U.S. government looks for ways to boost energy infrastructure

WASHINGTON Tue Feb 25, 2014 6:29pm EST

WASHINGTON Feb 25 (Reuters) - The Obama administration will look for ways the federal government could spur investment to improve infrastructure for transporting oil and natural gas supplies around the country, U.S. Energy Secretary Ernest Moniz said on Tuesday.

Booming shale production has led to record high oil and gas output, but Moniz has acknowledged recently that the nation's infrastructure, especially pipelines, has not kept pace.

Producers in areas such as North Dakota's Bakken region instead use railroads to move large quantities of crude oil, but a series of fiery accidents has raised environmental and safety concerns.

"We will be doing analyses that will lead to ... what actions the federal government might take to help stimulate that infrastructure build-out," Moniz told reporters at a Department of Energy conference focused on energy innovation.

The studies will be part of the administration's Quadrennial Energy Review, a task force report focused on infrastructure that was recently ordered by the White House in January, and due out by Jan. 31, 2015.

The high-profile derailments involving trains carrying crude oil have led to questions about oversight.

The Transportation Department issued an emergency order on Tuesday, tightening rules for crude by rail transport, the latest in a series of safety efforts.

Moniz told Reuters that pipelines are generally thought to be a safer way to ship crude oil but noted that pipelines can have bigger spills when things go wrong.

A shortage of pipelines has also led drillers in places such as North Dakota to burn as waste some of the gas produced during oil output.

This practice, known as flaring, releases millions of tons of polluting carbon dioxide into the atmosphere each year and represents lost potential revenue for producers.

The administration continues to consider whether to approve the Keystone XL pipeline, which would carry crude oil from Canada's tar sands region to the U.S. Gulf.

Keystone would also have an "on-ramp" allowing companies drilling for oil in North Dakota and Montana to feed their output into the proposed pipeline. (Reporting by Ayesha Rascoe; Editing by Ros Krasny and Ken Wills)

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