Keystone Project on Hold While TransCanada Weighs Three Options

[mentalfloss]

Keystone Project on Hold While TransCanada Weighs Three Options
Two of the options don't cross the U.S.-Canada border. Oil industry, state, federal officials wait and watch.

Official action on the Keystone XL pipeline review has virtually ground to a halt since President Obama rejected the pipeline permit.

The U.S. State Department can't proceed until TransCanada, the company that wants to build the project, files a new application. And Nebraska's environmental officials need further direction from the state or federal government before they continue rerouting the pipeline out of the fragile Sandhills.

That leaves the next step to TransCanada, which has been trying to get the project approved since 2008. Spokesman Shawn Howard told InsideClimate News that the company still intends to pursue the project, but it is now considering several options in addition to the original route.

Two of those options would avoid crossing the U.S.-Canada border. That means TransCanada wouldn't need approval from the State Department, which oversees energy infrastructure projects that cross an international boundary. "We have to decide what the new application will look like," Howard said. "That [decision is] ultimately made for us by our shippers and our customers."

Howard did not offer a timeline for when that decision would be made.

While TransCanada makes up its mind, Jim Smith, a Nebraska state senator, is urging the legislature to pass a bill that would allow Nebraska's Department of Environmental Quality to continue working on a reroute for the project, regardless of what happens in Washington, D.C.

Nebraskans spent years persuading lawmakers to move the pipeline out of the Nebraska Sandhills, which overlies the critically-important Ogallala aquifer. Citizens feared a spill would damage their land and water and affect the livelihoods of Sandhills ranchers.

"What I would like to see ... is that we do not have to wait for TransCanada to file another request with the federal government, that we can continue our review of Nebraska's alternative route even now," Smith told InsideClimate News.

TransCanada is considering at least three options, Howard said:

--It could re-apply for the complete Canada-to-Texas pipeline, which would run 1,700 miles from Alberta's tar sands to Texas refineries on the Gulf Coast and transport up to 830,000 barrels of crude oil per day.

--It could cut off the Canada connection and use Baker, Mon. as the pipeline's starting point, thereby eliminating the need for State Department approval. Instead of transporting heavy crude from Canada's tar sands, the pipeline would tap into the booming Bakken oil fields of Montana and North Dakota. Bakken oil was slated to fill 25 percent of the capacity on the original Keystone XL route, Howard said.

-- It could shorten the project even more by building from Cushing, Okla., eliminating not only the border crossing but also the section through Nebraska. Howard said this option would relieve the oil bottleneck in Cushing by providing additional pipeline capacity to refineries in Texas.


TransCanada's Goal Unclear

The Baker and Cushing options raise questions about TransCanada's eventual goal, said Martin Tallett, president of EnSys Energy, an international consulting firm that specializes in refining and oil markets. The company has prepared Keystone XL assessments for both the State Department and the Department of Energy.

Tallett said industry analysts are trying to figure out whether TransCanada views the shorter routes "as part of an eventual integrated Keystone XL that would come down from western Canada, or if they're trying to justify them as standalone projects."

Even without a cross-border pipeline, Tallet said, TransCanada might still find ways to transport more Canadian crude.

Keystone Project on Hold While TransCanada Weighs Three Options

 

[captain morgan]

Option 4:

TCPL withdraws their $7 billion and reallocates that to the West coast p/l development.

 

[mentalfloss]

Option 4:

TCPL withdraws their $7 billion and reallocates that to the West coast p/l development.

It's clear that Republicans are using Option 4 as a political tool in the upcoming election.

 

[mentalfloss]

Keystone XL pipeline: Good for Big Oil, bad for the economy

Interesting quote. TransCanada and its allies can’t seem to keep their numbers straight for the proposed tar sands Keystone XL pipeline. Just the day before, the company released a press statement predicting 20,000 pipeline and 118,000 “spin-off” jobs. In September of 2010, they claimed 13,000 jobs. Two months prior to that, a “study” they commissioned was released predicting 250,000 to over half a million jobs (p. 33). The Republican Party claims over 100,000. All of these estimates contradict the statement by the company’s own Vice President, even those at the lower end.

Analysts who aren’t trying to make money off the pipeline conclude that it would create far fewer jobs. Researchers at Cornell University project as few as 2,500 jobs, and the State Department up to 6,000 (p.ES-22). Notably, most projections are for short-term jobs associated with construction—something proponents don’t always make clear. (There’s nothing wrong with short-term jobs, any would be welcome, but their temporary nature shouldn’t be in the fine print). According to the State Department, as few as 20 jobs will be permanent (p. 3.10-80) (excluding “induced” jobs created from wages spent by these workers). (Click here for a good summary explaining the differences across industry and independent analyses, by the Columbia Journalism Review).

