The House is bringing back the Keystone pipeline

[Topher925]

Isn't world demand expected to decrease with green energy initiatives?

Which demand are you referring to? Total energy demand, no, most definitely not. Energy demand from fossil fuels, it depends on who you ask. Some say we are already at peak consumption for oil. I would disagree. The world has roughly 2 billion cars on the road and that numbers climbing with India and China developing infrastructure. You could argue that many of the 2 billion gasoline fueled cars will be replaced with electric cars in the near future (which I doubt they will) but even if they are those cars need to be recharged from some energy source.

Japan and Germany are in the process of shutting down all of their nuclear power plants and replacing that energy demand with coal. I believe China is still bringing on a coal fired power plant every week. So no, I don't think the demand is expected to decrease in the near future.

 

[gravenewworld]

Nothing more than a temporary band aid for a hemorrhage. OPEC could just cut back on oil production and prices would stay the same. Much of the increases for oil are due to deregulated oil trading markets that have gotten way out of hand. For 3 years, the CFTC hid the fact that the 2008 oil bubble prices were due in large part to manipulation by traders, the public should be outraged. They're now doing the same thing again, and nothing will change until the hammer comes down and we start really going after excessive speculation and start regulating again.

http://zfacts.com/p/35.html


Coincidence the rise in gas prices comes after 2000, which is when we did most of our deregulating? I think not. Demand is the lowest it has been since 1997.

Read more about ICE down in Atlanta here also:

http://seekingalpha.com/article/172797-the-global-oil-scam-50-times-bigger-than-madoff

 

[mheslep]

Isn't world demand expected to decrease with green energy initiatives?

Buy that I assume you mean more efficient end use and not 'green' production (e.g. solar, wind, etc)? In the developed world yes. In the developing world no energy demand is not going to decrease.*
http://www.google.com/publicdata/ex...region&tstart=730875600000&tend=1267333200000

*One caveat: the developing world will not have to follow the same wasteful path as the West did, as it can go directly to cell phones vs land lines, modern jet and car engines, combined cycle gas electric generation, etc.

 

[WhoWee]

If the world's supply of oil is increased - it (alone) should not increase prices - can we all agree on this point?

The second point is world demand - it is increasing and that will lead to higher prices - can we all agree on this point?

 

[mheslep]

...For 3 years, the CFTC hid the fact that the 2008 oil bubble prices were due in large part to manipulation by traders,
...

Coincidence the rise in gas prices comes after 2000, which is when we did most of our deregulating? ...

I scanned your links but say no mention of the CFTC hiding anything, nor that gasoline trading was deregulated after 2000. Are you referring to another source?

 

[gravenewworld]

I scanned your links but say no mention of the CFTC hiding anything, nor that gasoline trading was deregulated after 2000. Are you referring to another source?

ICE opened up in 2000. Before ICE opened, the typical American family spent 7% of their disposable incomes on food and fuel, after ICE it skyrocketed to 20% and continues to climb. ICE is unregulated and outside of US jurisdiction. It only takes a quick search to see who set up ICE: Goldman Sachs, JP Morgan, BP, etc. 1999-2000 was also the year we deregulated derivatives trading via the Commodities Futures Modernization Act and the Financial Services Modernization Act. http://www.sanders.senate.gov/newsroom/news/?id=e802998a-8ee2-4808-9649-0d9730b75ea4

"This report clearly shows that in the summer of 2008 when gas prices spiked to more than $4 a gallon, Goldman Sachs, Morgan Stanley, and other speculators on Wall Street dominated the crude oil futures market causing tremendous damage to the entire economy," Sanders said. "The CFTC has kept this information hidden from the American public for nearly three years. That is an outrage.
The American people have a right to know exactly who caused gas prices to skyrocket in 2008 and who is causing them to spike today. The CFTC claims they need more data to impose speculative position limits as required by Dodd-Frank. That is laughable. The American people need action to bring down gas and oil prices and they need it now, which is why I have introduced legislation with eight co-sponsors to do just that."

Before anyone thinks supply and demand run oil, hell most commodity prices in general, they should first learn about ICE and the rampant excessive speculation that goes on within these unregulated trading avenues through which we're all being practically robbed. Emerging economies and more demand for gas do increase the price of oil, but the traders on ICE are probably the biggest culprits that are robbing the poor to make the rich even more rich. Senator Sanders seems to be a refreshing change and is at least trying to be a knight in shining armor for the regular American simply trying to get by.

