The True Cost of Pipeline Protection

BUILDING PIPELINES IS EXPENSIVE.
That is likely not news to you, but it bears repeating to set the stage for a conversation about the ways in which pipelines are protected. Warning tape, or underground utility tape, is one of the best tools to protect the large investment of a buried pipeline.

How Expensive?
The average cost per mile for a high pressure, natural gas transmission pipeline in 2015-2016 was 7.65 million dollars. Costs vary widely depending on the circumstances of a project, but the expenses can be broken into four categories:

• Right of Way (ROW): Right of Way costs remain consistent across varying lengths/ widths of pipe. ROW costs attribute 6% of the project’s total cost.
• Labor: Labor costs are highly variable depending on location, available workforce, and terrain. Labor accounted for an average of 47% of total project cost.
• Materials: Materials made up 12.5% of total project costs, a percentage that has been steadily falling in recent years.
• Miscellaneous: Surveying, engineering, supervision, contingencies, telecommunications equipment, freight, taxes, and regulatory filing fees all fall into the miscellaneous category. These costs made up 34.5% of total project cost.

How Pipelines and People are Protected
A relatively small part of the material costs (12.5% of total project cost) is dedicated to damage prevention tools. One of the most commonly used is warning tape, or buried warning tape. Warning tape is a ribbon of brightly colored material placed belowground about 12 inches above the utility. It offers a last and crucial layer of protection if potentially damaging excavation occurs over the buried utility. In practice, a spotter watches all excavation and spots the brightly colored tape either in the spoil or as it is lifted from the ground.

There is a wide range of warning tape characteristics, ranging from material differences that affect strength to metal lining that allows the tape to be surface-detectable. These feature differences result in price differences across the market – cost differences that can look significant until they are compared in the context of both the total project costs and the potential costs of damages.

The Cost of Damages, the Value of Protection
The important metrics to pay attention to are the cost of buried warning tape in relation to the potential cost of damages, and to the total cost of the project. Assessing the cost of marking tape or signal tape without the context of those two factors, damage potential and total cost, does not allow for a fully informed decision. Figure 1 illustrates just how crucial the context of the sheer scale of the project (in this case a theoretical 10-mile project) is in choosing a buried warning tape. For this example, we use a standard non-detectable tape that sells for $25 per 1000’ roll and a full-featured warning tape selling for $300 per 1000’.

To simplify the concept, it is the equivalent of building a $300,000 house and not paying for a one-time $56 insurance policy.

Then of course there are the potential costs of damages to consider. Pipeline damages have a multitude of consequences, including the material and labor costs of the repair, hefty fines, and the less calculable damages of negative press. Further entrenched in this context, the initial costs of full featured warning tape seem miniscule.

Yes, pipelines are expensive. Repairing pipelines and company reputations is expensive, too. Making material choices with damage prevention in mind protects pipelines, investments, and people.

To learn more about full-feature warning tape, visit damageprevention.com/signaltape.