Canada's-Economic-Implosion

Crude Awakening: How the Keystone Veto Dashes Canada’s ‘Superpower’ Dreams

Oil prices are crashing and Obama has vetoed Keystone XL. Will Canada double down on its dirty tar sands?

Canada's-Economic-ImplosionBarack Obama’s veto of Keystone XL has placed the export pipeline for Canadian tar-sands crude on its deathbed. Earlier in February, the Environmental Protection Agency revealed that Keystone could spur 1.37 billion tons of excess carbon emissions — providing the State Department with all the scientific evidence required to spike the project, permanently. If the news has cheered climate activists across the globe, it also underscored the folly of Canada’s catastrophic quest, in recent years, to transform itself into a dirty-energy “superpower.”

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In the minds of many American right-wingers, Canada may be a socialist hell-scape of universal health care and quasi-European welfare policies. But it is also home to 168 billion barrels of proven oil reserves, the third-largest in the world. Since ultraconservative Prime Minister Stephen Harper — famously described by one Canadian columnist as “our version of George W. Bush, minus the warmth and intellect” — took power in 2006, he’s quietly set his country on a course that seems to be straight from the Koch brothers’ road map. Harper, 55, has gutted environmental regulation and fast-tracked colossal projects to bring new oil to market. Under his leadership, Canada has also slashed corporate taxes and is eliminating 30,000 public-sector jobs.

Riding record-high oil prices,–$107 a barrel as recently as last June,–Harper’s big bet on Canadian crude appeared savvy. The oil boom had driven a seven percent surge in national income, helping Canada ride out the Great Recession with less anguish than most developed nations. And with fossil fuels swelling to nearly 40 percent of net exports, Harper’s Conservative government was on track to deliver a Tea Party twofer in advance of federal elections this fall: a budget surplus and a deep tax cut for the country’s richest earners.

But today, with the price of oil cut in half, the Canadian economy is staggering. Tar-sands producers have clawed back billions in planned investments and begun axing jobs by the thousands. The Canadian dollar, recently at parity with the U.S. dollar, has dipped to about 80 cents. Instead of a federal budget surplus, economists are now projecting a C$2.3 billion deficit. “The drop in oil prices,” said Stephen Poloz, the nation’s central banker, in January, “is unambiguously negative for the Canadian economy.”

If low oil prices hold, the pain will get worse. Most of Canada’s reserves are locked up in tar sands. The industrial operations required to get the oil from the ground to your gas tank are not only filthy and energy-intensive — generating up to double the greenhouse emissions of conventional oil — they also take years of construction to bring online. Because of investment decisions made during the boom years, tar-sands production is projected to expand by seven percent this year, exacerbating the glut. The collapse of crude is threatening to take Harper’s nearly decade-long rule down with it. Canada’s Liberal party, headed by 43-year-old Justin Trudeau (son of legendary Canadian PM Pierre), is running neck and neck in the polls, and bashing Harper where he used to be strongest — his management of the economy. “It’s not fiscally responsible,” said Trudeau in January, “to pin all your hopes on oil prices remaining high, and when they fall, being forced to make it up as they go along.”

As we, in the United States, consider the fate of our own massive oil reserves and confront the specter of yet another Bush presidency, Stephen Harper’s Canada offers a cautionary tale — about the economic and political havoc that can be unleashed when a first-world nation yokes itself to Tea Party economics and to the boom and bust of Big Oil.

Stephen Harper came of age in Alberta, a land of cowboys and oil rigs sometimes referred to as “Texas of the North.” He began his career in the mailroom of Imperial Oil (today an offshoot of Exxon). He rose through Parliament promising a revolution in federal affairs under the battle cry “The West wants in!” Following his election to prime minister in 2006, he wasted little time unveiling his plan to open up his nation’s vast oil reserves.

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Mr. Obama’’s Easy Call on Keystone Bill

The New York Times Editorial Board

Congress has delivered to President Obama a bill commanding him to approve construction of the Keystone XL oil pipeline from Canada, accompanied by a warning from House Speaker John Boehner to ignore the “”left-fringe extremists and anarchists”” who oppose the project.

It was not immediately clear whom Mr. Boehner had in mind, unless he meant the 90 scientists, economists and Nobel laureates who appealed this week to Mr. Obama to reject the pipeline on the grounds that the United States should not be complicit in unlocking some of the dirtiest fuel on the planet. In any case, Mr. Obama should ignore the speaker and, as he has promised, veto the bill. Because the pipeline would cross an international border, the decision about whether to proceed is his to make, not Congress’s, and the State Department review that will help guide that decision is not yet complete.

The veto is the easy call. The tougher one–for the president and his secretary of state, John Kerry–is whether eventually to say yes or no to the pipeline, which would carry about 800,000 barrels of oil a day from Alberta’’s tar sands to refineries on the Gulf Coast. In the great scheme of things, this would not be a big addition to a global oil output that now exceeds 90 million barrels a day. And the oil would come from a reliable friend, Canada. Building the pipeline would also provide about 3,900 temporary construction jobs over two years, but no more than 50 permanent jobs thereafter.

At the same time, both Mr. Obama and Mr. Kerry have declared, without reservation, that climate change is a grave and increasingly tangible threat to world stability. The Canadian tar sands oil can only add to that threat.

