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US government to investigate boosting energy infrastructure

28 February 2014

US Energy Secretary Ernest Moniz has said the Obama administration will look at ways the federal government could spur investment to improve infrastructure for transporting oil and natural gas supplies around the country. At a Department of Energy conference on energy innovation in late February, Moniz told reporters that the nation's infrastructure had not kept pace with booming shale production.

Producers in areas such as North Dakota's Bakken region instead use railroads to move large quantities of crude oil, but a series of fatal accidents has raised environmental and safety concerns with this method of transport.

“The Bakken shale has gone from close to nothing to a million barrels a day in a very short time,” Moniz told Capital. “And the infrastructure certainly just isn't there, certainly in terms of pipelines to manage that.”

The studies will be part of the administration's Quadrennial Energy Review, a task force report focused on infrastructure that was recently ordered by the White House in January, and due out by January 31, 2015.

A number of high-profile derailments involving trains carrying crude oil have led to questions about oversight. The Transportation Department issued an emergency order on February 25, tightening rules for crude by rail transport.

Moniz acknowledged that there has been a “statistically high” number of oil train accidents in recent months.

Moniz told Reuters that pipelines are generally thought to be a safer way to ship crude oil but noted that pipelines can have bigger spills when things go wrong.

A shortage of pipelines has also led drillers in places such as North Dakota to burn as waste some of the gas produced during oil output.

This practice, known as flaring, releases millions of tons of polluting carbon dioxide into the atmosphere each year and represents lost potential revenue for producers.

The administration is also considering whether to approve the Keystone XL pipeline, which would carry crude oil from Canada's tar sands region to the US Gulf. Keystone would be linked to production sites in North Dakota and Montana, enabling companies there to feed their output into the proposed pipeline.

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