U.S. to re-route Keystone XL due to environmental concerns

mentalfloss

mentalfloss

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It looks like Nebraska isn't the only one that won't be consulted, grump...

..too.. much.. news...

Keystone segment may go ahead

TransCanada Corp. could begin construction of a vital segment of its Keystone Xl oil pipeline before U.S. regulators have signed off on the project as a whole.

Executives at the company told an investor conference in Toronto Wednesday that the section of pipeline between the energy hub of Cushing, Okla. and the U.S. Gulf Coast could be prioritized, to alleviate a supply glut.

As it stands, millions of barrels of crude oil come into Cushing every day from all across North America, but there isn't enough infrastructure in place at the moment to efficiently move it to refineries and export ports on the coast. There's a massive bottleneck, which has depressed prices for North American oil versus its European counterpart, Brent Crude.

Alex Pourbaix, TransCanada's president of energy and oil pipelines, said the company is focusing on getting as much crude as possible to the Gulf Coast. "The focus remains on getting to the Gulf Coast at Port Arthur and Houston," he said. "The first thing that we need to do is spend a little bit of time with our shippers and see sort of where they stand," he said. "Certainly the message we're hearing is that they would very much like to see that Cushing-to-Gulf Coast phase come in as soon as possible. So we'll take a very hard look at the commercial underpinnings for that."

Under the best-case scenario, TransCanada could start digging the Cushing section in the new year, provided environmental assessments already completed for that part of the line don't need to be updated. "I think at the worst we would require the permission of the State Department to proceed on that rather than as part of the entire process," said Pourbaix.

He said building the Cushing leg first is "definitely doable," but TransCanada needs to run it by the State Department. "Out of an overabundance of caution on our own side, we would want to make sure that everybody at the State Department would be happy with that kind of a proposal."

Keystone segment may go ahead - World - CBC News
 
M

mikemac

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damngrumpy said:
Part of the problem is they never consulted the people of Nebraska, no not the
government the people of the State. When you talk to those only of like kind,
you do not know the feelings of those who live there. I am happy we stopped
this even for a short time. I think we should manufacture all raw materials and
products here in Canada, for domestic and export use. It would provide real
jobs for our people using our own resources. I don't have a problem sharing
some of our oil but I maintain we must ensure a supply for Canadians going
into the future.
We should not be shipping raw materials to Asia either, especially oil and gas.
As Canadians we have a mentality that we have to sip our prized materials
raw and provide jobs for others when we could ship it refined and produced
and demand more for it. We are a have country and we should ensure a
maximum benefit for our nation.
Click to expand...

It's nice to hear from a real Canadian in this thread damngrumpy. Reading back threw this thread you would think a lot of the posts were from the oil lobby. Or from south of the border.
 
mentalfloss

mentalfloss

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mikemac said:
It's nice to hear from a real Canadian in this thread damngrumpy. Reading back threw this thread you would think a lot of the posts were from the oil lobby. Or from south of the border.
Click to expand...

Speaking of which..

Keystone pipeline proponents lobbied feds 56 times since May, logs reveal

OTTAWA — The proponents of a controversial pipeline project linking Alberta's oil industry to refineries on the Gulf Coast of Texas attempted to lobby federal politicians and bureaucrats in Canada 56 times since May's general election, according to reports filed under Canada's lobbying registry.

The records, which log all forms of communication including phone, email or in person, reveal a systematic outreach in recent months by Alberta-based TransCanada Corp. to members of the Conservative caucus, cabinet ministers and their staff, as well as senior bureaucrats in a range of government departments. The outreach continued over the summer months as federal cabinet ministers and other Tory MPs, along with Canadian diplomats, actively pursued their own lobbying efforts to convince the American government to give the green light to the Keystone XL pipeline expansion.

The multibillion-dollar project, if approved, is slated to create thousands of jobs and open up new export markets within the next decade to allow Canadian crude oil from Alberta to reach refineries on the Gulf Coast of Texas.