So what is going on here?

After failing to convince their own country’s citizens that the pipeline would be good for them, Big Oil and its Congressional protectors have launched what can only be characterized as an aggressive disinformation campaign to build the pipeline. Preying on the fears of America’s unemployed and economically insecure, they are trying to sell it as a national jobs plan and a way to increase national security by reducing dependence on foreign oil.

It’s a cruel hoax. Canadians didn’t fall for it, and neither should we.

The proposed project would construct a 1,700 mile conduit from Alberta, Canada for the world’s dirtiest and most corrosive form of oil (tar sands) right through the heart of America’s farmland —threatening not only the bread basket of the US, but also the world. It promises little to potentially negative economic returns for Americans.

Maybe that’s why President Obama made the bold decision to reject TransCanada’s permit application. With Citizens United giving the oil industry (even more) unlimited influence, and the American Petroleum Institute’s blatant threat to the President to approve Keystone XL or face “huge political consequences,” Obama’s courage shouldn’t be underestimated.

Here’s the truth about the pipeline:

* It will create only a very modest number of jobs. While these jobs are important and could certainly help some workers, industry has grossly overstated its case.

* It might destroy more jobs than it creates:

• By TransCanada’s own account, Keystone XL is expected to increase oil prices in the Midwest (building a pipeline to the Gulf Coast will eliminate an excess supply of the oil in the Midwest, pushing up prices). As part of its permit application to the Canadian government, TransCanada said (p.21) annual oil company revenues are expected to increase as a result by $2 to nearly $4 billion. In turn, our farmers could see an increase in fuel costs of $2.6 billion dollars or more over 2009 levels…Higher oil prices might be good for the oil industry, but they will increase the cost of living and doing business in the Midwest, negatively impacting its economy and potentially increasing unemployment.

• Pipeline leaks and spills into aquifers and water ways threaten the livelihoods of a quarter of a million farmers, and businesses providing outdoor recreation and other tourism services. Public health is also threatened, as already evidenced from a major tar sands spill in 2010 along a different pipeline (more below).

* Finally, the pipeline will not reduce our oil dependence or increase national security. The price of TransCanada’s oil will be determined by surging global demand for oil, and OPEC’s monopolistic production decisions that limit the world’s oil supply and increase its price (the cartel (OPEC) has almost 80 percent of the world’s known oil reserves). For all the rhetoric about energy independence and controlling the price of oil, Keystone XL’s marginal contribution to global production won’t amount to a hill of beans.

There is one source of potential long-term job creation about which oil industry has remained silent: jobs created to clean up inevitable spills and leaks. So far, TransCanada has experienced major problems with the section of the Keystone project already completed. In its first year of operation, its so-called safe “state-of-the-art” pipeline has already leaked 35 times, (21 times in Canada, 14 in the U.S--p. 3.13-11). According to the University of Nebraska, approximately 91 major spills can be expected over the 50-year lifetime of the pipeline. Clean up jobs will last longer than that…

There is also the potential for a major disaster. In 2010, the largest tar sands spill in U.S. history devastated the Kalamazoo River with over 800,000 gallons of oil at a price tag of over $700 million. We’re still cleaning it up, a year and a half later.

A worst-case spill from Keystone XL could cause widespread groundwater and river contamination. Any resulting clean up expenditures will strain public budgets, diverting limited resources away from productive investments that generate long term job growth, such as infrastructure, education, and clean energy.

Finally, there’s public health and the environment. The $700 million figure cited above was just for cleaning up. According to a November 2010 report (p.12) from the Michigan Department of Community Health, almost 60 percent of people surveyed who lived near the Kalamazoo spill experienced at least one adverse health effect following it, including respiratory, gastrointestinal and neurological symptoms (compared to a baseline of less than 5% in a community 15 miles upstream of the spill). Ethics aside, sick people do not make a healthy economy.

We should take heed of Canadians' oppostion to transporting Alberta's dirty oil through their own land for their own oil; they are no fools. They know TransCanada’s Keystone XL tar sands pipeline is a terrible project: it promises few if any jobs, puts existing jobs at risk, and threatens water supplies, public health, and the environment. They know the oil industry has one objective and one objective only: to increase profits. It is not to bestow a new supply of cheap oil on the US or reduce unemployment. As PT Barnum famously said, “There’s a sucker born every minute.” Let’s make sure we’re not one of them.

Keystone XL pipeline: Good for Big Oil, bad for the economy

 

[mentalfloss]

New Keystone Route Still on Aquifer | Daily Yonder | Keep It Rural

 

[taxslave]

A few days ago I read an article stating that the southern leg of the Keystone Xl from Oklahoma to Texas was about to start.

