Texas Intrastate Pipelines: A Critical Component of the State’s Energy Network

Texas is at the forefront of America’s energy production scene with its intrastate pipelines, producing a remarkable 43% of U.S. oil, 25% of the country’s natural gas, and 26% of its wind-powered electricity, as of 2021. However, despite such robust energy production capabilities, Texas does face infrastructure challenges in effectively transmitting and storing all the energy it creates. We know this personally as a leader in midstream infrastructure building and operations.

Central to the efficacy and reliability of Texas’ energy network are its intrastate pipelines: critical infrastructure that transport fuel and natural gas throughout the state. Acting as the lifeline for Texas’ energy distribution, this infrastructure not only ensures the transportation of energy safely and cost-effectively, but also contributes immensely to the economy in the state, and in the U.S. as a whole.

In this article, we will delve into the crucial role Texas’ intrastate pipelines play in the state’s energy transmission, economic growth, and energy security. We will also discuss safety measures, environmental concerns, and the future of pipeline infrastructure in Texas. Read on to understand why these pipelines are more than just pipelines; they’re a critical component of Texas’, and indeed our country’s, overall well-being and future.

The Anatomy of Texas Intrastate Pipelines

What are Intrastate Pipelines?

Simplified, our intrastate pipelines, much like the name suggests, are confined within a single state’s borders. Think of them as the veins of Texas, ferrying oil, natural gas, and other energy forms right from where they’re produced, to where they’re processed, refined, or consumed.

By contrast, interstate pipelines traverse state borders, linking energy provisions across vast regions. The distinction extends to pipeline regulations as well. While federal agencies manage the cross-border interstate lines, Texas’ own Railroad Commission supervises the intrastate networks within the state.

Why Are Intrastate Pipelines Critical for Texas?

Economic Impact

Intrastate pipelines act as a financial backbone in Texas. Between 2014 and 2024, the Texas pipeline industry is expected to contribute $374 billion in total economic output. The industry’s vital work—safely transporting oil and natural gas—ripples out, boosting other industries and ensuring affordable energy for Texan households and businesses.

Energy Security

Texas’ pipelines play a pivotal role in the state’s energy security. The intrastate pipelines’ efficient transport of local oil and natural gas diminishes any overreliance on foreign shores for energy. Halting the pipelines’ growth might nudge both Texas and, by extension, the U.S. as a whole toward a tighter grip by overseas energy providers.

The Role of Intrastate Pipelines in the Local Economy

Job Creation

Intrastate pipelines play a dual role: they move energy and generate jobs. The future looks promising too, with forecasts pointing to the creation of nearly 2 million infrastructure-centric jobs from 2015 to 2035—many of which are pegged for the pipeline domain. These job opportunities span the gamut, from construction and maintenance to administrative professionals, thereby fortifying Texas’ economic vigor.

Revenue Generation

Both state and local agencies benefit immensely from the revenue produced by pipelines via taxes and other financial avenues. Each year, pipelines facilitate a labor income of $25.5 billion, inject $21.8 billion into the Gross State Product, and produce an impressive $2.2 billion in state and local taxes. Furthermore, for each mile of pipeline situated within a Texas county, an estimated $12,350 in property taxes is generated every year. These revenues, in turn, nourish public services. From schooling and roadway systems to medical care throughout the state, the lives of community members are enhanced as a result of these pipelines.

“The activities of the Texas pipeline industry, which include the transportation of hydrocarbons from sources of exploration and production to refineries and end-users, are one vital component of the substantial job creation, investment and overall economic growth of the state’s economy,” said Bradley Ewing, PhD, who holds the McLaughlin Endowed Chair of Free Enterprise and is Professor of Energy Commerce in the Rawls College of Business at Texas Tech University.

Ensuring Energy Security

Importance in Energy Distribution

Texas’ energy distribution is heavily anchored by its intrastate pipelines. As the state’s primary energy highways, the intrastate pipelines efficiently relay energy from production to end-users. The U.S. Energy Information Administration’s data from the summer of 2022 underscores this, revealing a record-setting electricity output from natural gas in Texas, that is yet being surpassed in 2023—a testimony to the irreplaceable function of the pipelines in meeting energy goals.

How They Fit into the Larger Energy Network

Intrastate pipelines in Texas act as a fundamental component of a more extensive energy network that includes refineries, power plants, and shipping terminals, natural gas distribution companies. While directly supporting the oil and gas industry, pipelines also play a subtler role in promoting renewable energy integration by ensuring a steady baseline power supply and access to natural gas storage, during times that the sun may not be shining, and the wind may not be blowing.

Redundancy and Reliability

System Resilience During Energy Crises

During an energy crisis, the redundancy and reliability offered by pipelines becomes particularly significant. The vast network of intrastate pipelines in Texas and their connectivity to a significant amount of natural gas storage in the state, offering a buffer during times of high demand or production slowdowns. With advancements like hydrogen storage coming into the picture, the system’s robustness only stands to further improve.

Environmental and Safety Concerns

Safety Measures in Place

Taking the lead in pipeline safety, Texas was the pioneer in instituting a pipeline integrity program. Alongside state rules, federal bodies like the U.S. Department of Transportation’s Pipeline & Hazardous Materials Safety Administration (PHMSA) play a safety compliance role. Among the protocols enforced are procedures for incident reporting, frequent monitoring, and regular upkeep checks.

The Environmental Debate

Pipelines, crucial as they are, frequently become the focal point of environmental disagreements. While some feel they propagate the fossil fuel cycle and, by extension, climate issues, others argue that natural gas pipeline growth encourages the replacement of coal fuel use with natural gas fuel that is 50% less carbon intensive, that upgraded pipeline networks can elevate our air standards, and that our safety and security is enhanced by reducing truck and train transfers of energy materials.  These pipelines are play a critical role in the development of carbon capture and storage infrastructure, again contributing to reducing carbon into the environment.

The Future of Texas Intrastate Pipelines

Innovations for Safety and Efficiency

There’s an ongoing endeavor to leverage the latest developments in tech and engineering for the enhancement of pipeline safety and throughput in the oil and gas industry. With the rise of drone surveillance, AI-driven leak detection systems, and superior construction materials, pipelines are poised to be more secure and dependable. The goal is to use foresight and technology not just to adapt, but to lead.

Frequently Asked Questions

What is the importance of Texas Intrastate Pipelines?

Serving as Texas’ energy lifelines, intrastate pipelines safely and efficiently move fuels and natural gas, acting as catalysts for state and federal economic prosperity and energy security.

How do intrastate pipelines differ from interstate pipelines?

Intrastate pipelines operate within the state of Texas and are primarily regulated by the Texas Railroad Commission. In contrast, interstate pipelines cross state boundaries and are regulated by the Federal Energy Regulatory Commission.

What safety measures are in place for Texas intrastate pipelines?

Alongside state rules, federal bodies like the U.S. Department of Transportation’s Pipeline & Hazardous Materials Safety Administration (PHMSA) play a safety compliance role.

What environmental concerns surround pipelines in Texas?

Environmental reservations about pipelines mainly stem from fears of leaks that might pollute terrains and waters. Simultaneously, there’s a school of thought suggesting pipelines may inadvertently bolster fossil fuel utilization, thereby accentuating challenges with climate change. However, an important reality is that natural gas pipelines are facilitating the the gradual replacement of coal-fired power generation facilities with much lower carbon intensive natural gas-fired power generation, for baseload power generation, as well as peaking power generation needs.