Keystone Pipeline evaluation

[sandpiper]

Unfortunately, I have no faith in Ottawa and Quebec stopping the flow through the East.

All this business of stopping pipelines is like the failed war on drugs that targets suppliers. You can't stop the problem on the supply side. If you want to stop it, you will need to stop it on the demand side. All of these heavy oils are very costly to extract and are only economic when demand is very high and price is very high. Drop demand, drop the price, and you'll make these heavy oil projects uneconomic.

If the oil doesn't flow in pipelines, it will travel by truck or train - and both these options are more dangerous, environmentally worse and more costly. It makes no sense to stop the pipelines.

How to drop demand? Develop alternatives, apply higher fossil fuel taxes and use the revenue to develop an alternate fuel infrastructure.

Of course all of this would have a detrimental effect on the economy - but do you want to have the cake or eat it? Pick.

 

[JRP3]

All this business of stopping pipelines is like the failed war on drugs that targets suppliers. You can't stop the problem on the supply side. If you want to stop it, you will need to stop it on the demand side. All of these heavy oils are very costly to extract and are only economic when demand is very high and price is very high. Drop demand, drop the price, and you'll make these heavy oil projects uneconomic.

If the oil doesn't flow in pipelines, it will travel by truck or train - and both these options are more dangerous, environmentally worse and more costly. It makes no sense to stop the pipelines.

It does because of the bolded part. Higher production costs means lower profits, hence less reason to produce more. Making tar sands oil less expensive means it becomes more profitable.

 

[ItsNotAboutTheMoney]

All this business of stopping pipelines is like the failed war on drugs that targets suppliers. You can't stop the problem on the supply side. If you want to stop it, you will need to stop it on the demand side. All of these heavy oils are very costly to extract and are only economic when demand is very high and price is very high. Drop demand, drop the price, and you'll make these heavy oil projects uneconomic.

If the oil doesn't flow in pipelines, it will travel by truck or train - and both these options are more dangerous, environmentally worse and more costly. It makes no sense to stop the pipelines.

How to drop demand? Develop alternatives, apply higher fossil fuel taxes and use the revenue to develop an alternate fuel infrastructure.

Of course all of this would have a detrimental effect on the economy - but do you want to have the cake or eat it? Pick.

It absolutely makes sense, for multiple reasons:
1) it's a massive user of natural gas with a terrible EROI
2) it causes a large amount of damage
3) with the supply captive, the US Midwest gets cheaper oil

It's an economically dumb decision for the USA to allow Keystone XL North until there's global competition for it by use of a pipeline across Canada.

 

[sandpiper]

It does because of the bolded part. Higher production costs means lower profits, hence less reason to produce more. Making tar sands oil less expensive means it becomes more profitable.

That's a rather poor way to hobble the industry isn't it? It's better to let them transport as efficiently as possible and then apply taxes to capture the externalized costs. The tax money could be used to fund sustainable infrastructure. The extra diesel required to haul the black goo down the road is just up in smoke.

 

[RiverBrick]

If the oil doesn't flow in pipelines, it will travel by truck or train - and both these options are more dangerous, environmentally worse and more costly. It makes no sense to stop the pipelines.

Well, even with Transcanada's project of traversing 900 waterways with a pipeline, a large portion of the transported oil would still be for loading onto supertankers in a particularly fragile portion of the St. Lawrence river. It's not as if the pipeline would take the oil from sand pit to refinery to the pump.

The fact that it took Enbridge 18 hours to react when one of their tar oil pipelines burst in Kalamazoo, MI in 2010 makes me wonder if pipelines are really "safer."


On a related note, documents leaked to Greenpeace show an "astroturf" approach to advocating pipelines. Similar campaigns have been used on behalf of tobacco companies, against EVs, etc.
http://www.cbc.ca/news/politics/ene...tes-targeted-in-transcanada-pr-move-1.2838383

 

[sandpiper]

The market will sort out all of these issues, and has a much better handle on the relative costs than you or I do. Trying to stop the pipelines is attacking the symptoms, not the problem. It may make people feel good but accomplishes nothing.

