Oil and Gas Industry Seeks to Reframe Mindset on “Infrastructure”

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With the uptick in exploration and development resulting from rising oil prices, once again the task of getting resources from their (often rural) development locations to their ultimate destinations has moved to the forefront of the public mind. The President’s highly anticipated infrastructure improvement plan is set to be released soon, and many in the oil and gas industry are urging inclusion of policies that would boost the construction of pipelines for the transportation of oil and gas from the field to the nation’s refineries and from refineries to consumers.

Industry leaders are working on educating and persuading lawmakers in Washington that pipeline construction is just as important as highway construction. Many in the oil and gas industry are pushing for changes in regulation and policy that would simplify the way permits for oil and gas pipelines are issued and speed up the decision-making process to expedite pipeline construction.

While much of the nation’s supply currently is transported by truck or rail, the increased use of pipelines for transportation would be more cost-effective and safer than transport by truck or rail. Easing regulations and streamlining the permitting process would also drive down the costs of projects, allowing more projects to move forward. These changes could be a win-win situation for consumers and the industry.

Industry players already have signaled they are ready to spend more than $1 trillion of private funds on infrastructure improvements over the next twenty years. Without the changes to the way projects are proposed and permitted, that prospective investment in the U.S. economy is in question, as the money could be spent in other ways and in other places.

The President plans to unveil his infrastructure improvement plan as part of this month’s State of the Union Address. Many are hopeful that his remarks will include proposals for changes in pipeline regulation and approval, and, ultimately, that lawmakers will adopt such changes.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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