The company said there was nothing unusual about its activity to share information about the project, which suffered a setback last week when U.S. President Barack Obama's administration ordered a new environmental review of the proposed route that could delay it by more than a year.

"It is customary for us to have our CEO and other members of our executive team meet with officials," TransCanada spokesman Shawn Howard said in an email. "This is our pipeline project and we understand it intimately so it's natural for us to provide updates directly."

He also praised the Canadian government for becoming "an important advocate" for the Keystone XL project after it had completed the regulatory review required for the Canadian portion of the route.

"They (Canadian government representatives) understand the importance of this project and the energy industry to Canada and North America and we have appreciated their tireless work on this project's behalf."

Federal briefing notes from Natural Resources Canada, released under access to information legislation in June, said the 2,700-kilometre pipeline expansion project was facing delays because it was perceived to be accelerating U.S. dependence on "imports of 'dirty' Canadian crude oil from the 'tar sands.'"

The lobbying records list several communications with Foreign Affairs Minister John Baird's office, as well as contact with other members of cabinet including Citizenship and Immigration Minister Jason Kenney, Junior Finance Minister Ted Menzies, Native Affairs Minister John Duncan, Natural Resources Minister Joe Oliver, Public Works Minister Rona Ambrose, Democratic Reform Minister Tim Uppal as well as parliamentary secretaries for the environment and public safety ministers, Michelle Rempel and Candice Hoeppner.

He added that the company provides information on its own project to the government which then determines its own foreign policies.

But Liberal natural resources critic David McGuinty said the entire log of activity indicates an unprecedented mobilization of the government apparatus to lobby on behalf of a company.

"That's all about a Canadian corporate player using the instrument of the federal government to achieve their economic outcome."

McGuinty has suggested that Prime Minister Stephen Harper is acting like the head of an oilpatch corporation since he has defended the industry more than other sectors such as tourism, fisheries or the auto manufacturers.

He also noted that lobbying records for Oliver, Kent and their parliamentary secretaries reveal more than 100 meetings or communications with lobbyists since May, and that more than half of those were with representatives from energy or utility companies.
 
mentalfloss

mentalfloss

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Keystone reignites debate over upgrading

Renewed calls to process more bitumen in Alberta are following a delay in a proposed export pipeline even though the economic upside for upgrading plants in recent years has shrunk.

The push to encourage more processing of production from the province's vast bitumen resource into higher value light oil resurfaced this week in a debate among elected leaders, after the U.S. federal regulator deciding on a permit for the 830,000 barrel per day Keystone XL pipeline from Alberta to the U.S. Gulf Coast indicated it won't budge on its additional year or more of study.

The heightened pressure on lawmakers to get more revenue for Alberta's bitumen follows recent calls to address a predicted decline in synthetic oil produced in the province, as a percentage of total bitumen output. The Energy Resources Conservation Board predicts 47 per cent of bitumen produced in the province in 2020 will be upgraded to light oil, down from 58 per cent in 2010. In 2008, the province had set a goal of 66 per cent. The regulator's summer forecast had some eyeing jobs and tax revenue attached to additional upgraders crying out for government action.

Energy Minister Ted Morton told an energy conference in Calgary this week there has been "heated" discussion on the issue in caucus since the Keystone XL delay and there are some "enthusiasts" in cabinet backing support for more upgrading, but that he isn't one of them.

Morton's view is that the economics for upgrading aren't certain and seem to change like the weather in Alberta, "every month or two," as he told an audience at the 2011 Calgary Energy Roundtable on Tuesday. Industry observers confirmed a confluence of factors make building a multibilliondollar upgrader riskier now than a few years ago.

Between 2004 and 2006, energy companies could earn 20 to 25 per cent more on each barrel of bitumen produced in Alberta by processing it into synthetic oil at an upgrader, said Kam Sandhar of investment bank Peters & Co. Today, a barrel of bitumen is only fetching 10 per cent less on markets than a barrel of synthetic crude.

