The House is bringing back the Keystone pipeline

mege

A pipeline is just one of the most efficient solutions to transport the crude oil. They could build a pipeline to one of their own coastal refineries or put it on tankers. (think about how the US gets all of it's own crude from non-continental sources)

aquitaine

I have a question. The hoopla over this is that it runs over a major aquifer, right? So why not just change the course of the pipeline to go around it?

EDIT: And something of note is that the states this thing runs through are about as red as they come, its not just democrats that oppose this.

CaptFirePanda

I'm not sure what the point is of emphasizing Canadian support for the oil sands. Are you suggesting a national movement of some sort?

We are not discussing shale oil here. These deposits are bitumen-rich sands. The differences in extraction and production of bitumen versus shale oil are significantly different.

Also, there are significant enough pipelines to and from the Fort McMurray area to transport crude bitumen to the rest of Alberta and then to the United States. Keystone would be one of many pipelines.

I'm assuming the answer to your question is basically economics as I'm sure a less sensitive route that cost less would be the first choice for TransCanada - I could be wrong, however.

One point to note is that crude bitumen is diluted with natural gas condensate (naptha) or syntheic naptha/crude oil into a substance known as dilbit . This reduces the viscosity of the crude bitumen in order to allow for it to be transported via pipeline. Even in this less viscous state, it would be very difficult for dilbit to penetrate the 30+ meters of overburden into the Ogallala aquifer.

The risk does exist, however, and this has been addressed by the more than 50 special conditions that TransCanada has accepted (laid out by the Pipeline and Hazardous Materials Safety Administration here).

I disagree with you here. The cost of refineries/upgraders (crude bitumen needs to be upgraded before it is refined) is certainly a consideration, but it more the economics; more precisely the heavy crude versus light crude differential. Even with incentives in Alberta (Bitumen Royalty In-Kind program, amongst others) it is not economic to build more refineries and upgraders near the source. In fact, Syncrude and Suncor have their facilities and, as the major producers, there really isn't anyone else who would have enough capital or see enough production to justify building these facilities. The rest, who are not mining the bitumen but are producing it through Steam-Assisted Gravity Drainage techniques are forced to transport the crude bitumen as dilbit to the US because of these limitations.

Yes, the pipeline will do little for the US economy, but if you have a concentrated area where significant amounts of dilbit are arriving via pipeline, it may be very well worth building upgrading/refining facilities. If so, this has the potential for huge economic contributions.

Topher925

When you consider the potential of ecological damage local to the pipeline, yes sure, you can probably account for mistakes being made but not something completely detrimental to the environment. But as stated before, my problem with the whole situation isn't really the pipeline itself, its tapping the second largest oil deposit in the world and doing so in mass. The Keystone XL would enable, or really be the first step, for that to happen. Increasing the supply of oil to the market would decrease fuel costs and therefore increase oil consumption. And that is a real environmental danger.


Whoops, I meant to say oil sands, not shale oil.

Yes, there is already a significant amount of pipelines in the McMurray area, but the Keystone pipeline would add another 900,000bpd of capacity to already existing ~2mbpd of capacity. However, its estimated that the capacity of current pipelines cant be reached until at least around 2025. Either way, the Keystone pipeline has the potential to nearly double current US imports rate of tar sands oil (~1mbpd).

WhoWee

Perhaps the solution is to forget about running a pipeline through Nebraska and build a new refinery somewhere on the Great Lakes instead?

CaptFirePanda

Well, OPEC still has plenty of ways to influence oil pricing and an increased supply from Canada would likely be met by decreased supply from OPEC. Conversely, OPEC could potentially 'flood' the market making it quite uneconomic for oil sands production. Either way, they've got many ways to influence pricing.

Also, with Venezuela's newest reserve numbers, they are the largest with Saudi Arabia and Canada 2nd and 3rd, respectively.

The same holds true for the proposed Northern Gateway pipeline - current carrying capacity exceeds production and will likely do so for a number of years. This begs the question, then, of why now? Why are these pipelines being proposed now with hopes of having them built immediately? I understand that it is good to have a plan in mind, but in this case the timing far exceeds what the typical company would be willing to risk based on the amount of capital required up front.

I have many potential answers, but no real proof one way or another. I do think much of this has to do a potential "energy war". Of course, you'd have to buy into Peak Oil and many other things before I could even begin to pitch these ideas. Plus, it would likely be a discussion left to another thread or elsewhere.

Why would turning the pipeline 90 degrees and sending crude bitumen to the Great Lakes be a solution?

mheslep

I'm thinking that the US is the largest producer in the world now,no? That is, crude + nat gas liquids + ethanol. I believe Russia and Saudi are about 10 m bbl per day, US w/ ethanol is, i think, a little more and rising. Ethanol is 1m bbl per day.

ThomasT

So it's likely that the pipeline will be ok'd by the US DoS and the US president elect in early 2013, right? That's my current opinion.

ThomasT

I see your point. But it's pretty much inevitable as far as I can tell. Maybe it would be a good thing if all resources were focused on developing alternative, renewable energy sources. But that's not likely to happen, imho. There's a vast existing infrastructure and employment base and economy that depends on exploiting fossil fuel sources.

JonDE

IMO this is likely, although I don't agree that it was completely a political move. I'm sure part of it was not trying to pick sides between unions and enviromentalists and likewise lose votes. Yet, I think part of it was actually trying to see if there was another alternate route that was safer.
I think this has not been mentioned here but maybe on another thread (or maybe on another message board, I get confused easily) but Canada had announced intentions of going around the Keystone pipeline and the presidents approval. If I remember correctly, they were going to use pipeline already in place to cross the US-Canada border. Then expand the pipeline from there to get to the gulf coast refineries. I will try and find an article that shows this.

WhoWee

Has anyone noticed if the oil (or coal) goes to China and it's burned - we only have one atmosphere? Perhaps the Canadian leaders will be able to make a decisionabout running a pipeline (across Canada) to (either a port or) a new refinery (US or Canada) on the Great Lakes?

SixNein

I think renewable energy will look better and better as we head into the future. At a certain point, the economics of renewable energy will look better than fossil fuel. In addition, continuously rising gas prices is going to inject a great deal of poison into the political process. And only God knows how the global economy will respond. My guess is a lot of demand destruction.

The simple fact that we are discussing tar sands and shale should indicate a lifestyle change up ahead.

CaptFirePanda

This doesn't answer my question at all.

Also, please note that the US is the second largest emitter of CO₂, behind only China.

WhoWee

Running the pipeline across Canada to a new refinery would solve three problems.
1.) no need to run a new pipeline in the US
2.) increased refining capacity
3.) greater energy independence from ME sources
Bonus - we get the oil instead of China.

mheslep

Per person the US is behind several countries including Canada.

CaptFirePanda

1) There is already a Keystone Pipeline running from Alberta (Hardisty) into the US. The Keystone XL project is an extension on the pipeline in order to transport it into Texas;
2) Refining capacity is a result of current pipeline operation. The glut of crude going into the Mid-west and the inability to get crude to the Gulf Coast from Cushing has put strain on refining in both areas. The spread in WTI and Brent pricing is due to the market access.
3) Canada already exports a significant amount of it's production to the US (it imports the most to the US currently). Getting the crude bitumen to the Mid-west will do very little, if anything, to reduce US imports from the Middle East.

Just because the oil is shipped to the Mid-West does not mean it isn't going to be sold to China.

CaptFirePanda

Please show me what your source is for this. Everything I find does not support this at all.