Pipeline sharing: Potential capacity analysis of biofuel transportation through existing pipelines

In response to resource depletion and tightening carbon emissions policies, the product oil is gradually being substituted by biofuels and faced with falling demand. A large number of studies have been done on the opti-mization of the biofuel supply chain, but few of them have considered the existing petroleum pipelines for policy reasons. Market-based reforms in the oil and gas industry have provided the possibility of pipeline sharing, whereby pipeline owners can use the remaining delivery capacity to transport other liquid fuels that are allowed into the pipeline, such as biofuels, thereby increasing pipeline benefits and reducing biofuel logistics costs. This paper develops a logistics optimization model considering multi-product pipeline scheduling from the perspec-tive of biofuel suppliers and proposes a pipe-rail transportation mode to assess the optimization potential of logistics costs. Finally, this paper verifies the feasibility of the proposed approach using a logistics system in a region of China as a practical case study and conducts a sensitivity analysis on whether changes in the demand for product oil and biofuels affect the choice of pipeline opening location, concluding that there is no effect within a 4-fold increase in biofuel production and a 0.78-fold decrease in product oil demand.

Automated summary

Due to resource depletion and tightening carbon emissions policies, there is a gradual substitution of petroleum products with biofuels, resulting in falling demand. While many studies have focused on optimizing the biofuel supply chain, few of them have considered existing petroleum pipelines for policy reasons. This paper presents a logistics optimization model that takes into account multi-product pipeline scheduling from the perspective of biofuel suppliers and proposes a pipe-rail transportation mode to assess the potential optimization of logistics costs. A case study conducted in a region of China verifies the feasibility of the proposed approach and concludes that changes in demand for product oil and biofuels have no effect on the choice of pipeline opening location within certain ranges.