The main point is that we can drill for oil here all we want. It won't do much at all to stop oil bubbles from happening over and over and over again until we start clamping down hard on shadow derivatives markets that are making the prices for almost all commodities go up without regards to the laws of supply and demand.

 

[WhoWee]

Personally, after participating in this thread, I'm more convinced the only way to drop the price of gasoline in the US is to drill in North America and add refineries.

 

[Alfi]

Personally, after participating in this thread, I'm more convinced the only way to drop the price of gasoline in the US is to drill in North America and add refineries.

Self reliant and self producing. Go for it.
( ummm how does the phrase go ? ... Drill Baby Drill. )

No need any additional pipelines in that case.

 

[feathermoon]

At some point, a continuous increase in the world supply with a constant demand (decreasing due to fuel efficiency and alternatives and offset by increased consumption in Asia) - will result in lower prices.

By a penny or two/g, tops? You think the increase of 30 cents in the Midwest won't wholly offset that nation wide, when so much of our food is produced and shipped from the Midwest? Turn off your blinders buddy!

OPEC has already increased or decreased their own production to stabilize oil prices before. They don't like the 1-2 cent increase and even it may not happen (though I doubt they'd bother with such a small decrease.)

 

[feathermoon]

If the world's supply of oil is increased - it (alone) should not increase prices - can we all agree on this point?

The second point is world demand - it is increasing and that will lead to higher prices - can we all agree on this point?

Neither of these points you want us to agree on correlate to the original topic. You're burying the issue with unrelated posts.

 

[feathermoon]

Personally, after participating in this thread, I'm more convinced the only way to drop the price of gasoline in the US is to drill in North America and add refineries.

You haven't been reading the same topic then.

 

[WhoWee]

Neither of these points you want us to agree on correlate to the original topic. You're burying the issue with unrelated posts.

From the OP:
"I know its typical of corporate america and government to put money for the wealthy ahead of the well being of everyone else on the planet, but come on."

How would lower gas prices not benefit more people than just the wealthy?

 

[CaptFirePanda]

No offense, but how complex is this? There is an oversupply in the Midwest coupled with low demand, buffering it from world oil prices. The XL will alleviate this oversupply, pumping oil south. This will raise prices in the Midwest. In this regard, the Xl will have a direct negative impact on the economy. Does this make sense? Do you know what we're talking about now?

It's actually quite complex. The WTI/Brent differential can/will have huge impacts on US futures if it keeps spreading the way it is. The glut in the Midwest may pose a short-term gain in depressed gasoline prices, but overall it's going to hurt the economy more than it will benefit it.

As you'll see from other stuff the Doc has posted, reversing flow from Cushing out to the coast is the other solution to this problem. Keystone isn't even required (well, it is, but the Seaway reversal offsets things to a degree.

So, sure.. the blue collar argument is having to pay more to fuel their daily commutes. In the long run, however, it is a far more complex issue that prices at the pump.

By the way, your condescension isn't appreciated. My questions were legitimate questions because you seem to be looking at a rather small and short-term benefit from low WTI prices.

Indeed. It can be difficult some times to find information sources not tainted by a bad image or money. I commiserate with you (especially if you support the industry! I daresay not many independent researchers would have a confirmation bias towards it). I would personally LOVE to hear some good news research from a Oil & Gas funded source, provided its believable.

The confirmation bias goes both ways. My support goes so far as to present facts rather than the rhetoric or sensationalism that accompanies this sort of discussion. I would assume that if you are willing to believe Pembina reports, then you would categorically dismiss any information to the contrary.

In this case, however, the numbers I mentioned would seem safe. In fact, as the area of drilling and mining increases, the area of reclamation will proportionally decrease. Not just because mining is ongoing, but because reclamation takes time. Tailings ponds can take decades to settle alone for beginning reclamation, from what I've read, besides whether they are fully reclaimable anyway!

How would the numbers seem safe? If you are mining an area of ~40000 hectares why would it be reclaimed if it is still active? To report that it has not been reclaimed is misleading and pointless. Drying processes significantly speed up the process of recovering tailings, so decade long time frames are an exaggeration (3-5 years for earlier traditional settling methods). The idea of whether something can be fully reclaimed exists for every land disturbance, not just oil sands operations. Open pits, tailings, etc... associated with other activities have just as much impact and just as much reclamation potential as the oil sands.

