Pipelines, NEC

According to 2009 statistics from the U.S. Census Bureau, there were 39 establishments primarily engaged in the operation of pipelines for the transportation of coal slurry, metal ore slurry, and phosphate slurry in the late 2000s. Together, these establishments generated $397 million in revenue and employed nearly 350 people. This industry's employment comprised only a scant percent of the total employment for the broader pipeline industry, which mainly operated petroleum and natural gas pipelines.

Most of the U.S. pipelines operated by this industry transported coal suspended in water (crushed and mashed coal mixed with water creates slurry). Slurry systems are a competitive method in cost for transporting coal. The expense associated with building roads and railroads to the mouth of mines can be prohibitive, and the slurry alternative requires a smaller capital investment. As such, the Black Mesa Company began operating a coal slurry line in 1970 that transported coal 273 miles from a mine in northeast Arizona to a power plant in Laughlin, Nevada. This became the prototype for most slurry pipelines, and by the late 1990s, pipelines stretched as long as 1,500 miles.

Coal slurry technology involves transporting pulverized coal suspended in water and pumped through pipelines. From the mine, the coal is crushed, formed into slurry, suspended in water, and pumped through the pipe to the power plant. At the end of its journey, the slurry enters storage tanks, where various processes remove the water. The final result is coal that can be used for burning.

Modern slurry systems were initially developed after World War II; although coal is the most common commodity transported via slurry, other concentrates--iron-ore concentrate, copper ore, phosphate-rock concentrate, limestone, and the mineral gilsonite--are transported as well. The South American Alumbrera pipeline, completed in early 1998, is the world's longest copper ore concentrate slurry pipeline, traversing 312 kilometers through the Andean desert, vast grazing lands, rain forests, and flat pampas.

In recent years, pipelines have been built for the transport of carbon dioxide, hydrogen, ethylene, and other liquids. In 2005, the Pipeline and Hazardous Materials Safety Administration (PHMSA) was established within the Department of Transportation, following legislation passed and signed into law in 2004, to oversee the safety of almost 1 million daily shipments of hazardous materials by all modes of transportation (about 80 percent of which is shipped by pipeline). The agency also oversees the nation's pipeline infrastructure that accounts for 64 percent of the energy commodities consumed in the United States.

From the late 1990s into the early 2000s, the industry remained small but stable. Nearly all the firms in the industry are either small companies focused exclusively on pipeline transportation or larger firms primarily involved in other lines of business. The clear industry leader is ONEOK Inc., which became general partner of Northern Border Partnership LP in 2006 (renamed ONEOK Partners). In 2007, ONEOK Inc. reported more than $16 billion in sales and ONEOK Partners reported $7.7 billion. The company managed the Black Mesa Coal Slurry Pipeline, which originates at the Black Mesa Mine. In operation since 1970, the pipeline has a capacity of 5 million metric tons per year and produces nearly 5 million tons of coal annually.