Let’s have a practical conversation about what to do with pipelines that have reached the end of their useful life. This is a bigger decision than many realize – one that impacts landowners, companies, and communities for decades to come.
Understanding Your Options
When a pipeline’s working days are over, you’ve got two main choices:
1. Pull it out (Recovery)
2. Leave it there (Abandonment)
Sounds simple, right? But there’s more to consider than meets the eye. Let’s break it down.
Taking It Out: The Recovery Approach
Think of this like recycling a valuable classic car – if it’s been well-maintained, there’s real value in those parts. For pipelines, recovery makes the most sense when:
The Good Stuff:
– You’ve got pipe that’s the right size (6-8 inches in diameter)
– The walls are still thick enough (about 1/4 inch)
– It was installed and maintained properly
– The steel quality holds up
– You can sell it in the secondary market
The Process:
1. Send out a small crew (usually 3-5 people)
2. Dig up the pipe carefully in sections
3. Clean it thoroughly (this is crucial!)
4. Cut it into manageable lengths
5. Transport it for rehabilitation
6. Fix up the land afterward
The real beauty? Good steel pipe still has significant value in today’s market. Plus, you’re leaving the land clean and ready for whatever comes next.
Leaving It Be: The Abandonment Route
This is the “out of sight, out of mind” approach. While it might seem easier and cheaper at first glance, it comes with some serious considerations:
The Challenges:
– Future construction projects could hit unexpected snags
– Landowners might try DIY removal (seriously dangerous)
– Environmental issues could surface years later
– Legal headaches if something goes wrong down the line
– Property values might take a hit
The Money Talk
Here’s where things get interesting. While abandonment looks cheaper on paper today, consider:
Short-term costs:
– Crew and equipment for removal
– Transportation
– Land restoration
– Rehabilitation facility processing
Long-term considerations:
– Potential liability costs
– Future removal requirements
– Impact on property values
– Environmental compliance
– Safety risks for future land users
Making the Right Call
The smart decision usually comes down to four key questions:
1. What does your contract require?
2. How much will removal really cost?
3. What could you get for the recovered pipe?
4. What risks are you taking by leaving it?
Real-World Example:
Picture this: You’ve got a mile of 8-inch pipeline that’s been in the ground for 40 years. It was well-maintained and installed properly. Initial quotes show removal might cost $100,000, but the recovered steel could be worth $80,000. Meanwhile, abandonment costs $20,000 today – but what about tomorrow?
Looking Ahead
The pipeline industry is changing. Environmental standards are getting stricter, and land use is becoming more intensive. What seems like the easy choice today might not look so smart in 10 or 20 years.
Smart companies are starting to think differently about pipeline retirement. They’re:
– Planning for end-of-life from day one
– Building removal costs into their financial models
– Considering future land use in their decisions
– Taking a longer view on environmental responsibility
The Bottom Line
Sometimes spending more now on removal can save massive headaches (and dollars) down the road. It’s not just about today’s costs – it’s about managing future risks and opportunities wisely.
Remember: A well-planned exit strategy for old pipelines is just as important as the installation plan was at the start. Whether you choose removal or abandonment, understanding all the implications helps make the right call for your situation.
Most importantly, take the time to gather good data before deciding. Test the pipe condition, understand your market options, and think hard about future land use. The extra effort up front can save you from costly surprises later.
After all, in pipeline decommissioning, like in most things, the cheap way and the right way aren’t always the same thing.
Why let unused pipelines drain your wallet with maintenance costs and ad valorem taxes? Instead, convert them into valuable cash flow! Contact Pipeline Equities today!
