A wave of new midstream systems are sweeping across the U.S. as unconventional oil and gas development proves economic and producers seek to move production to market. Secondary to the buildout now under way is the growing awareness of legacy pipelines that are beginning to be perceived as obsolete. The number of miles of such pipelines is as yet unknown, but considering the decades of historical buildout, the quantity of such assets must be significant.

Also, even as new pipelines are installed, some contractors are finding known and unknown previously buried pipe along or near current rights-of-way. These systems present a challenge. Should the pipeline be left in place, removed and scrapped, or recycled into other purposes?

If other applications are not applicable, then the pipeline industry considers rehabilitation of this steel for its own use. The pipeline-recovery industry resells into the structural market, for the most part, but this process could involve underusing a valuable asset.

In this era of high commodity costs, it seems imprudent and wasteful not to rehabilitate pipelines through recovery and recycling. New 8 5/8-inch-diameter steel pipe can cost up to $25 per foot. That same size and grade can be excavated for less than a third of the cost. A company should consider removing a pipeline that has outlasted its usefulness in one location and move it to another.

The best way is to cut the pipe in 40- to 45-foot sections, because most truck trailers can carry these lengths. Source: Pipeline Equities

Pipe recovery

Case in point: In 1920, an 8 5/8-inch-diameter pipeline was laid near Tulsa, Oklahoma, to transport crude oil from a newly discovered field to a tank farm 40 miles away. The field had flush production initially, but was depleted within a few years.

When the pipeline was originally laid, it was spread out in 20-foot sections, kicked off of wagons pulled by teams of mules into a pre-made ditch. Individual joints were screwed together at 20-foot intervals and tightened with chain tongs to hold "back up" and 48-inch pipe wrenches with a "cheater," or three-foot extension of 2 ½-inch-outside-diameter pipe on the end of the wrench. This would allow more than one person to tighten joints.

The result was a pipe collar showing on the outside of the pipe to indicate a connection at every 20 feet of pipeline. When the pipeline was recovered in Oklahoma, the pipe often disconnected during attempts to pick it up from the ditch. It was transported to Texas to move crude oil from new wells to a tank farm.

Around the late 1920s, acetylene welding, a stronger and simpler jointing method, was introduced into the pipeline industry. Acetylene welds were strong enough to keep the needed pressure on the pipeline for low-pressure crude transportation, though they were not as strong as the wall of the pipe itself.

Acetylene welds eliminated the need for two or three men manhandling large pipe wrenches and chain tongs. When recovered pipeline was sent from Oklahoma to the Permian Basin of Texas to be reinstalled, the old collars and threads were cut off and beveled in order to facilitate the new acetylene weld jointing technique. The line was then re-laid, in 1928, in Crane, Ward and Winkler counties in Texas.

This pipeline later went through a succession of three owners and was ultimately purchased for salvage in 2007. Despite some wear, the pipeline had the qualities of good grade-B steel. The thickness of the wall of the pipe was intact and had very little corrosion. It was suitable for transport of slurry from a copper mine to the disposal site nearby. Today, the Mexican company that owns the mine expects to use the slurry line for as long as the mine is in operation.

Meanwhile, workers recovered an additional 30-mile section of this line and shipped it to Vietnam to be used as a water transportation pipeline near what is now Ho Chi Minh City. It will probably be used there for another 40 years.

This steel pipeline that was manufactured at least 89 years ago has been through four incarnations. Eventually, when the copper mine is depleted, this pipe will be recycled once again, until one day it will end up as scrap to be molded into plate, sheet and coils for another round of uses.

The pipeline industry should consider rehabilitation of steel for its own use, while the pipeline-recovery industry resells into the structural market.

In 2008, Pipeline Equities removed a 6 5/8-inch-diameter line in central Louisiana that had been in gas service for nine years. The field had been depleted and the landowner, who was using the land for timber, wanted the pipeline removed. The pipe was moved to a recovery yard in Houston where workers cleaned the paraffin out of the interior of the pipe, straightened where needed, and removed the fusion-bond epoxy coating from the exterior. Pipeline Equity then beveled the ends and sent the pipe on to a recoating yard. It is now in service as a gas transmission line in Oklahoma. Even with all of these steps, the customer saved 30% off new pipe prices.

Savings incentives

A compelling reason for pipeline rehabilitation is to eliminate cost. Few companies are aware of the real costs associated with maintaining an idled pipeline.

