USD/BTC = $106,724
Block 919,678
TL:DR
Non-PaywallSharply higher costs in all categories—particularly material, which roughly doubled—increased the estimated price of building land pipelines by about $4.5 million/mile, to a record $12.1 million/mile. Estimated miscellaneous costs increased by almost two-thirds, about $1.8 million/mile, and labor costs also rose, by nearly $1.2 million/mile.“Contingencies” are the most variable of the costs included as miscellaneous, with the amount set aside for such purposes typically reflecting changes in market uncertainty.
Expected right-of-way costs were 88% higher this year than last.US oil and natural gas pipeline operators’ net incomes also pushed into record territory. Gas pipeline earnings rose 8.75% to mark a third straight year of gains after 2 years in a row of decline and reached a record $11.2 billion, eclipsing the $10.8 billion earned in 2019 (Fig. 1).
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Natural gas pipeline companies in 2024 grew revenues by roughly $2 billion (6.4%), marking an eighth-straight year of growth. Net income’s growth was even stronger; up 8.75% or roughly $900 million, a third-consecutive annual increase.
Oil pipeline earnings continued the return to growth started in 2021, climbing roughly $3.3 billion (14%). Revenues rose about $2.8 billion (7%) for the second year in a row (Table 2).
Improved liquids pipeline earnings came on the back of an 11.75% increase in crude oil deliveries, product shipments actually shrinking 0.14% year-on-year.
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Variations over time in the four major categories of pipeline construction costs—material, labor, miscellaneous, and right-of-way (ROW)—can reflect both more general economic and political trends and the specifics of a given place and time.Materials can include line pipe, pipe coating, and cathodic protection
. A breakdown of 2024-25 costs shows:
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Material—$1.9 million/mile, roughly twice the $934,979/mile for 2023-24.
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Labor—$4.6 million/mile, a roughly $1.15-million/mile increase from $3.45 million for 2023-24.
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Miscellaneous—$4.9 million/mile, up about $1.9 million/mile from the roughly $3-million/mile estimated cost for 2023-24.
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ROW and damages—$735,277/mile, up from $391,002/mile in 2023-24.
Table 4 lists proposed pipelines in order of increasing size (OD) and decreasing lengths within each size.
The average cost-per-mile for the projects rarely shows clear-cut trends related to either length or geographic region. In general, however, the cost-per-mile within a given diameter decreases as the number of miles rises. Lines built nearer populated areas also tend to have higher unit costs. Additionally, road, highway, river, or channel crossings and marshy or rocky terrain each strongly affect pipeline construction costs.My Thoughts 💭
Looking at the costs for pipeline construction I don’t see where AI is going to disrupt this sector and bring costs down. The costs have exploded making development and access to energy ever more expensive but oil and gas are setting revenue records. Maybe more companies in the space and bring prices down.