Historically railroads have liked pipelines. Though they couldn't compete with them, they could haul the pipe needed to build high-density energy distribution systems unrelated to rail transport.
So, the question is whether the expected shift from traditional sources of energy, such as coal and oil, to natural gas will provide the same limited opportunities for inland barge lines.
The energy sector is a curious mixture of the geographic distribution of natural resources, technology and politics.
Traditionally, finding the stuff, extracting it, and then refining and distributing it have been the big issues solved by the integrated oil companies. The major integrated oil producers have done this very well. A decade ago, the super majors, Exxon , Shell and BP , made up almost half of the oil industry's market capitalization. Today, a host of upstart companies and service suppliers have eroded the super majors SSRq industry market capitalization to about a third.
A wave of new energy-related companies have helped boost exploration and production and provided a new source of capital infusion. Aided by technology, energy exploration and production has become much more sophisticated and more expensive. With big oil shifting to natural gas and alternative energy sources, the energy sector is consolidating. The traditional big oil companies are ripe with cash and have an appetite for more risky investments with potentially big payoffs such as deepwater and ultradeepwater offshore development, and recent land-based natural gas and non-traditional oil extraction development.
As big oil makes the move toward becoming "big energy," companies will have more room for market opportunities as they commit less to oil. Today, oil supplies most of our energy. But it has a finite life. It may last for several more decades, but not likely. I expect that traditional big oil will increasingly diminish as the shift to alternative energy sources gains steam.
The barge industry may realize cargo and revenue gains from this shift by hauling the pipe just as the railroads did. However, on the downside, there will be no natural gas barges out there and fewer traditional tank barges that are now used for oil and chemicals.