Pipesharing: economic-environmental benefits from transporting biofuels through multiproduct pipelines

Abstract

As the most potential renewable energy, biofuel energy has become the fourth largest energy source after coal, oil and natural gas. Promoting the extensive application of biofuels is an effective way to reduce carbon emissions. Pipeline is one of the most efficient ways to transport large-volume fuels over long distances. Transporting biofuels through the existing multiproduct pipelines is in line with the requirements of environmental protection, energy saving and low-carbon economy. To determine the surplus capacity of pipelines in a certain period is the premise of adopting this mode to transfer biofuels. This study develops a method for estimating the capacity of pipelines for biofuel transport, accounting for clients’ demand for petroleum products, the capacity limitations of existing pipeline equipment and transport cycle of biofuels in the pipeline. Using the data from practical pipelines, their monthly surplus capacity is within the range of 15 × 104 to 80 × 104 m3. It is turned out that pipeline length, transportation capacity of power equipment and market demand of refined products are the dominating factors for surplus capacity. Assuming varying demand on refined products, sensitivity analysis is conducted to compare the economic-environmental benefits from sharing pipeline’s surplus capacity with biofuel shipment. The simulation results show that pipeline sharing brings about win–win effects for both petroleum and pipeline companies. The petroleum company has a reduction of 1.2%–34.9% in carbon emissions and 0.3%–14.7% in logistics cost, while the pipeline operator increases revenue by 0.4%–33.7%.