One reason is that tar sands oil yields roughly 17 percent more greenhouse gases than conventional crude oil. A bigger reason is that there is so much of it–170 billion barrels recoverable with today’’s technology and maybe 10 times that amount in potential resources. Mainstream climate scientists are virtually unanimous in saying that as much as two-thirds of the world’’s deposits of fossil fuels must remain in the ground if climate disaster is to be avoided. Alberta’’s tar sands oil should be among the first such deposits we decide to leave alone.

Saying no to the pipeline will not prevent the Canadians (and American oil companies that have invested in Alberta) from extracting the oil. But it could make the job much harder. The industry hopes to expand daily production to about five million barrels in 2030 from the current 1.9 million. Doing this profitably will require robust oil prices and access to pipelines, which are a much cheaper way of moving oil than rail. And with oil prices falling fast, pipelines become even more necessary.

Not building a pipeline means that more oil — and more carbon dioxide — will be left in the ground. That is the main reason to say no. Another is that, at least right now, this country does not need the oil. Improved technology, chiefly hydraulic fracturing and horizontal drilling, has opened up vast new deposits of not only natural gas but crude oil; in January 2014, Mr. Obama was able to announce that for the first time in decades the United States was producing more oil than it imported, and the Energy Information Administration has forecast that reliance on overseas oil will continue to fall.

The stars seem very much in alignment for a courageous presidential decision that would command worldwide attention and reinforce America’’s leadership role in the battle against global warming.

Canadian Minister promoting the Keystone XL oil sands pipeline: ‘Our objective is to have zero serious spills’

Though the State Department officially closed the final comment period for the final stretch of the Keystone XL pipeline earlier this week, Canada’s Minister of Natural Resources Joe Oliver continued to make the rounds to press for approval and public acceptance of the controversial project in New York City this week — complete with the government’s standard talking points on American job creation, despite reports that permanent job creation in the U.S. will be far more modest once construction is finished.

Oliver’s job as salesman was made only more difficult by the attention generated by the recent Exxon pipeline rupture in Arkansas, which sent 157,000 gallons of crude oil from oil sands spilling into neighborhoods and wetlands. He acknowledged in an interview with Raw Story that such spills don’t help public perceptions.

“If there’s a spill, every company is affected reputationally, even if one company may have to pay the financial cost because it’s polluter pay,” he said.

But, he said, “When there is a spill, it’s dramatized, even though it’s minuscule as a proportion, it’s definitely not trivial in places where it occurs.”

That’s something the residents of Marshall, Michigan know all too well. In July, 2010 the Canadian company Enbridge reported a 30 inch rupture in its pipeline that the EPA is still requiring them to do additional clean-up on. The pipeline rupture spilled an estimated 819,000 gallons of oil into the Kalamazoo River.

Oliver, though, claims, “Pipelines are by far the safest form of transportation of oil and gas,” he said. “The safety record in Canada, and I think it’s pretty much the same in the United States, is 99.9996 percent. So, it’s safer by far than any other form of transportation.”

But while there are more accidental releases on trains numerically, mostly due to leakage, Bloomberg reporters Rebecca Penty and Jim Efstathiou Jr. found that concerns about railway spills highlighted in the State Department’s report — performed by the conservative Manhattan Institute — were, at best, methodologically flawed.

U.S. pipelines carried 474.6 billion gallons of crude and petroleum products in 2012 and reported 2.3 million gallons spilled, an effective rate of 0.0005 percent, according to John Stoody, spokesman for the Association of Oil Pipelines.

Over the entire decade ending with 2012, railroads hauled 11.2 billion gallons of crude with 95,256 gallons spilled, the majority from just one 2008 accident in Oklahoma that accounted for 81,103 gallons, according to the rail association.

In addition, the reporters discovered that pipelines, unlike trains, need not report any spill under 5 gallons. Moreover, as highlighted by David Malitz in an analysis for the Natural Resources Defense Council, the agency in charge of pipeline safety in the United States, the Pipeline and Hazardous Materials Safety Administration at the Department of Transportation, highlighted major flaws in its own data collection on which the industry and the government rely. According to its own report, the PHMSA noted the likelihood of underreporting even before taking into account the lack of data on spills over five gallons:

Most of our data collection relies on third-party reporting from regulated companies. This is convenient, and it goes directly to the source. It also introduces serious biases and gaps in the data we collect. Despite the best intentions and professionalism, the regulated industry has an institutional bias (and probably a liability aversion) in determining the causes, circumstances, and consequences of failures. Accident investigations—the limited number that we do—have shown some significant differences between what a company reports and an objective view of these events. Reports from companies also reflect large numbers of blanks and “unknown” data, particularly in the most serious cases—exactly where it is most critical that we have good data.

In other words, even the regulators in the United States aren’t totally sure how much oil goes from pipelines into ecosystems in the United States each year.

Oliver says that the issue of spills “is being overseen by the regulators,” but that the decision whether to complete the Keystone XL pipeline is about trade-offs. “It is inevitable, it seems to me, that the United States will continue to build pipelines,” he said, citing both the safety record and the cost of rail and road transportation. “If they don’t continue to [build pipelines], they’re going to have to find another form of transportation which is more costly and less safe, or stop moving energy, which would have dire consequences for the economy and the people of the country.”

“Since they’re going to continue to build pipelines, why not build one which the U.S. State Department has said is safer than existing pipelines?” he added rhetorically. “The reason they said that,” he claimed, “is because technology’s improving and because Keystone has imposed on it some 57 conditions that they’re going to have to comply with.” (The NRDC argues that only 12 of the 57 conditions set forth by the PHMSA as part of the agreement differ from the current standard conditions for pipeline development in the United States.)