 

[wulfie68]

This article and the parts of the report I read seem to be designed to show the worst scenarios, of which many are highly improbable. I guess I shouldn't be surprised looking at the source, but they undermine their own credibility, and that of other conservationist groups by overreacting and overstating much of their case.

According to the State Department, as few as 20 jobs will be permanent (p. 3.10-80) (excluding “induced” jobs created from wages spent by these workers).[

This is a drastic under-representation. 1700 miles of pipe also means 30 pumping stations, which may not necessarily be constantly but they will require operations and maintenance people. In addition, to live up to the DOTs regulations for interstate pipelines, there will have to be corrosion engineering and inspection personnel utilized and conducting regular activities. Add in engineering and aux. personnel such as purchasers, HR and accounting, and I would have a hard time seeing less than 200 people directly employed after construction was completed. That's not including seasonal contractors (which are always utilized in some form). It's a far cry from hundreds of thousands of jobs but its still not as small as the report is suggesting. When we're honest EVERY construction project (be it a building, factory, highway, pipeline or some other project) overstates the jobs it will create or at the very least people never appreciate that they are temporary.

By TransCanada’s own account, Keystone XL is expected to increase oil prices in the Midwest

In a vacuum yes, but there is also new oil and natural gas being produced in the East/Midwest from the Marcellus and Utica shales that should offset some of this supply being exported, which should mean the increase may not be as bad as suggested.

Pipeline leaks and spills into aquifers and water ways threaten the livelihoods of a quarter of a million farmers, and businesses providing outdoor recreation and other tourism services. Public health is also threatened, as already evidenced from a major tar sands spill in 2010 along a different pipeline (more below).

Leaks and spills affect small areas temporarily. The US DOT has reformed pipeline laws in recent years to cut down the frequency and severity of such occurrences (namely DOT regulations 192 and 195 for interstate pipelines). Now this isn't going to stop leaks: everything we build fails at some point, but with the steps outlined and additional measures that can be mandated by the various levels of government, they can be drastically minimized. If you add in more gov't regulatory oversight, this could be seen as another job creator.

Finally, the pipeline will not reduce our oil dependence or increase national security.

True.

The pipeline does nothing to reduce Canadian or American demand for fossil fuels. The fact that much (if not all) the oil refined will be destined for export means that existing supplies for oil will still be utilized. Increasing supply within Canada (and the US) could increase the stability of our prices by eliminating imports from less stable areas, as increasing refining capacity in some areas would introduce more stability at the pumps, but this project doesn't really address any of that.

 

[petros]

A few days ago I read an article stating that the southern leg of the Keystone Xl from Oklahoma to Texas was about to start.

They haven't stopped the pipe order. It's still heading south by the train full.

 

[mentalfloss]

Obama defends his policy on oil pipeline

Stillwater, Oklahoma (CNN) -- President Barack Obama took on critics of his energy policies Thursday, saying in a speech at a proposed new pipeline site that they weren't paying attention to increased oil production at home and were misleading the public about the cause of rising gas prices.

"Anyone who says that we're somehow suppressing domestic oil production isn't paying attention," Obama said in Cushing, Oklahoma, on the second day of a four-state tour to tout his policies.

"And anyone who says that just drilling more will bring gas prices down just isn't playing it straight," the president continued. " We are drilling more. We are producing more. But the fact is, producing more oil at home isn't enough to bring gas prices down overnight."

Obama repeated his call for a diversified policy that increases production of traditional energy sources such as oil and natural gas while increasing investment in alternative sources such as solar, wind and hydrogen power to compete in growing global clean energy markets.

In particular, he rejected Republican claims that U.S. oil reserves alone offer a solution to higher gas prices and long-term supplies. However, Obama changed his language on that point, referring to U.S. oil production Thursday instead of his past reference to proven U.S. oil reserves.

"As I've been saying for the last few weeks, we use more than 20% of the world's oil, but we only produce 2% of the world's oil," Obama said, breaking from the prepared text of his speech distributed beforehand by the White House. "... Even if we drilled every little bit of this great country of ours, we'd still have to buy enough from the rest of the world to meet our needs."

He added that "the price of oil is set by the global market, and that means every time tensions rise in the Middle East, so will gas prices at home." In particular, Obama said, rising tension involving Iran was causing the current spike in global oil prices.

Obama defends his policy on oil pipeline - CNN.com

 

[Kakato]

The world runs on oil,why cant folks get this part?
Canada will sell it's oil to anyone who has the coin,we have a steady supply so what's the problem? Would folks rather subsidize the middle east by depending on their oil?
Canadas fragile economy depends on oil right now,it is keeping us alive.

 

[petros]

Lmfao!

 

[Tonington]

Canadas fragile economy depends on oil right now,it is keeping us alive.