A pair of new pipelines came online in 2010 to bring bitumen south to facilities that can handle the heavy oil, which lifted the price, Sandhar explained. "What's changed between now and then is there's more take-away capacity to the Midwest, there's more coking capacity in the Midwest, which has essentially grown the market for heavy oil," Sandhar said.

While existing upgraders in Alberta are making money, Sandhar said, it's hard to justify new projects given that labour costs and supply chain costs have risen - including loftier steel prices. Expansion of oilsands mining and in situ bitumen production, expected to double from about 1.5 million barrels per day by 2020, means competition for workers in northern Alberta is fierce - which ratchets up wages, he said.

"Let's assume you heard somebody say tomorrow, 'There are two new upgraders being built,' " Sandhar said. "It's not doable."

The oilpatch is "clearly" supportive of doing upgrading in Alberta, said Greg Stringham, a vice-president of the Canadian Association of Petroleum Producers.

There are five upgraders operating in Alberta with capacity to process more than 1.2 million bpd, and a few more planned. North West Upgrading Inc. and Canadian Natural Resources Ltd. are pitching a three-phase project starting in 2014 to cost $15 billion and amount to 150,000 bpd, with a bitumen supply commitment from the government. The proposed Voyageur upgrader by Suncor Energy Inc. and Total S.A. is projected to add 200,000 barrels per day in 2016. CNRL has said it would add to its existing Horizon upgrader facility, as long as cost inflation isn't too high, and Nexen Inc. has publicly mused about an upgrader expansion at its Long Lake in situ oilsands project.

Stringham said U.S. Gulf Coast refiners that can take in Canadian heavy oil have existing contracts soon expiring with suppliers from Venezuela and Mexico and are willing to pay more. "So that's what you're competing against," Stringham said. Assuming Keystone XL gets built to supply those refineries, he said, that demand will be satisfied.

The Alberta Federation of Labour has long bemoaned export pipelines for allowing value-added jobs to flow "down the pipeline," the group's president, Gil McGowan, said. Even worse, McGowan argued, is that pipelines leaving Alberta have contributed to the thinner profit margins upgrading projects could potentially earn by inflating heavy oil prices, leaving those profit spreads for refineries in Illinois to enjoy.

University of Alberta business professor Andrew Leach said the effect of pipelines on the economics of upgrading isn't so simple, since pipelines would also be needed to export new synthetic crude. "Even if you are running 100 per cent synthetic in the province, you'd still want access to Gulf Coast or West Coast markets," Leach said.
 
petros

petros

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They can always import heavy crude from the Venezuelan Orinoco river basin for the new Upgraders in TX and LA.

In the mean time Enbridge quietly pushes big pipe southward.
 
mentalfloss

mentalfloss

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Apparently Tories are now second-guessing bitch-u-men as well.. My my, protests are making some headway these days..

Keystone delay fires up jobs debate
No consensus on upgrading projects

This month's delay of the $7-billion Keystone XL pipeline has reignited the long-standing Alberta debate about whether raw natural resources should be shipped abroad for processing, or taxpayers should help pay the bill for upgrading here to create jobs and value-added products.

This week at the legislature, wrangling over whether the government should create incentives or invest cash into oilsands bitumen upgrading projects wasn't limited to Alberta's opposition parties. Even within the ranks of the province's governing Tory party, there's no consensus.

"Obviously we're very reluctant to get involved in the business, but at the end of the day, my opinion is you can't sit on one of the largest oil and gas reserves in the world and run out of diesel fuel every year," said Alberta Infrastructure Minister Jeff Johnson, the MLA for Athabasca-Redwater.

Last week a diesel shortage almost stopped school buses in his riding in their tracks, Johnson said. On a larger economic scale, he wants jobs and tax revenue to stay in the province.