Mining in the Athabasca region began in 1967. Given that mining seems to be the more extreme of the extraction methods, I feel this was hardly a point worth making.

What point exactly? The point that you cannot reclaim active mining operations?

Yep, still seems like it'd be in the U.S.'s best interest to not move this project forward to me.

Like I've mentioned above, it certainly is within the best interests of the US to do something about the Midwest glut. With Keystone XL delayed, the industry has obviously found other ways around this problem.

 

[mheslep]

Personally, after participating in this thread, I'm more convinced the only way to drop the price of gasoline in the US is to drill in North America and add refineries.

And/or use less. Supply and Demand. One or the other must impact the US price given liquid fuel does not quite yet flow immediately around the globe unimpeded to the highest bidder. By the same measure there's a limit on how much US behavior can impact gasoline price because China and India are out there.

 

[WhoWee]

And/or use less. Supply and Demand. One or the other must impact the US price given liquid fuel does not quite yet flow immediately around the globe unimpeded to the highest bidder. By the same measure there's a limit on how much US behavior can impact gasoline price because China and India are out there.

Back in 2006, NPR agreed with you.
http://www.npr.org/templates/story/story.php?storyId=5365439

"What about long-term fixes?

They're the same: increase supply and decrease demand. But in the long term, we have more opportunities to do this, by developing new oil fields, building new refineries, replacing gas guzzlers with gas sippers, and searching for alternative fuels."

 

[Topher925]

Personally, after participating in this thread, I'm more convinced the only way to drop the price of gasoline in the US is to drill in North America and add refineries.

OK, but who said that we need to drop the price of gasoline, or even want to?

From the OP:
"I know its typical of corporate america and government to put money for the wealthy ahead of the well being of everyone else on the planet, but come on."

How would lower gas prices not benefit more people than just the wealthy?

And this was taken WAAAYYYY out of context. By the well being of everyone on the planet I was referring to the health of the environment, not american's check books.

 

[WhoWee]

OK, but who said that we need to drop the price of gasoline, or even want to?

And this was taken WAAAYYYY out of context. By the well being of everyone on the planet I was referring to the health of the environment, not american's check books.

I thought there were 3 reasons Americans supported the pipeline - 1.) lower gas prices, 2.) jobs, and 3.) energy independence from the ME?

 

[Evo]

I thought there were 3 reasons Americans supported the pipeline - 1.) lower gas prices, 2.) jobs, and 3.) energy independence from the ME?

Can you link to the studies that support those ideas?

 

[Topher925]

I thought there were 3 reasons Americans supported the pipeline - 1.) lower gas prices, 2.) jobs, and 3.) energy independence from the ME?

OK, that's nice, but I do NOT support the Keystone pipeline!

And as has been being discussed in this thread, the Keystone pipeline project has been accused of - 1) increasing gas prices, 2) producing not many jobs at all, and 3) would not do diddly squat from providing energy independence from the ME (ALL the oil would be exported form the US)

 

[WhoWee]

Can you link to the studies that support those ideas?

What other possible reasons would Americans want the pipeline - other than lower prices, jobs, and energy independence? These have been the expectations discussed in the media.

Jobs were anticipated:
http://abcnews.go.com/Politics/OTUS/president-obama-rejects-keystone-xl-pipeline/story?id=15387980

Lower gas prices are/were anticipated:
http://www.speaker.gov/Blog/?postid=281784

This touches on an expectation of lower prices and energy independence:
http://www.huffingtonpost.com/2012/02/28/keystone-xl-obama-critics_n_1305569.html

"With retail gasoline prices on a path to top $4 a gallon soon and possibly touch $5 if political tensions with oil-producing Iran get worse by midyear, voter frustration with Obama likely will rise - with or without Keystone being built.

"Delaying the Keystone XL pipeline is not the reason gasoline prices have been going up, and moving forward on a variant of Keystone will not bring them down," said Michael Levi, an energy analyst with the Council on Foreign Relations. "When it comes to today's gas prices, the Keystone fight is a sideshow," he said.

As Democrats in Congress perked up over the TransCanada announcement, Republican Senator Lisa Murkowski went to the floor of the Senate to squash any celebration. She complained that in her home state, the Trans Alaska Pipeline was only "half full" with oil because Democrats had blocked new drilling in the environmentally sensitive Arctic National Wildlife Refuge as well as some offshore drilling projects.