Still, Oliver persists that importing oil from Alberta’s oil sands is an overall better choice for the environment than the ones America currently makes. “We are also a more responsible environmentally than the other countries that are exporting oil to the United States, most of whom have no rules at all,” he told Raw Story, “And often we don’t even know what their emissions are because they don’t have a transparent system the way we do [in Canada].” He added, “Canada is a choice, if what you look at is reliability and environmental responsibility.”

U.S. State Department’s review of Keystone XL pipeline rebuked by EPA

WASHINGTON – The powerful U.S. Environmental Protection Agency has once again rebuked the State Department over its positive environmental assessment of TransCanada’s proposed Keystone XL pipeline.

In a lengthy, highly technical letter sent Monday to the top State Department officials overseeing the pipeline permit process, the EPA raises serious concerns about the project’s carbon footprint and criticizes the department’s draft analysis.

It urges the State Department to rethink its finding that the controversial pipeline would not significantly spur production of Alberta’s carbon-intensive oilsands or boost greenhouse gas emissions.

The letter, signed by EPA official Cynthia Giles, said the State assessment included “insufficient information” on environmental issues and added that officials failed to adequately consider alternative routes for the pipeline.

It’s the second time the EPA has publicly denounced the State Department’s environmental review of the pipeline.

In July 2010, as TransCanada awaited a decision from the White House on its first permit application, the EPA sent a letter to the State Department calling its draft environmental assessment of the project “inadequate.”

Then, as now, it chastised analysts for failing to address the greenhouse gas emissions associated with Keystone XL. The letter also urged the State Department to further examine pipeline safety and spill-response planning, as well as the impact on Canadian aboriginal communities.

The EPA is one of several federal agencies that’s been advising the Obama administration on the $7.6-billion pipeline, a project that would carry millions of barrels of bitumen a week from Alberta’s oilsands to the U.S. Gulf Coast.

President Barack Obama rejected the pipeline early last year, but invited TransCanada to file a new application with an altered route that would skirt Nebraska’s ecologically sensitive Sand Hills region.

TransCanada did so, earning the thumb’s up from the state of Nebraska and the draft assessment from the State Department that suggested it posed minimal environmental risks. The State Department is analysing the pipeline because it crosses an international border.

In Round 2 between the EPA and the State Department, Giles says State officials have mistakenly concluded that oilsands bitumen would find buyers with or without the pipeline, most likely via rail lines. The State review used an outdated “energy-economic modeling effort” to reach that finding, she wrote.

“Because the market analysis is so central to this key conclusion, we think it is important that it be as complete and accurate as possible,” she added.

The EPA response was one of hundreds submitted to the State Department following the release of its draft ecological assessment of Keystone in March. The public comment period ended on Monday.

The State Department will now review all the public comments, including the input from the EPA, before finalizing its draft report. Ninety days later, State officials will then determine whether Keystone XL is in the national interest of the United States.

After that, it will be up to Obama to either block or bless the pipeline. A final decision is expected this summer.

The State Department released a brief statement on Monday night saying it had always anticipated that it “would conduct additional analysis and incorporate public comments” in the final version of its environmental report on the pipeline.

Environmental groups urged Obama administration officials to heed the EPA.

“We hope that the State Department will listen closely to the EPA and try again to measure the true impact of this proposed pipeline, which almost every evaluator who doesn’t work for the Canadian government or an oil company has found to be not in the national interest,” May Boeve, executive director of 350.org, said in a statement.

Read more: http://www.calgaryherald.com/business/energy-resources/once+again+criticizes+State+Departments+review/8281586/story.html?__lsa=dc19-5ae1#ixzz2RIVF1JYI

Keystone XL’s Impact Statement: How Stupid Do They Think We Are?

Author
John Atcheson
This just in: building a pipeline to carry the dirtiest oil ever used, creating 17% more greenhouse gasses than conventional oil and hastening the greatest environmental disaster ever faced by humanity, has no negative environmental impact. At least that’s the conclusion of the Environmental Impact Statement issued by the State Department …

Dateline Mayflower Arkansas: According to some estimates, more than 150,000 gallons of bitumen ran through the streets and yards of Mayflower Arkansas, spewing fumes and posing a risk to health, property, and wildlife when the Pegasus pipeline, owned be ExxonMobile burst …

In related news, A tax loophole for tar sands that allowed ExxonMobile to avoid paying into the Oil Liability Trust Fund means US taxpayers will likely get stuck with the bill … the loophole could ultimately cost Americans $400 billion …

Elsewhere in the news, The National Safety Council gave ExxonMobile a Safety Award on April 5th for its leadership and “comprehensive commitment to safety and excellence.” The award was presented at a fundraiser in Houston. Oh, a Safety Award. At a fundraiser. To one of the most profitable companies in history. I feel better…

Breaking News: Indian Country Media Network features a video campaign opposing the use of ports in British Columbia for tar sands released on the 24th anniversary of the Exxon Valdez Disaster. Some 80% of BC residents oppose allowing tar sands to pass through BC …

Dateline New Orleans: BP called its first witness in the civil trial against its Deepwater Horizon disaster which spewed some 4 million barrels of oil into the gulf. Some legal experts suggest BPs best hope may be to convince the Judge they were just a little negligent, as opposed to grossly negligent …

News you may have missed, Since the gulf disaster less than a year ago, there have been 15 major oil spills, 8 of them involving ruptured pipelines resulting in tens of millions of barrels of oil spewing into the environment.