"We have a policy as a government that we want to stay at, that (sees) approximately two-thirds of the raw bitumen we produce . . . upgraded in the province," he said. "The issue we've got is that we're dropping. And the projections are that we're going to drop further over the coming year or so."

This week, Alberta Energy Minister Ted Morton drew attention to the contract the government signed that will see it provide $3 billion in debt financing to help get the North West refinery built. The cash will be paid over 30 years through fees that will also cover processing costs.

The government insists the value-added facility is good not only for job creation and Alberta's economic growth, but it will also benefit provincial coffers as the refinery turns bitumen into more valuable diesel, solvents and diluents.

However the allure of rewards comes with a significant liability. The deal - which the government says is not a loan guarantee - leaves the government on the hook for $3 billion worth of debt, whether or not the facility is actually processing bitumen. Given the dollars on the table for the North West refinery, Morton said this week he believes the government should be cautious about jumping into new ventures.

"Whether an operation makes money or loses money, it doesn't matter whether it's public sector or private sector, we're sharing the risk," Morton explained to the legislature on Thursday.

The Canadian Association of Petroleum Producers has argued the economics of upgrading in Alberta might not add up. U.S. Gulf Coast refiners, the association notes, can handle heavy crude, have spare capacity, and don't demand billions for the building of brand new facilities.

At the legislature, the Liberals said they want the government to play a larger role in bitumen upgrading. However, NDP Leader Brian Mason said he favours the Alberta government enacting economic policies that would discourage the export of raw bitumen. In the right environment, the private sector would build upgraders on their own, without government help, he said.

Wildrose Leader Danielle Smith said she believes the government's level of risk in the North West project is too high. "This could well turn into a major black eye for the government, if this goes sideways," Smith said. "There's no need to expose taxpayers to this kind of risk. Billions of dollars could be spent on high-priority items for taxpayers."

Keystone delay fires up jobs debate
​
 
mentalfloss

mentalfloss

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Excellently articulated article and right on the money..

Keystone is an early warning for Athabasca

U.S. President Barack Obama shocked the Calgary oilpatch earlier this month in delaying approval of the proposed Keystone XL pipeline that would carry Athabasca crude oil across the U.S. Great Plains to refineries on the U.S. Gulf Coast. That step has been greeted in some quarters here as an act of hostility toward Canada.

But it’s the opposite. The U.S. did everyone a favour by putting the brakes on this thing. The environmental impact is clear as mud. And the long-term economic viability not only of Keystone but Athabasca itself is by no means assured.

TransCanada, in which I own shares, earned its setback, playing almost perfectly to the widespread distrust of business in these times. The firm asserted, falsely, that Keystone was essential to U.S. energy security; that halting its progress would spark some kind of national U.S. emergency; and that Keystone had been more thoroughly vetted than any project of its kind.

Funny, that’s exactly what BP PLC told Congress and regulators prior to commencing with its ill-fated Deepwater Horizon project. That epic disaster comes readily to mind not so much as among the biggest oil spills in history, but for abject regulatory failure. And for the credulity among guardians of the public interest in believing what businesspeople will say in pursuit of something they desperately want.

TransCanada has lately stopped making CEO Russell Girling available for comment, on the curious assumption that a faceless corporate favour-seeker is somehow more credible than a candid and accessible one.

Apparently no one in Calgary detected the similarity Americans would see between TransCanada and another foreign multibillion-dollar energy giant that so recently brought grief to the U.S., namely BP. I’ve rarely seen a weak hand so badly overplayed.

And that’s putting aside the almost $1 million TransCanada has spent lobbying Obama’s State Department – big money even in that town. And its hiring of a lobbyist who is a former top campaign worker for Hillary Clinton, who of course heads the state department.

The stink of crony capitalism, one of the Occupy movement’s bigger talking points, was sufficient to require Clinton to call an internal inquiry into her own department for evidence of influence-peddling and conflicts of interest. Rule #1 in corporate diplomacy is to avoid causing public embarrassment for someone from whom you need something.

