When oil is discovered, it is a good thing for the drillers, but for the company to make money they have to move the oil from the drill site to the refinery. They can ship by truck, but the cost and amount are too small for a large well. Railways ship oil and that is a very useful method, but the least expensive for the company is an oil pipeline. If and when the oil field is connected to the pipeline system, then everyone is happy because if there is one producing oil well there are more. If you examine the oil fields and then where the pipelines go you will see the US has a very connected industry.
The wonderful thing about pipelines is they deliver the oil to the refineries and the refineries can be located in one part of the country and the oil in another. The majority of refinery capacity is south of Houston and not far from New Orleans.
In an article by Erwin Seba of Reuters, the bad thing about pipelines is every once in a while, the pipelines leak. Generally, if you want a safe profitable company, examining utilities and pipelines is a good step. The companies are regulated, spend millions on ensuring the pipelines are monitored and tend to act rather quickly to stop and clean up the mess.
In Kansas, the Keystone pipeline transporting heavy crude oil coming from the Oil Sands of Canada and heading to a refinery on the Gulf Coast leaked. 14,000 barrels leaked and the cleanup is expected to take weeks or months. In the world of drones to take picture of events, the pictures show the oil leak.
The leak in the pipeline happened on a farm near Washington, Kansas and more than 400 people from contractors, the pipeline company, state and local officials all working to fix the fields. !4 landowners are being compensated for work on their fields. Bill Pannbacker the farmer where the majority of the spill happened, does not expect to see grass on the pasture for 2 or 3 years.
Linking to dividend paying stocks, all companies do both good and not so good things in their normal corporate life. In this example, the pipeline transports oil to the refineries which produces gas for all of us. Sometimes a spill happens and when it does it is important to see what the reaction of the company is? how does the company handle the bad aspects? if they meet your standards then you can keep your investment. if they do not meet your expectations, then it is time to seek alternatives.
There are more questions than answers, till the next time – to raising questions.