Which brings us back to that XL EIS, which suggests the probability of a leak is negligible.

Wait a minute. How stupid do they think we are?

Basically, the US government and the oil industry are trying to slip this past a gullible public with vague assurances of safety and promises of jobs and economic growth.

The comment period for the Environmental Impact Statement on the XL Pipeline closes on April 22, the shortest public comment allowed, for one of the most important decisions humanity will ever make.

But the fact that pipelines leak, and tar sand bitumen is notoriously hard to clean up is the least of the problems with the EIS.

The real problem is that it assumes we must continue to use fossil fuels in much the same way, and at the same quantities that we do now, for the foreseeable future.

As a result, they are able to construct an absurd argument – that the continued use of fossil fuels – the gravest threat to our environment the world has ever faced since the dawn of human existence – has no environmental impact.

It is done with the skill of the sophist and the tools of wizards, witches and warlocks.

The Environmental Impact Statement for the proposed XL pipeline fails to ask the right question. It addresses GHG emissions from the construction and operation of the pipeline – which is tantamount to asking tsunami victims if their leaky faucet bothers them. It addresses operation and maintenance of the pipeline, another gnat on an elephant. And incredibly, it addresses the effect of climate change on the operation of the pipeline itself … yes, ask not what billions of barrels of crude tar sands can do for global warming; ask instead, what global warming can do to tar sands transport. Really.

In a section marked Life Cycle Analysis, it concludes that the carbon intensity of alternative to tar sands will go up, so the increased carbon emissions of tar sands won’t matter as much, if at all.

But wait a minute. What if we didn’t use more oil? What if we used less? We have the technology to cut oil use drastically. Plug-in hybrids and electric cars get the equivalent of about 100 miles per gallon, they are cheaper to run, and they are much cleaner, even if they use relatively dirty fossil fuels to charge their batteries. And in many areas they can use renewables which are becoming cost competitive with new fossil fuel power. Moreover, the grid has enough off-peak power to charge an enormous fleet of electric cars with existing capacity.

So at this point, the decision to use oil is not destiny, it is choice. And if it’s a choice, the entire basis of the XL EIS is null and void.

Now let’s look at the question of whether we should make the choice to get off oil. The environmental issue is a slam dunk. If we stay above an atmospheric concentration of 350 ppm carbon dioxide for any length of time we court disaster – and for you fundamentalists out there, it’s disaster of biblical proportions. We are currently 396.8 ppm. So our emissions have to go down, and go down now.

There has been a lot of talk about the pipeline creating jobs and fueling economic growth. In actuality, it will do neither. Here’s why. Clean energy investments create three times as many jobs per dollar invested as fossil fuels do. So in essence, each dollar we put into fossil fuels at the expense of clean energy actually costs us jobs and that slows growth.

The EIS sidesteps the real issue: We must get off fossil fuels as rapidly as possible. Expanding our use of fossil fuels with dirtier oil is a form of madness we simply can’t afford.

John Atcheson is author of the novel, A Being Darkly Wise, an eco-thriller and Book One of a Trilogy centered on global warming. His writing has appeared in The New York Times, the Washington Post, the Baltimore Sun, the San Jose Mercury News and other major newspapers. Atcheson’s book reviews are featured on Climateprogess.org.

State Department hides the real cost of Keystone

Author
Michael Brune
You know the news is going to be bad when it’s buried at 4 p.m. on a Friday. If you dump news then, it’s because you hope nobody will pay attention.

But that’s when the State Department’s deeply flawed analysis of the Keystone XL oil pipeline proposal was released. If the timing of the unveiling was a sign the State Department knew it would be controversial, the content is an indicator that the department did not do its duty to thoroughly analyze the impacts of this dirty and dangerous project.

While the State Department acknowledges that tar sands crude is nearly 20 percent more greenhouse-gas intensive than conventional oil, it makes the mystifying claim says that the overall environmental impacts of the pipeline would be limited. That’s because — it claims — tar sands oil would be mined and drilled anyway. That’s just one of the inaccurate assertions that make this report useless.

Currently, 1.8 million barrels of tar sands oil per day are being produced. Permits have already been issued that would allow that extraction to expand to 5 million barrels per day — and the oil industry would like to go even higher. But that same industry is the first to admit that it desperately needs new pipeline capacity to do so.

“When I talk to producers in Alberta,” said Alex Pourbaix of Transcanada, “as long as Keystone XL goes ahead, they view that there’s pretty sufficient takeaway capacity to get us to late in the next decade.”

In other words, the industry itself admits that it will have trouble expanding its extraction of the toxic tar sands without Keystone XL, meaning the State Department’s fundamental assumptions are not only inaccurate but also incredibly cynical.

By this same logic, why would anyone in North America stop new coal plants from being built, if coal were just going to be burned in China and India anyway? Why would we try to replace fracked gas or mountaintop-removal coal with solar and wind, if we’re powerless as a country to lead the world to a clean-energy economy?

The Sierra Club’s Beyond Coal campaign has succeeded in securing the retirement of 142 coal plants all across the country. Although we’ve begun to see a clean-energy turnaround outside the Beltway, we’re still looking for a real sign of strong leadership inside Washington, D.C.

