Markets and Reuses for Recovered Line Pipe
If pipe is recovered carefully and marketed professionally, the returns for secondary pipe can be much greater than expected.
This article is included in this appraisal handbook to indicate the value of secondary pipe so that the appraiser does not use the term "salvage" to mean junk or scrap.
When we think of pipe that has been buried in the ground for ten, twenty or seventy or eighty years we think of corrosion, rust, and deterioration. That might be true in some cases, but if a pipeline has been laid properly, it can be in as good a condition as when it was rolled off of a steel mill rack. The key is in installation, care, maintenance and in some cases the product that has moved through the line at one time or another. Structural steel pipe is simply steel in a tubular form. The outside diameter can be from 1/4" to 72" and beyond. The wall of the pipe can be of virtually any thickness. The pipe is made either by rolling flat plate and then welding the seam or hollowing out a round piece of steel to make a seamless variety of pipe.
Structural usage means to use in structural methods to construct or use in the process of building or using the material for an integral purpose in the construction or structural building of something entirely different.
Almost anything that might need shoring up or strengthening can use steel pipe to lend support. These might be building foundations, bridge and highway support and highway construction. The Chinese purchased and used hundreds of thousands of tons of tubular steel or used line pipe in the initial building stages of the highway construction in that country.
There are several sources of structural secondary or used pipe. An important source is new manufactured structural pipe made specifically for a purpose. In this case, secondary or used pipe cannot work, as very controlled engineering must prevail. Example: the launch pad at Kennedy center or a new suspension bridge.
Sources for secondary pipe are:
- Leftovers and rejects from mill runs Most line pipe orders are made directly to a steel mill. There invariably are leftover or overages from that "run" that might have certain defects. These overages are sold into the "reject" market to distributors.
- Replacement pipe from pipeline jobs For many years, this source and mill rejects were the main source of secondary line pipe. Pipeline companies would essentially give the 'take up" pipe from a new lay job to the pipeline contractor to get rid of after take up. This is the case when a new 36" line is being laid to replace, for example, an under capacity 24' line. Replacement pipe is also available when lines are repaired or updated due to wear or obsolescence.
- Recovery from depleted oil and gas wells As these wells become non-commercial and reach depletion status and are no longer economically feasible, they are plugged and abandoned (P&A). The pipe that had been used to produce the oil and gas is extracted and available for reuse in the structural market or can be tested and rehabilitated and reused in other oil and gas wells.
Starting in the mid 1980's, Pipeline Equities began soliciting pipeline companies directly to purchase their "out of use, uneconomic, idled, and abandoned pipelines" for reclaiming and recovery and reuse in the structural market. This began a mini industry now made up of less than twenty companies that directly solicit these companies for that purpose.
One of the most common uses for steel structural pipe is in the piling industry. In this case the steel piles or pipe is driven into the ground, river bottom or ocean floor in order to bulkhead the shore line, form a foundation, or create a dock or facility from which to create stability. Through the use of the large piling hammers, the pipe is driven or hammered to give strength or prevent erosion.
Other uses are as follows:
- Drainage for ponds. Various diameters of pipe can be inserted at desired heights of a pond or lake bank to maintain certain water levels.
- Sinkholes or lower levels where subsidence exists Pipe is used to drain off excess water accumulations.
- Bar-B-Que or outdoor grills At least 2,000,000' used annually to manufacture these stationary and mobile cooking units. Mostly heavier wall 16', 20", 24" and 36' outside diameter secondary line pipe.
- Culvert for roads and drainage Millions of feet of 8" through 20" outside diameter used line pipe are sold in 10' to 16' sections for use as culvert or pass through for drainage under streets, driveways, and roads.
- Bridge work and substructures
- Hand and guard railing for bridges and crossing One small two-lane bridge in a subdivision might use four hundred feet of 4" through 8" secondary steel pipe.
- Cattle troughs At least 30,000 to 40,000' of 22" to 48" outside diameter line pipe is cut in half each year and used as cattle feed troughs. Cattlemen say the wider the better as the cows eat a mouthful and raise their heads and the feed comes out. It spills out on the ground with the use of narrower troughs.
- Fences and corrals Untold millions of feet of 2", 3" 4" and 6" pipe are used by farmers and ranchers throughout the United States. The pipe might be used for fence posts with wire between or the between might be more pipe connecting the posts to make the fence secure. In the case of corrals and feedlots, 50,000 to 100,000 feet can be used easily in a small operation. Eight inch pipe is popular for "corner posts on fence lines.
- Signposts and flagpoles Look at the supports for billboards along the highways. Look at he cylinder shaped base for floodlights along the city streets. Huge amount of large diameter pipe is used for this purpose in the sign industry.
- Play sets, swing sets Much pipe goes into the permanent variety of swing and play sets on America's playgrounds.
- Pole barns and sheds Many dairy, horse farms or regular farms use steel poles as frames for their barns, sheds and other livestock and and feed shelters.
- Mouse holes and rat holes Most every shallow onshore well that is drilled anywhere uses a mouse hole or rat hole. It is a 40-50 foot deep offset well beside the regular vertical drill hole. It is lined with large enough steel casing to allow the "Kelley" or apparatus that turns the drill stem in the hole a place to sit while connecting to another joint of pipe to be lowered into the hole. Approximately 600,000' of 16" to 20" outside diameter pipe is used for this application annually on oil and gas drilling rigs.
- Casing for shallow wells Onshore wells are required to set 200' to 1500' of surface casing for shallow wells to protect water sands. As much as 2,000,000' per year of this pipe (8 5/8" and 10 3/4") is used annually.
- Dredging Large amounts of 20" and 24" line pipe are used for dredging channels and canals.
- Road bore Contractors use large diameter line pipe for casing to lay under highways, creeks and rivers to run electrical and other pipeline through.
Almost anything that uses circular steel or steel in a tubular shape is game for used pipe.
We have seen heavy wall 8" used to build elephant fences, large diameter line pipe used to make pontoons for boats, and oil line converted to electrical conduit and fiber optic use.
In the early nineteen twenties, an eight inch line was laid near Cushing, Oklahoma to transport oil from a gushing flush producing oil well to a tank farm near Drumwright, Oklahoma. The wells in that field produced for several years and was taken up and moved to the great oil fields near Crane and McCamey, Texas in the Texas Permian Basin. The line was active there for many years and shut in about 2005. Pipeline Equities bought the line and removed it in 2008. Part of this line went to Viet Nam where it is used currently as a water line serving parts of a suburb of Danang and another 100,000' went to Mexico to be used as a line to move slurry from a copper mine.
The very best use for pipelines that have outlived their usefulness in the present locale is to rehabilitate the pipe and move it to another place.
The cases of Mexico and Viet Nam are a little out of the norm. the reality is this pipe and steel is in good shape and have more lives to live. We have taken up many hundreds of thousands of feet of pipe, machine cleaned the exterior, beveled the ends, straightened the pipe when needed and recoated the exterior. All that is left to do is deliver the pipe to the next job site. This can be 6", 8", 10" or any size suitable for gathering, trunk or transmission pipeline work.
Most all of the pipe mentioned above will eventually find it's way back to a scrap yard, the last resort for tubular steel. But there it is sorted, prepared and shipped back to the furnaces to be checked for chemical contents, reconstituted to the proper yield and strength via additions of proper additives to once again go back to use as plate or tubular steel.