Growing Need For Pipelines Strains Manufacturers

September 2012, Vol. 239 No. 9

Pipe manufacturers are having problems keeping up with the rapidly rising demand for new oil pipelines in the U.S. heartland, according to Reuters.

Existing infrastructure was built in projects that rarely required extensive manufacturing capacity. However, the shale oil boom has changed that dynamic as producers are trying to move oil from states that previously had little effect on the industry, such as North Dakota and the Bakken Shale. Now pipeline companies need key components such as valves, driving up prices for other projects, Reuters reported.

“New infrastructure is going to be critical to push these commodities around the country where they need to be,” David Seaton, chairman and CEO of Fluor Corp., told Reuters. “It’s going to be the lifeblood of economic growth for my lifetime.”