Instead, we keep hearing about the inevitability of fossil fuels: All the oil will be burned, no matter how extreme. Coal and natural gas should be mined, drilled and fracked. Too often, we even hear these tired arguments from climate champions who should know better.

If they don’t know better, they will learn quickly. After a year marked by record droughts, record wildfires and record temperatures, the threat of climate crisis has become a dangerous reality. The last thing we can afford to do is open up the floodgates to a toxic fuel source that would make matters even worse.

Oil companies are spending millions to convince us that we don’t have any choice in the matter, but the truth is that we can power our economy and our nation with clean energy that doesn’t threaten the future of our planet. Across the nation, clean energy is surging and our consumption of dirty fuels is dropping. In the past four years, our wind capacity has doubled and solar installations have increased by a factor of five. Wind energy is creating new jobs and powering homes and businesses in record numbers across states like Iowa, California and Texas. And the president has signed into law new vehicle efficiency standards that will cut the number of fill-ups for American families in half.

But all that progress to fix the climate crisis could be wiped out if Keystone XL moves forward. President Obama needs to reconcile his soaring oratory on climate with strong action to turn away from dirty fuels like tar sands oil. Last Friday, the State Department made the president’s job much more difficult. But it’s still not too late to stop this pipeline. If the president is serious about turning around the climate crisis, he should throw state’s analysis in the trash and reject Keystone XL.

Brune is executive director of the Sierra Club.

Read more: http://thehill.com/opinion/op-ed/286667-state-department-hides-the-real-cost-of-keystone#ixzz2N4oTSHqk
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Keystone XL: A Presidential Decision That Could Change the World

This article originally appeared at TomDispatch.com [1]. To stay on top of important articles like these, sign up to receive the latest updates from TomDispatch.com [2].

Presidential decisions often turn out to be far less significant than imagined, but every now and then what a president decides actually determines how the world turns. Such is the case with the Keystone XL pipeline, which, if built, is slated to bring some of the “dirtiest,” carbon-rich oil on the planet from Alberta, Canada, to refineries on the US Gulf Coast. In the near future, President Obama is expected to give its construction a definitive thumbs up or thumbs down, and the decision he makes could prove far more important than anyone imagines. It could determine the fate of the Canadian tar-sands industry and, with it, the future well-being of the planet. If that sounds overly dramatic, let me explain.

Sometimes, what starts out as a minor skirmish can wind up determining the outcome of a war—and that seems to be the case when it comes to the mounting battle over the Keystone XL pipeline. If given the go-ahead by President Obama, it will daily carry more than 700,000 barrels of tar-sands oil to those Gulf Coast refineries, providing a desperately needed boost to the Canadian energy industry. If Obama says no, the Canadians (and their American backers) will encounter possibly insuperable difficulties in exporting their heavy crude oil, discouraging further investment and putting the industry’s future in doubt.

The battle over Keystone XL was initially joined in the summer of 2011, when environmental writer and climate activist Bill McKibben and 350.org [4], which he helped found, organized a series of non-violent anti-pipeline protests [5] in front of the White House [6] to highlight [7] the links between tar sands production and the accelerating pace of climate change. At the same time, farmers and politicians in Nebraska, through which the pipeline is set to pass, expressed grave concern about its threat to that state’s crucial aquifers. After all, tar-sands crude is highly corrosive, and leaks are a notable risk [8].

In mid-January 2012, in response to those concerns, other worries about the pipeline, and perhaps a looming presidential campaign season, Obama postponed [9] a decision on completing the controversial project. (He, not Congress, has the final say, since it will cross an international boundary.) Now, he must decide on a suggested new route that will, supposedly, take Keystone XL around those aquifers and so reduce the threat to Nebraska’s water supplies.

Ever since the president postponed the decision on whether to proceed, powerful forces in the energy industry and government [10] have been mobilizing to press ever harder for its approval. Its supporters argue [9] vociferously that the pipeline will bring jobs to America and enhance the nation’s “energy security” by lessening its reliance on Middle Eastern oil suppliers. Their true aim, however, is far simpler: to save the tar-sands industry (and many billions of dollars in US investments) from possible disaster.

Just how critical the fight over Keystone has become in the eyes of the industry is suggested by a recent pro-pipeline editorial in the trade publication Oil & Gas Journal:

“Controversy over the Keystone XL project leaves no room for compromise. Fundamental views about the future of energy are in conflict. Approval of the project would acknowledge the rich potential of the next generation of fossil energy and encourage its development. Rejection would foreclose much of that potential in deference to an energy utopia few Americans support when they learn how much it costs.”

Opponents of Keystone XL, who are planning a mass demonstration at the White House on February 17 [11], have also come to view the pipeline battle in epic terms. “Alberta’s tar sands are the continent’s biggest carbon bomb,” McKibben wrote [7] at TomDispatch. “If you could burn all the oil in those tar sands, you’d run the atmosphere’s concentration of carbon dioxide from its current 390 parts per million (enough to cause the climate havoc we’re currently seeing) to nearly 600 parts per million, which would mean if not hell, then at least a world with a similar temperature.” Halting Keystone would not by itself prevent those high concentrations, he argued, but would impede the production of tar sands, stop that “carbon bomb” from further heating the atmosphere, and create space for a transition to renewables. “Stopping Keystone will buy time,” he says [12], “and hopefully that time will be used for the planet to come to its senses around climate change.”

A Pipeline With Nowhere to Go?

Why has the fight over a pipeline, which, if completed, would provide only 4 percent of the US petroleum supply, assumed such strategic significance? As in any major conflict, the answer lies in three factors: logistics, geography and timing.

