Oil Theft:
A $37 Billion ProblemThe numbers around fuel leaks and theft are astronomical when looking at individual problem areas, but are positively staggering when combined on a global scale. One source estimates that global losses in theft from pipelines and other sources top $37.23 billion:
While most assume that illegal taps are make-shift operations, many pipeline theft operations are incredibly sophisticated, involving secondary underground pipelines that route product miles away from the eyes of energy companies.
Revenue Loss from Pipeline Breaches in the U.S.Like fuel-theft, unintentional pipeline breaches are a real-headache for energy companies in the U.S. and abroad. Pipeline breaches can happen for a whole host of reasons, including corrosion,material failures, incorrect operation, excavation damage and natural forces, to name just a few.
If energy companies ignore these breaches, they do so at their own peril, and run the risk of facing the high costs of environmental clean-up costs, regulatory fines, lawsuits and damaged reputation.
According to the US Department of Transportation Pipeline and Hazardous Materials Safety Administration, corrosion accounts for 20% of significant pipeline incidents. The leak in the Alaskan tundra was reported to have been caused by internal corrosion that had created a quarter-inch hole in the bottom of the transit pipeline. The resulting leak meant that BP was forced to pay millions in cleanup and restitution costs, including $255 million to the state of Alaska.
Material and weld failure account for another 20% of the pipeline breaches. It has been reported that the Pegasus pipeline that leak near Mayflower has had seam failures during pressure tests.
The Mayflower leak has cost ExxonMobil more than $70 million in damages.
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