Gulf Governments Plan Oil Pipelines
JAMES CALDERWOOD

DUBAI, United Arab Emirates — Gulf governments are planning oil pipelines that would bypass the world’s most vulnerable energy choke point, the Strait of Hormuz, aiming to avoid possible Iranian threats to global oil shipments.

If built, two pipelines could ferry as much as 6.5 million barrels of oil a day around the strait, an amount equal to nearly 40 percent of the daily exports currently shipped through the narrow channel at the entrance of the Gulf.

This Associated Press story is being picked up by many news organizations. Clearly, if this plan to were come to fruition, it would remove Iran’s potential for chocking off oil shipments through the Gulf. What’s not noted in the article, however, is the enormous economic impact it would have on current oil facilities such as the Ras Tanura oil head and industrial cities like Jubail. Perhaps some of the jobs and employees could simply be relocated, but it will be a massive upheaval. Like most changes, there are good and bad effects. It’ll be up to local governments to find the best balance between them.