Start with logistics and consider the tar sands themselves or, as the industry and its supporters in government prefer to call them, “oil sands.” Neither tar nor oil, the substance in question [3] is a sludge-like mixture of sand, clay, water and bitumen (a degraded, carbon-rich form of petroleum). Alberta has a colossal supply of the stuff—at least a trillion barrels in known reserves, or the equivalent of all the conventional oil burned by humans since the onset of commercial drilling in 1859. Even if you count only the reserves that are deemed extractible by existing technology, its tar sands reportedly are the equivalent of 170 billion barrels [13] of conventional petroleum—more than the reserves of any nation except Saudi Arabia and Venezuela. The availability of so much untapped energy in a country like Canada, which is private-enterprise-friendly and where the political dangers are few, has been a magnet [13] for major international energy firms. Not surprisingly, many of them, including ExxonMobil, Chevron, ConocoPhillips and Royal Dutch Shell, have invested heavily in tar-sands operations.

Tar sands, however, bear little resemblance to the conventional oil fields which these companies have long exploited. They must betreated [3] in various energy-intensive ways to be converted into a transportable liquid and then processed even further into usable products. Some tar sands can be strip-mined like coal and then “upgraded” through chemical processing into a synthetic crude oil—SCO, or “syncrude.” Alternatively, the bitumen can be pumped from the ground after the sands are exposed to steam, which liquefies the bitumen and allows its extraction with conventional oil pumps. The latter process, known as steam-assisted gravity drainage (SAGD), produces a heavy crude oil. It must, in turn, be diluted with lighter crudes for transportation by pipeline to specialized refineries equipped to process such oil, most of which are located on the Gulf Coast.

Extracting and processing tar sands is an extraordinarily expensive undertaking, far more so than most conventional oil drilling operations. Considerable energy is needed to dig the sludge out of the ground or heat the water into steam for underground injection; then, additional energy is needed for the various upgrading processes. The environmental risks [3] involved are enormous (even leaving aside the vast amounts of greenhouse gases that the whole process will pump into the atmosphere). The massive quantities of water needed for SAGD and those upgrading processes, for example, becomecontaminated [14] with toxic substances. Once used, they cannot be returned to any water source that might end up in human drinking supplies—something environmentalists say [15] is already occurring. All of this and the expenses involved mean that the multibillion-dollar investments needed to launch a tar-sands operation can only pay off if the final product fetches a healthy price in the marketplace.

And that’s where geography enters the picture. Alberta is theoretically capable of producing [13] five to six million barrels of tar-sands oil per day. In 2011, however, Canada itself consumed [13] only 2.3 million barrels of oil per day, much of it supplied by conventional (and cheaper) oil from fields in Saskatchewan and Newfoundland. That number is not expected to rise appreciably in the foreseeable future. No less significant, Canada’s refining capacity for all kinds of oil is limited to 1.9 million barrels per day, and few of its refineries are equipped to process tar sands-style heavy crude. This leaves the producers with one strategic option: exporting the stuff.

And that’s where the problems really begin. Alberta is an interior province and so cannot export its crude by sea. Given the geography, this leaves only three export options: pipelines heading east across Canada to ports on the Atlantic, pipelines heading west across the Rockies to ports in British Columbia, or pipelines heading south to refineries in the United States.

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Alberta’s preferred option is to send the preponderance of its tar-sands oil to its biggest natural market, the United States. At present, Canadian pipeline companies do operate a number of conduits [13] that deliver some of this oil to the United States, notably the original Keystone conduit extending from Hardisty, Alberta, to Illinois and then southward to Cushing, Oklahoma. But these lines can carry less than one million barrels of crude per day, and so will not permit the massive expansion of output the industry is planning for the next decade or so.

In other words, the only pipeline now under development that would significantly expand Albertan tar-sands exports is Keystone XL. It is vitally important to the tar-sands producers because it offers the sole short-term—or possibly even long-term—option for the export and sale of the crude output now coming on line at dozens of projects being developed across northern Alberta. Without it, these projects will languish [17] and Albertan production will have to be sold at a deep discount—at, that is, a per-barrel price that could fall below production costs, making further investment in tar sands unattractive. In January, Canadian tar-sands oil was already selling [18] for $30-$40 less than West Texas Intermediate (WTI), the standard US blend.

The Pipelines That Weren’t

Like an army bottled up geographically and increasingly at the mercy of enemy forces, the tar-sands producers see the completion of Keystone XL as their sole realistic escape route to survival. “Our biggest problem is that Alberta is landlocked,” the province’s finance minister Doug Horner said [18] in January. “In fact, of the world’s major oil-producing jurisdictions, Alberta is the only one with no direct access to the ocean. And until we solve this problem… the [price] differential will remain large.”

Logistics, geography and finally timing. A presidential stamp of approval on the building of Keystone XL will save the tar-sands industry, ensuring them enough return to justify their massive investments. It would also undoubtedly prompt additional investments in tar-sands projects and further production increases by an industry that assumed opposition to future pipelines had been weakened by this victory.

A presidential thumbs-down and resulting failure to build Keystone XL, however, could have lasting and severe consequences for tar-sands production. After all, no other export link is likely to be completed in the near-term. The other three most widely discussed options [19]—the Northern Gateway pipeline to Kitimat, British Columbia, an expansion of the existing Trans Mountain pipeline to Vancouver, British Columbia, and a plan to use existing, conventional-oil conduits to carry tar-sands oil across Quebec, Vermont and New Hampshire to Portland, Maine—already face intense opposition, with initial construction at best still years in the future.