Supposing for the moment that is true, why on Earth would anyone want to double down when all their eggs are in one basket? That's exposing us to far too much risk. If this is true, then that seems to be a good reason to reform our economy somewhat to encourage diversification. I'd bet money your retirement savings aren't all stored under your mattress, or in one mutual fund, or in one equity...

 

[Kakato]

Supposing for the moment that is true, why on Earth would anyone want to double down when all their eggs are in one basket? That's exposing us to far too much risk. If this is true, then that seems to be a good reason to reform our economy somewhat to encourage diversification. I'd bet money your retirement savings aren't all stored under your mattress, or in one mutual fund, or in one equity...

And I'll bet money that if you have mutual funds that you are an investor in the oilsands.
Calgary is the new center of the universe(sorry Toronto)and the party has just started.

If you have to have all your eggs in one basket then oil is the way to go as it pretty well rules the world and everything in it.

 

[Tonington]

If you have to have all your eggs in one basket

We don't.

 

[Kakato]

We don't.

Unless you live off the land and in a cave then anything you have invested will be tied to oil and untill we can teleport ****e like on star trek everything you buy will have the price dictated by what a barrell of oil costs.

China wants stuff,We have stuff! Resources mon ami,we got em.The french have owned the north for a long time now.This all still has to rely on oil to become a reality.

Jean Charest, prospector - Capital Read, Inkless Wells - Macleans.ca

 

[Tonington]

Yes, you sure do want to hold all your eggs in that one basket.

 

[Kakato]

Yes, you sure do want to hold all your eggs in that one basket.

Considering oil dictates the price of everything I would say it is a good basket to have my eggs in.
I have put over 25 years in the mining industry and in the north,80% of my work was getting fuel in.

 

[Tonington]

Considering oil dictates the price of everything I would say it is a good basket to have my eggs in.

Lots of things dictate the price of a product. It depends entirely on which product you're talking about. The price of oil itself depends on exogenous factors too. What happened in 2008 affected oil producers and anyone working in that sector of the economy.

Having all your eggs in that basket is fine when the going is good. The risk is what happens when things "don't go according to plan". I work in pharmaceuticals, we don't put all the chips down on one potential product.

That's just stupid.

 

[Kakato]

Lots of things dictate the price of a product. It depends entirely on which product you're talking about. The price of oil itself depends on exogenous factors too. What happened in 2008 affected oil producers and anyone working in that sector of the economy.

Having all your eggs in that basket is fine when the going is good. The risk is what happens when things "don't go according to plan". I work in pharmaceuticals, we don't put all the chips down on one potential product.

That's just stupid.

Oil runs everything so you basically have all your eggs in that basket like it or not.
A world without oil would be at a standstill within 48 hours.Diesel runs the world.

 

[mentalfloss]

Keystone XL not ‘make or break’ climate issue: Obama

President Barack Obama isn't saying where he stands on the controversial Keystone XL pipeline at this point, but he does stress that Canada's going to push ahead on the oil sands no matter what the United States does.

In an interview in the May 10 edition of Rolling Stone, the president was asked about the comments of a NASA scientist, James Hansen, that the pipeline would spell trouble for the environment. As in, it would be "game over."

"James Hansen is a scientist who has done an enormous amount not only to understand climate change, but also to help publicize the issue," the president said in the interview with the magazine's co-founder, Jann Wenner.

"I have the utmost respect for scientists. But it's important to understand that Canada is going to be moving forward with tar sands, regardless of what we do. That's their national policy, they're pursuing it. With respect to Keystone, my goal has been to have an honest process, and I have adamantly objected to Congress trying to circumvent a process that was well-established not just under Democratic administrations, but also under Republican administrations."

The Obama administration rejected the original Keystone XL proposal, forcing TransCanada Corp. (TRP-T43.36-0.10-0.23%) to reroute the pipeline around an environmentally sensitive region in Nebraska and apply to the government again.

"The reason that Keystone got so much attention is not because that particular pipeline is a make-or-break issue for climate change, but because those who have looked at the science of climate change are scared and concerned about a general lack of sufficient movement to deal with the problem," the president said in the interview.

"Frankly, I'm deeply concerned that internationally, we have not made as much progress as we need to make," he said, though he heralded the administration's action in areas such as auto fuel standards.

He noted, too, that the priority for many people over the past several years has been finding a job, paying bills and juggling high gasoline prices.

"In that environment, it's been easy for the other side to pour millions of dollars into a campaign to debunk climate-change science. I suspect that over the next six months, this is going to be a debate that will become part of the campaign, and I will be very clear in voicing my belief that we're going to have to take further steps to deal with climate change in a serious way."

Keystone XL not 'make or break' climate issue: Obama - The Globe and Mail