Think back to Gerry Schwartz’s blundering, failed takeover bid for Air Canada; Ontario Teachers’ Pension Plan Board’s quixotic bid for Bell Canada parent BCE Inc.; and the scheme of dubious merit for merging the Toronto and London stock exchanges. Then multiply by two or three and you have the fiasco of Keystone Kops venture.

The politics. Keystone has attracted an improbable coalition of opponents. It includes cattle ranchers, the Republican governor of Nebraska, Hollywood green celebs, libertarian private-property rights advocates anticipating a Keystone expropriation of grazing and other U.S. lands, and alternative energy proponents.

Obama is not the environmental president the U.S. eco-vote thought it was getting. Obama has always seen the continued use of fossil fuels as a necessary “bridge” to that point, two decades out, when wind, solar and other energy alternatives become practical.

And so Obama has conditionally approved Royal Dutch Shell PLC’s plans for oil fields off the coast of the politically-sensitive Arctic National Wildlife Refuge. In September the president angered not just environmentalists but civic leaders by withdrawing a promised Environmental Protection Agency measure to more vigorously reduce smog. Obama even greenlighted the hated BP’s return to exploration activity in the Gulf of Mexico.

But with its maladroit handling of the Keystone proposal over the past five months, TransCanada managed to allow White House approval or rejection of Keystone to become a litmus test for a president facing uncertain re-election prospects next year, and needing to mend fences with the environmental portion of his political base. Shelving Keystone became almost a no-brainer at 1600 Pennsylvania Avenue.

The economics. It is hideously expensive to turn tar sands into oil, and soon will become more so.

The 20 per cent of Athabasca reserves near the surface have mostly been exhausted. Getting the rest of it will require the same controversial extraction methods used by the new crop of shale-oil producers across North America, who inject a mix of hot water and chemicals, some of them toxic, into the ground to stimulate the flow of oil and gas. That will add as much as $35 in production costs per barrel at Athabasca.

It’s not inconceivable that Athabasca oil will price itself out of the market. People will pay only so much for oil before curbing their consumption and turning to alternative energy sources.

Americans showed that in the summer of 2008, when oil prices spiked to a record that still stands of $147.50 a barrel. That year, Americans for the first time drove fewer miles than in a previous year. Daniel Yergin, the Pulitzer Prize-winning energy expert, puts the ceiling of “acceptable” oil prices at somewhere between $120 and $150 a barrel.

And investors have cause to fear that at some point, oil and gas producers will be forced to pick up some of the “external” costs of their activities – including water scarcity, site remediation, health concerns and carbon emissions. California and certain European countries have already begun to implement such measures.

It hardly matters whether producers or consumers pick up that extra cost. In the end it will be consumers who pay, and cut back their consumption accordingly.

If putting Keystone XL on ice for awhile gets its proponents and the oil producers it is to serve to rethink their business model — factoring in social costs for the first time — a delay is actually in the fiduciary interest of investors.

The markets already are spooked. Almost incalculable sums of money were pouring into new Alberta tar-sands projects through much of the previous decade. But in 2009, the capital inflows from global investors abruptly plummeted 35 per cent.

Engaging in more than a tad of hyperbole, the vociferous Athabasca critic Bill McKibben, a U.S. writer, has said “Do we take (the increased cost and difficulty of extracting Athabasca oil) as a clue we should get serious about the transition to renewables, or as a signal we should rip apart the planet trying to get another hit of fossil fuels?”

Forsaking fossil fuels is not yet a practical option. But the shift McKibben describes does need to proceed at more than its current tepid pace. In the interval, our lone “have” province also will have to rethink an economic model overly dependent on fossil-fuel extraction.

Keystone is an early warning for Athabasca - thestar.com
 
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petros

petros

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I wonder if Canadian oil is problematic for the mid west oil bottleneck at Cushing that keeps jobs alive in small scale refineries dotted throughout the "heartland" and has **** all to do with environment?
 
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