The Northern Gateway project, proposed by Canadian pipeline company Enbridge, would stretch from Bruderheim in northern Alberta to Kitimat, a port on Charlotte Sound and the Pacific. If completed, it would allow the export of tar-sands oil to Asia, where Canadian Prime Minister Stephen Harper sees [20] a significant future market (even though few Asian refineries could now process the stuff). But unlike oil-friendly Alberta, British Columbia has a strong pro-environmental bias and many senior provincial officials have expressed fierce opposition [21] to the project. Moreover, under the country’s constitution, native peoples over whose land the pipeline would have to travel must be consulted on the project—and most tribal communities are adamantly opposed [22] to its construction.

Another proposed conduit—an expansion of the existing Trans Mountain pipeline from Edmonton to Vancouver—presents the same set of obstacles and, like the Northern Gateway project, has aroused strong opposition [21] in Vancouver.

This leaves the third option, a plan to pump tar-sands oil to Ontario and Quebec and then employ an existing pipeline now used for oil imports. It connects to a terminal in Casco Bay, near Portland, Maine, where the Albertan crude would begin the long trip by ship to those refineries on the Gulf Coast. Although no official action has yet been taken to allow the use of the US conduit for this purpose, anti-pipeline protests have already erupted in Portland, including one on January 26 [23] that attracted more than 1,400 people.

With no other pipelines in the offing, tar sands producers are increasing their reliance on deliveries by rail. This is producing boom times [24] for some long-haul freight carriers, but will never prove sufficient to move the millions of barrels in added daily output expected from projects now coming on line.

The conclusion is obvious: without Keystone XL, the price of tar-sands oil will remain substantially lower than conventional oil (as well as unconventional oil extracted from shale formations in the United States), discouraging future investment and dimming the prospects for increased output. In other words, as Bill McKibben hopes, much of it will stay in the ground.

Industry officials are painfully aware of their predicament. In an Annual Information Form released at the end of 2011, Canadian Oil Sands Limited, owner of the largest share of Syncrude Canada (one of the leading producers of tar-sands oil) noted:

“A prolonged period of low crude oil prices could affect the value of our crude oil properties and the level of spending on growth projects and could result in curtailment of production.… Any substantial and extended decline in the price of oil or an extended negative differential for SCO compared to either WTI or European Brent Crude would have an adverse effect on the revenues, profitability and cash flow of Canadian Oil Sands and likely affect the ability of Canadian Oil Sands to pay dividends and repay its debt obligations.”

The stakes in this battle could not be higher. If Keystone XL fails to win the president’s approval, the industry will certainly grow at a far slower pace than forecast and possibly witness the failure of costly ventures, resulting in an industry-wide contraction. If approved, however, production will soar and global warming will occur at an even faster rate than previously projected. In this way, a presidential decision will have an unexpectedly decisive and lasting impact on all our lives.
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Source URL: http://www.thenation.com/article/172822/keystone-xl-presidential-decision-could-change-world
Links:
[1] http://www.tomdispatch.com/blog/175648/
[2] https://app.e2ma.net/app/view:Join/signupId:43308/acctId:25612
[3] http://digital.library.unt.edu/ark:/67531/metadc98034
[4] http://www.350.org/
[5] http://www.nytimes.com/gwire/2011/08/19/19greenwire-protest-makes-canada-to-us-pipeline-project-ne-69344.html
[6] http://www.tomdispatch.com/blog/175435/bill_mckibben_jailed_at_the_white_house
[7] http://www.tomdispatch.com/post/175417
[8] http://www.guardian.co.uk/environment/2011/jul/11/us-pipeline-oil-yellowstone
[9] http://www.nytimes.com/2012/01/19/us/state-dept-to-put-oil-pipeline-on-hold.html
[10] http://www.ogj.com/articles/2013/01/senators-urge-obama-to-promptly-approve-keystone-xl-pipeline.html
[11] http://action.sierraclub.org/site/PageServer?pagename=forwardonclimate
[12] http://www.nytimes.com/2011/12/24/us/provision-may-halt-keystone-pipeline-but-oil-is-still-likely-to-flow.html
[13] http://www.eia.gov/countries/cab.cfm?fips=CA
[14] http://www.worldwatch.org/node/5287
[15] http://ngm.nationalgeographic.com/2009/03/canadian-oil-sands/kunzig-text
[16] https://subscribe.thenation.com/servlet/OrdersGateway?cds_mag_code=NAN&cds_page_id=122425&cds_response_key=I12SART1
[17] http://www.calgaryherald.com/business/Alberta+royalty+regime+take+steep+prices+sputter+energy/7847183/story.html
[18] http://www.upi.com/Business_News/Energy-Resources/2013/01/25/Alberta-faces-6-billion-bitumen-bubble/UPI-68911359131567
[19] http://www.nytimes.com/2012/06/14/science/earth/canada-seeks-new-ways-to-get-oil-reserves-to-market.html
[20] http://dealbook.nytimes.com/2012/12/07/canada-clears-15-billion-chinese-takeover-of-an-energy-company
[21] http://www.nytimes.com/2012/10/24/business/energy-environment/canadas-new-pipeline-woes.html
[22] http://naturecanada.ca/enews_mar10_enbridge.asp
[23] http://www.pressherald.com/news/Tars-sands-oil-opponents-march-in-Portland.html
[24] http://grist.org/climate-energy/no-keystone-xl-big-oil-will-just-take-the-train/

Confirmation Of Climate Hawk Kerry As Secretary Of State May Doom Dirty Keystone XL Pipeline

Author
Joe Romm

The Senate confirmed John Kerry as a Secretary of State by a vote of 94 to 3. I believe this is a turning point in the fight to stop the Keystone XL pipeline.

