors that run drilling rigs, fracturing pumps and a host of other oilfield equipment. As for motor gasoline, Texas accounts for an even 10% of total U.S. consumption: more than 930 Mb/d, or about 39 MMgal/d. It must be all those Ford F350s and GMC Yukon XLs you see on highways throughout the state.

The problem is that while most of the state’s diesel and motor gasoline is produced along the Texas Gulf Coast, a lot of these fuels are consumed inland, scores or even hundreds of miles from coastal refineries. The most efficient, cost-effective means for transporting diesel and gasoline long distances is by pipeline, and while there are a number of pipes in place that move refined products to inland markets, demand for diesel and gasoline in these markets has been rising with population and economic growth. The good news from a cost and distribution-efficiency perspective is a number of existing pipelines have been — or are being — expanded, and a couple of entirely new pipelines are being added.

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