Answer to Question #149766 in Macroeconomics for Karabo Maluleke

Question

Discuss any five threats faced by the pipeline industry. ​​​

Answer 1

The transportation of gas and liquid through long pipes over places is known as pipeline transportation. A large volume of materials and fuel can be transported via pipelines. It ensures quick delivery of goods in all weather conditions. The materials can be transported without much interruption from place to place. With the advent of technology, sophisticated measures are taken to ensure the safe transportation of goods.

Even though the pipeline is a convenient form of transfer of goods, yet the industry faces certain problems which are explained below:

1. Shortfall of infrastructure:

New pipelines are being built in areas where there already exists oil and gas infrastructure. But these existing ones are too old to satisfy the actual production and consumption. So, the pipeline must be built in such a way that, it also does satisfy the future requirements, or it should be constructed in such a way that easy replacement is possible.

2. Vast distribution:

Another major problem faced by the pipeline industry is the borderless distribution of the pipeline. This poses a problem when the right of way to build the pipeline is to be secured. The local landowners find it tedious to stop the pipeline from being built.

3. Difficult Terrain:

The terrain poses challenges in the construction of the pipelines such as extreme weather, mountainous terrain, elevation changes etc. Adverse terrain may affect the construction of pipeline.

4. Political and legal issues.:

The construction of pipelines involves a lot of political jurisdictions. There are different rules and regulations for the development of pipelines. Catering to these will be a great problem, since they are a bit too complex. The business processes become complex as a result, and the project will be delayed.

5. Risk of spills:

There is a huge risk of spills. The pipelines will require effective maintenance to extend its quality and lifetime. Proper technology must be developed to reduce wastage and spills.

6. Heavy investment:

The pipeline industry requires huge capital investment. Heavy investment is required in case of pipeline, their design and installation. Sophisticated technology is to be used to install them underground.