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U. S. pipeline firms see ethanol in future

U. S. companies are boosting efforts to see if shipping ethanol through pipelines can be a less expensive, safer alternative to sending it on trucks and trains.

Kinder Morgan Energy Partners, one of the largest energy pipeline companies in North America, said in early December it has started sending batches of the biofuel through a 170-km petroleum products pipeline in Florida.

In the first three months of 2009, it will seek another opportunity to modify one of its pipelines or pipeline systems to transport ethanol, Jim Lelio, a renewable fuels business development director at Kinder Morgan, said in an interview.

“This was the most simple, least complex of our pipelines,” Lelio said about the Tampa-Orlando line, adding that it was comparatively short and level. “The next step we take will be as similar to that as possible.”

Lelio said the Florida project was driven by demand from customers seeking to cut transport costs versus rail and trucks.

Despite slim profit margins, the U. S. ethanol industry is growing. U. S. mandates require oil refiners and blenders to mix 11.1 billion gallons (43.2 billion litres) of biofuels like ethanol into gasoline in 2009, up from nine billion gallons in 2008.

The mandates also require 36 billion gallons by 2002, but the economic crunch has led to skepticism that the goal can be achieved. The ethanol industry, at least, sees president-elect Barack Obama as a supporter of the industry.

Stress cracks

Many experts have said shipping the alternative motor fuel through pipelines is not safe because it absorbs water, threatening the integrity of the ducts and the fuel.

Raymond Paul, the government affairs director at the Washington, D. C.-based Association of Oil Pipelines, said the “prime concern” about sending ethanol through pipelines is that it can absorb excess oxygen causing a problem called stress corrosion cracking.

But he said companies have found ways to control that problem as well as water absorption. And research and development, partly funded by ethanol players in Brazil, the second-largest ethanol producer after the U. S., continues, he said.

In addition, high-profile train and truck accidents involving ethanol have recently occurred in Maryland and Pennsylvania, killing one driver and burning nearby cars and buildings.

Kinder Morgan got permits from the Department of Transportation and Lelio said the company was happy with its results so far. The company is shipping 100 per cent ethanol on the line about once a week between batches of gasoline. The ethanol takes about 36 hours to complete its journey on the 40.6-cm line.

Investment justifiable

It spent about US$10 million to modify and clean the pipeline and expanding storage at the duct’s two points in Tampa and Orlando.

“Ethanol is becoming a significant enough fuel that it would justify the investments pipelines need to make in order to transport it,” said Paul. Currently the fuel makes up about seven per cent of the U. S. gasoline pool.

In a larger project, pipeline companies Magellan Midstream Partners and Buckeye Partners were seeking federal guaranteed loans to build a US$3.5 billion line from the ethanol production centre of Iowa to the fuel-needy northeast. It would take 250,000 barrels of ethanol per day.

Magellan spokesman Bruce Heine said the companies envision the line could be completed by 2014 if the loan guarantees come through. Obtaining rights-of-way and permits and building the lines would take at least four years, he said.

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