U.S. PIPELINE

TRANSPORTATION OF BIOFUELS

Eric Gustafson

Senior Vice President

Buckeye Partners, L.P.

On behalf of 

The Association of Oil Pipe Lines
Discussion

• Overview of US Pipelines

• Bio-diesel and Pipelines

• Ethanol and Pipelines
U.S. Crude Oil and Refined Products 

Pipelines
U.S. Refined Product Pipeline System

• Approximately 100,000 miles (160,934 

kilometers)

• Majority located in Central, Gulf Coast and 

Eastern regions of the U.S.

• Transport over 6 billion barrels annually
U.S. Pipeline Fundamentals

• Pipelines are the most cost efficient and safest 

method of on-shore transportation of liquid 

fuels

• In U.S., most Product Pipeline capacity is 

common carrier (vs. Proprietary Pipelines)

• Product batching of multiple fuels

• Today, ethanol is transported via truck, rail, 

barge and ship; biodiesel is transported 

predominantly by truck and rail. 

– Blending takes place at terminals
U.S. Biodiesel Industry Today

• 165 plants in operation

• 1.8 bgy (6.8 b liters/year) capacity

• 80 plants under construction

• 3.2 bgy (12.1 b liters/year) capacity by end of 

2008

• 6-8% of U.S. highway diesel

• B20 – 20% Biodiesel Blend – 30% market share 

required

Source: National Biodiesel Board
U.S. Biodiesel Plants

Source: National Biodiesel Board
U.S. Biodiesel Demand

Source: National Biodiesel Board
U.S. Biodiesel Pipeline Status

• Neat Biodiesel requires special handling

– Pour Point

• Several tests conducted (B20)

• Trail back biggest concern

– Assure Jet Fuel not impacted
U.S. Biodiesel Summary

• Supply exceeds demand

• Diesel pool can easily accommodate expected 

supply

• Pipeline issues under review / tests

• No regional imbalances
U.S. Ethanol Industry Today

• 122 biorefineries

– 75% of production in 6 states

• 6.4 bgy (24 b liters/year)capacity today 

• 74 Ethanol Biorefineries under construction

• 7 Ethanol Biorefineries under expansion

• 12 bgy (45.4 b liters/year) at end of 2009

• Congressional / Administrative Goals

– Double ethanol consumption in 10 years

Source: Renewable Fuels Association

States with 100 mm gal/year 

Production
Need to Move Ethanol from Producing 

Area to Consuming Area

• Current Logistics

– Trucks

• 8K gallon (30.2K liter) Capacity

– Railcars

• 30K gallon (113.5k liter) Capacity

– Barges

• 10 to 15Kbbl Capacity
Volume Comparison

One 16” pipeline can take 

continuous flows on a daily 

basis equal to 15 barges
Ethanol and Pipelines

• As domestic and international ethanol 

production continues to increase, the 

economic viability of domestic pipeline 

shipments increases as well

– Introduction of ethanol into the pipeline system 

presents challenges and opportunities

• Challenge is related to the potential incompatibility of 

fuel grade ethanol with existing pipeline infrastructure

• Opportunity is related to new commercial 

opportunities, especially for ethanol blends
Technical Issues

• Technical challenges to pipeline transportation 

of ethanol

– Moisture (product quality)

• Test batches

– Materials compatibility (steels and elastometers)

– Stress Corrosion Cracking (SCC)

• SCC is one of the most critical technical issues 

to overcome

– Significant research and development program is 

underway 
SCC Research and Development

• Focus on three areas:

1. Assess ability to transport low level ethanol blends (10, 20, 30 

percent) and batching practices on existing pipelines without 

significant modification and no SCC (findings within 12 months)

2. Better understand the environmental and stress conditions 

under which SCC can be expected, including contaminants, 

chlorides, and other impurities in fuel and feedstocks. Develop 

SCC mitigation strategies, such as inhibitors, oxygen scavengers, 

deaeration to remove dissolved oxygen and lower the corrosion 

potential. (findings within 12 months)

3. Changes in new pipeline design that would be appropriate to 

mitigate integrity threats associated with transportation of fuel 

grade and neat ethanol (findings within 24-36 months)
SCC Research and Development

• R&D program at Pipeline Research Council 

International (PRCI) (Contact: Ken Lorang, 

Senior Project Mgr, klorang@prci.org)

– Conducted by CC Technologies (Contact: Patrick 

Vieth, SVP, Integrity and Materials, 

patrick.vieth@dnv.com)

– International support

– Support from the U.S. Department of 

Transportation
Other Factors 

• Economics

– A pipeline from the Midwest to East Coast would be a multibillion dollar project

– Ability to obtain long-term shipper commitments

– Pipeline rates are expected to be competitive with current 

transportation modes

• Logistics

– Individual productions facilities relative to volumes necessary to 

support a pipeline

– Need for gathering infrastructure to support interstate pipeline 

transportation

• Regulatory authority

– Need for clarity of federal guidelines on safety and economic 

aspects of pipeline transportation of ethanol
Conclusion

• Pipelines remain the most reliable, safe and economic 

mode to transport large volumes of liquid fuels

• With continued increases in domestic and international 

ethanol production, pipelines may provide an 

economic method of transporting ethanol

• Technical challenges have to be overcome, primarily 

SCC

• Investors need assurance that ethanol is long term 

component of gasoline in the United States
Contact Information

Eric Gustafson

Senior Vice President

Buckeye Partners, L.P.

Email: EGustafson@buckeye.com

Phone: (610) 904-4235

Raymond Paul

Director, Government Affairs

Association of Oil PIpelines

Email: RPaul@aopl.org

Phone: (202) 292-4509