There's already a competitive means of getting the oil out... the one used right now. Rail and truck.

You need to attack this problem on the supply side. That's essentially what the Europeans are doing, and it does drive people toward reducing fossil fuel usage.

 

[RiverBrick]

There's already a competitive means of getting the oil out... the one used right now. Rail and truck.

Last year, Ottawa quietly amended regulations to allow tankers wider than 32 meters to navigate to Sorel-Tracy on the St. Lawrence river. Then Suncor started shipping their tar oil to Sorel-Tracy by train this year in order to load it onto supertanker. They got two shipments out, then announced that they were halting the process due to falling oil prices. So, there's a limit to how competitive rail and truck are for tar oil shipments to the East.

 

[ItsNotAboutTheMoney]

Last year, Ottawa quietly amended regulations to allow tankers wider than 32 meters to navigate to Sorel-Tracy on the St. Lawrence river. Then Suncor started shipping their tar oil to Sorel-Tracy by train this year in order to load it onto supertanker. They got two shipments out, then announced that they were halting the process due to falling oil prices. So, there's a limit to how competitive rail and truck are for tar oil shipments to the East.

When oil prices were higher earlier this year, and the Brent v WTI differential was particularly wide, there was talk about shipping oil by rail to the US east coast. Not going to happen right now.

 

[RiverBrick]

Sorry going a bit off-topic. I was referring to "Energy East," one of several proposed projects to ship tar oil as long as Keystone is stalled.

 

[JRP3]

That's a rather poor way to hobble the industry isn't it? It's better to let them transport as efficiently as possible and then apply taxes to capture the externalized costs.

I don't have much hope of that happening, and that still allows the pipeline to be built. Once that infrastructure is in place you can bet it's going to be utilized to it's maximum capacity. No way will they allow taxes to make it unprofitable if it's built.

 

[sandpiper]

I don't have much hope of that happening, and that still allows the pipeline to be built. Once that infrastructure is in place you can bet it's going to be utilized to it's maximum capacity. No way will they allow taxes to make it unprofitable if it's built.

I think it slowly will. One way or another we're going to wind up with cap&trade or carbon taxes or something. China is required to deal with their horrendous pollution problem - which they're masquerading as a GHG emission program. And so this partially removes a block that was stopping any serious progress on GHG emissions in the rest of the world. I expect that the US and Canada will make some serious moves in the next 5 years. All of those things that people were panicking about 5-8 years ago (peak oil and so on) haven't gone away. They just got kicked down the road a bit by virtue of an deep recession/depression.

There are enough bright people in government that realize this, and I personally expect that we're going to see continuously increasing regulations driving reduced oil consumption. The democrats/liberals will call it environmentalism. The republicans/conservatives will call it energy independence. Whatever you call it, it will lead to a reduction in demand.

In any case - stopping the pipeline accomplishes just as much as burning 3 pot plantations in BC. Nothing.

 

[JRP3]

Are you taking into account the considerable emissions that will come from the construction of the pipeline? I'm also not sure I agree with your claim that there are enough bright people in government...

 

[ggies07]

Whoooo! The bill didn't pass!!!!

 

[AMPUP]

Whoooo! The bill didn't pass!!!!

But it will in January when the republicans have the senate

 

[Cosmacelf]

But it will in January when the republicans have the senate

Which still wont matter as Obama will veto it.

 

[AMPUP]

Which still wont matter as Obama will veto it.

Maybe, maybe not, he has to compromise on some things else he will have funding for nothing.

 

[Canuck]

All this business of stopping pipelines is like the failed war on drugs that targets suppliers. You can't stop the problem on the supply side. If you want to stop it, you will need to stop it on the demand side.