Miles of idled pipes will never be used again, but must be regularly patrolled by employees. Other companies must pay contract agents to answer "One Calls" or Department of Transportation calls to flag lines for construction or other identification purposes.

If a company continues to maintain these rights-of-way via mowing and general signage upkeep, the costs can be extraordinary. In many states there are judicial districts that assign ad valorem taxes, school taxes, county taxes and state taxes to these properties. The incidental pipeline relocation expenses due to highway and subdivision expansion are all too often passed off as necessary costs of doing business.

Also, a long-standing practice of pipeline companies has been "in-place abandonment." It is simply a way of reducing responsibility for maintenance and care, taxes and upkeep while still maintaining ownership of idled pipelines. While this is a positive practice for pipeline operators, federal and state lawmakers and regulators are seeking to end the practice and clearly define the requirements for abandoning or idling these out-of-use pipelines. Idled pipelines pose potential hazards to landowners and land users.

Future regulations might require the removal of pipelines if they are labeled abandoned or if they are idled and show intent to abandon due to cessation of usage, lack of maintenance, removal of signage, failure to pay or reducing taxes due to lack of use. At a minimum, companies will be required to identify dormant pipeline inventory and obtain permission from landowners prior to abandonment procedures of any sort.

Occasionally, a side boom can be used to lift the pipe out of the ditch. More often, the pipe is cut in 100- to 200-foot sections and dragged out of the ditch by a dozer. Dragging out too long a length will cause the pipe to bow or bend.

After the pipe is removed, a dozer is used to backfill the excavation ditch and dress up, or remediate, the right-of-way. A cutter cuts the pipe at the connections in 20-, 30-, 40-, or 60-foot intervals, depending on where the welds exist. The best way is to cut the pipe in 40- to 45-foot sections because most truck trailers can carry these lengths.

The cutting can be done by torch or by saw, depending on the preferences of the supervisor as well as the fire hazards that might be involved. A front-end loader can be used to load the pipe on trucks for transport. Alternatively, special forks can be mounted on the track hoe to load the trucks instead of engaging a front-end loader on location.

Sometimes the loader is not efficient due to its rubber tires. Tracks work best on most rights-of-way. Most pipelines can be removed with two or three pieces of equipment per crew with proper supervision and competent personnel.

Perhaps the most significant part of the process is the relationship with landowners. By the terms of most right-of-way contracts, the pipeline owner has the right to remove, repair, ingress or egress. Skilled, experienced right-of-way agents should be involved in negotiating such rights-of-way contracts.

For a company that owns an easement, the best method is to return the right-of-way back to the landowner at the company's expense. Pipeline Equities has found this to be the best method for working with landowners. They would like to have clear unencumbered title to their property.

Most pipelines can be removed with two or three pieces of equipment per crew with proper supervision and competent personnel. Source: Pipeline Equities

Varied uses

The uses for tubular forms of steel are many. Hundreds of thousands of tons annually go to the piling markets to reinforce anything that needs to be strengthened. For example, additional support along shorelines, piers for buildings and bridge supports use tubular steel derived from rehabilitated pipeline. Millions of tons went to China in the 1980s and 1990s for use in the foundations of its extensive highway network.

More than 150 companies exist to resell secondary and rehabilitated line pipe to the ultimate customer. For example, some companies only sell 16-, 18-, or 20-inch pipe for casing for contractors setting pipe in "mouse holes" or "rat holes." This application alone consumes more than 25,000 feet per month of these sizes in the U.S.

Another 150,000 feet per month of 8 5/8-inch and 10 ¾-inch line pipe are used each month in surface casing applications for oil and gas operators. Surface casing protects shallow-water sands in initial drilling operations onshore. Elsewhere, some companies sell product to piling contractors, while others sell pipe used for culvert for roads and bridges.

Still more is used in farm and ranch operations for corrals and cattle guards at gates. Other users need center posts and columns for fences, barns and other buildings. Flag poles, bridge and guardrail applications consume thousands of tons annually.

Recently, Pipeline Equities shipped 4,800 linear feet of 80-year-old pipe to a zoo to be used as a retaining wall to protect elephants in their habitat.

Hundreds of other uses exist for steel in tubular form. Unless prices get exceedingly high, scrap is the last resort for pipeline recovery applications. n

David Howell is a senior right-of-way agent and has International Right Of Way Association with Environmental and Acquisition/Negotiation certifications. He is the author of the Pipeline Recovery Manual and Pipeline Appraisal Handbook. Howell's company, Pipeline Equities, brokers and appraises pipelines.