Once again, I do not think that a man who had dedicated his Senate career to fighting catastrophic climate change would start his term as Secretary approving the expansion of one of the dirtiest sources of fossil fuels in the world.

Keystone is a gateway to a huge pool of carbon-intensive fuel most of which must be left in the ground — along with most of the world’s coal and unconventional oil and gas – if humanity is to avoid multiple devastating impacts that may be beyond adaptation.

How precisely could Kerry lobby other countries to join an international climate treaty — perhaps his primary goal as Secretary — after enabling the accelerated exploitation of the tar sands? Yes, you can say that the United States already has no standing to cajole other countries into climate commitments when we’ve expanded oil and gas drilling as well as coal exports. But none of those were Kerry’s decision, whereas Keystone is.

Kerry starts as Secretary of State with a clean slate. But approving Keystone would be like dipping that slate into the dirtiest, stickiest tar imaginable — it could never be cleaned again. Certainly the three Senators from Big Oil who voted against him – Ted Cruz (R-TX), John Cornyn (R-TX), and James Inhofe (R-OK) — must think he isn’t going to be the friend to Texas Tea.

Here is what Kerry said on the subject of climate change in his confirmation hearing:

The solution to climate change is energy policy. And, the opportunities of energy policy so vastly outweigh the downsides that you’re expressing concerns about … You want to do business and do it well in America, you have to get into the energy race … I would respectfully say to you that climate change is not something to be feared in response to—the steps to respond to—it’s to be feared if we don’t … I will be a passionate advocate on this not based on ideology but based on facts and science, and I hope to sit with all of you and convince you that this $6 trillion market is worth millions of American jobs and we better go after it.

[see video clip]

I simply don’t think this climate hawk will recommend that Keystone be approved.
Related Posts:

New Analysis Shows Simple Math: Keystone XL Pipeline = Tar Sands Expansion = Accelerated Climate Change

James Hansen slams Keystone: “Exploitation of tar sands would make it implausible to stabilize climate and avoid disastrous global climate impacts.”

Texas solidarity letter

Texas solidarity letter

September 26, 2012

RE: Statement on the Brutal Treatment of Keystone XL Tar Sands Pipeline Protestors in Texas

Members of Texas Law Enforcement and TransCanada CEO Russ Girling:

We the under-signed U.S. and Canadian organizations and First Nation leaders have learned that while protesting the construction of the Keystone XL tar sands pipeline, two US citizens over the course of five hours were repeatedly tasered, pepper sprayed and subjected to prolonged stress positions by the Wood County, Texas sheriff’s office with TransCanada personnel also on hand.

We object in the most strenuous terms to this brutal treatment of peaceful protestors, who are trying to protect their land and families from a dangerous and unnecessary project.

Regardless of our views on civil disobedience, there is not an inch of daylight between our views and those of the protesters on the dangers of this tar sands pipeline. Keystone XL threatens the health and livelihoods of families with tar sands oil spills and is part of an industry that threatens
communities with extreme weather. Tar sands oil undermines our clean energy choices.

These protests are part of rising, legitimate public concern with tar sands and tar sands pipelines.

People who are moved to peacefully express their opposition must not be subject to abuse or any type of violence.

We are watching events in Texas closely and we expect humane and respectful treatment of any further protestors.

Sincerely,

Burnaby Residents Opposed to KinderMorgan Expansion (BROKE)
http://brokepipelinewatch.ca

Statement on the Brutal Treatment of Keystone XL Tar Sands Pipeline Protestors in Texas

This letter is being sent to many groups in Canada and the United States and groups are being asked to sign it.

September 26, 2012

Statement on the Brutal Treatment of Keystone XL Tar Sands Pipeline Protestors in Texas

Members of Texas Law Enforcement and TransCanada CEO Russ Girling:

We the under-signed U.S. and Canadian organizations and First Nation leaders have learned that while protesting the construction of the Keystone XL tar sands pipeline, two US citizens over the course of five hours were repeatedly tasered, pepper sprayed and subjected to prolonged stress positions by the Wood County, Texas sheriff’s office with TransCanada personnel also on hand.

We object in the most strenuous terms to this brutal treatment of peaceful protestors, who are trying to protect their land and families from a dangerous and unnecessary project.

Regardless of our views on civil disobedience, there is not an inch of daylight between our views and those of the protesters on the dangers of this tar sands pipeline. Keystone XL threatens the health and livelihoods of families with tar sands oil spills and is part of an industry that threatens communities with extreme weather. Tar sands oil undermines our clean energy choices.

These protests are part of rising, legitimate public concern with tar sands and tar sands pipelines. People who are moved to peacefully express their opposition must not be subject to abuse or any type of violence.

We are watching events in Texas closely and we expect humane and respectful treatment of any further protestors.

Sincerely,

[organization names]

Climate Action Network Canada
Dogwood Initiative
Energy Action Coalition
Équiterre
Labor Network for Sustainability