If you're going to use an analogy, you can't compare an illegal product to a legal one. The war on drugs failed for a number of reasons unrelated to any analogy to oil but for reasons related to the illegality of drugs. A certain percentage of the human population have a propensity to engage in reckless, addictive behaviour and studies have shown that it's much better to regulate and manage that behaviour, than to criminalize it -- which brings us to a better analogy for oil: tobacco companies -- since, like oil companies, they are legal. Do a search on (relatively recently placed) restrictions and regulations placed on tobacco companies (supply side) and, combined with stop smoking efforts (demand side) there is positive proof that you can reduce the problem on the supply side.

If the oil doesn't flow in pipelines, it will travel by truck or train - and both these options are more dangerous, environmentally worse and more costly. It makes no sense to stop the pipelines.

Disagree. We shouldn't scar the land and leave that for future generations to deal with. I'd prefer to truck and train it for now, while we reduce demand. Here's why:


"One of the chief threats to a pipeline is corrosion. Pipelines aren't built with stainless steel, which is far too expensive. They are instead built with thin carbon steel. Left alone, it would rust quickly, which is why companies go to substantial lengths to protect it. They use "cathodic protection," which involves running a current through the metal that inhibits rust formation. And they wrap the pipe in coatings meant to protect them.
Those coatings, however, aren't all created equal. In the 1950s and 1960s, most companies used either asphalt or polyethylene, a plastic. The latter is what covered the ruptured Enbridge pipe - and although the cause of that failure may not be officially determined until late this year, investigators have said they found "surface cracks and indications of corrosion."
That makes sense to Frank Cheng, who holds the Canada research chair in pipeline engineering and serves as director of a pipeline corrosion laboratory at the University of Calgary.
"After more than 30 or 40 years service, this coating could fail," he said.
Mr. Cheng has conducted field research on the performance of older pipes, and has criticized the industry for directing its research efforts toward new technologies at the expense of continuing to evaluate those already installed.
Pipeline problems tend to come from the outside. In oil lines, external corrosion causes more damage than any other problem. From 1991 to 2010, in fact, external corrosion was responsible for $288-million (U.S.) in property damage in the U.S. alone."

How safe are North Americas pipelines? - The Globe and Mail

 

[jerry33]

Maybe, maybe not, he has to compromise on some things else he will have funding for nothing.

You actually believe that once that other party is in control he'll get funding for anything? The best that can be hoped for is that he'll veto everything.

 

[sandpiper]

If you're going to use an analogy, you can't compare an illegal product to a legal one. The war on drugs failed for a number of reasons unrelated to any analogy to oil but for reasons related to the illegality of drugs. A certain percentage of the human population have a propensity to engage in reckless, addictive behaviour and studies have shown that it's much better to regulate and manage that behaviour, than to criminalize it -- which brings us to a better analogy for oil: tobacco companies -- since, like oil companies, they are legal. Do a search on (relatively recently placed) restrictions and regulations placed on tobacco companies (supply side) and, combined with stop smoking efforts (demand side) there is positive proof that you can reduce the problem on the supply side.

Tobacco is a great analogy. But the restrictions that you mention are all demand side. They all restrict the tobacco producer's ability to stimulate demand. Restricting the construction of pipelines is analogous to requiring the tobacco producers to ship in pickups rather than transports. It increases cost a bit, but doesn't really stop anything.

If you want a 100% guaranteed step that would reduce oil consumption, then I would suggest dramatically raising fuel taxes and offsetting them with income/consumption tax reductions. Nothing drives consumers more than a shift in relative costs. This would be doubly so in the US where fuel taxes are presently extremely low.

 

[TheTalkingMule]

You actually believe that once that other party is in control he'll get funding for anything? The best that can be hoped for is that he'll veto everything.

Republicans want lower corporate taxes and the pipeline. Obama will be perfectly fine with both so long as he gets some of what he wants as well. Hopefully we'll dust off the old Gang of Six Plan and Obama can use the pipeline to bring enough people to the table. If we'd gotten that through 3 years ago, we'd be in surplus territory now and talking about investing in renewables.