Obama is countering that there are no easy answers to rising energy prices and that "drill baby drill," a policy of expanded domestic oil exploration advocated by Republicans, will not end U.S. dependence on foreign oil.

But that "is a big communications challenge for him" at a time when the cost of filling the gas tank is rapidly escalating, said the senior Senate Democratic aide."

 

[mheslep]

Can you link to the studies that support those ideas?

What other possible reasons would Americans want the pipeline - other than lower prices, jobs, and energy independence? These have been the expectations discussed in the media.

Jobs were anticipated:
http://abcnews.go.com/Politics/OTUS...ommented on the southern end of the pipeline!

The President welcomes today’s news that TransCanada plans to build a pipeline to bring crude oil from Cushing, Oklahoma, to the Gulf of Mexico. As the President made clear in January, we support the company’s interest in proceeding with this project, which will help address the bottleneck of oil in Cushing that has resulted in large part from increased domestic oil production, currently at an eight year high. Moving oil from the Midwest to the world-class, state-of-the-art refineries on the Gulf Coast will modernize our infrastructure, create jobs, and encourage American energy production. ...

followed by , "But as we made clear", blah blah, blah blah blah.

 

[Topher925]

What other possible reasons would Americans want the pipeline - other than lower prices, jobs, and energy independence? These have been the expectations discussed in the media.

Jobs were anticipated:
http://abcnews.go.com/Politics/OTUS/president-obama-rejects-keystone-xl-pipeline/story?id=15387980

Lower gas prices are/were anticipated:
http://www.speaker.gov/Blog/?postid=281784

This touches on an expectation of lower prices and energy independence:
http://www.huffingtonpost.com/2012/02/28/keystone-xl-obama-critics_n_1305569.html

"With retail gasoline prices on a path to top $4 a gallon soon and possibly touch $5 if political tensions with oil-producing Iran get worse by midyear, voter frustration with Obama likely will rise - with or without Keystone being built.

"Delaying the Keystone XL pipeline is not the reason gasoline prices have been going up, and moving forward on a variant of Keystone will not bring them down," said Michael Levi, an energy analyst with the Council on Foreign Relations. "When it comes to today's gas prices, the Keystone fight is a sideshow," he said.

As Democrats in Congress perked up over the TransCanada announcement, Republican Senator Lisa Murkowski went to the floor of the Senate to squash any celebration. She complained that in her home state, the Trans Alaska Pipeline was only "half full" with oil because Democrats had blocked new drilling in the environmentally sensitive Arctic National Wildlife Refuge as well as some offshore drilling projects.

Obama is countering that there are no easy answers to rising energy prices and that "drill baby drill," a policy of expanded domestic oil exploration advocated by Republicans, will not end U.S. dependence on foreign oil.

But that "is a big communications challenge for him" at a time when the cost of filling the gas tank is rapidly escalating, said the senior Senate Democratic aide."

None of these sources provide any real argument or reasoning as to how the Keystone pipeline will lower gas prices and provide better energy security from the ME. They're really just articles about bashing President Obama for his rejection of the pipeline. And the parts where they do touch on the amount of jobs that would be created, they don't state if they are permanent or temporary. Once the pipeline is built, where will those "thousands" of jobs go?

TransCanada stated in THEIR VERY OWN APPLICATION for the pipeline that this project is expected to increase oil prices in the US. They also very clearly stated that all the oil refined from the pipeline would be exported. How would that help the US obtain energy security from the ME?

 

[WhoWee]

None of these sources provide any real argument or reasoning as to how the Keystone pipeline will lower gas prices and provide better energy security from the ME. They're really just articles about bashing President Obama for his rejection of the pipeline. And the parts where they do touch on the amount of jobs that would be created, they don't state if they are permanent or temporary. Once the pipeline is built, where will those "thousands" of jobs go?

TransCanada stated in THEIR VERY OWN APPLICATION for the pipeline that this project is expected to increase oil prices in the US. They also very clearly stated that all the oil refined from the pipeline would be exported. How would that help the US obtain energy security from the ME?

My point was these 3 items are the ones discussed in the media and debated by politicians - these are the talking points people are focused on - not a technical argument. If the pipeline won't create jobs, or lower the price of fuel, or help achieve energy independence from the ME - why would anyone want it?

 

[feathermoon]

My point was these 3 items are the ones discussed in the media and debated by politicians - these are the talking points people are focused on - not a technical argument. If the pipeline won't create jobs, or lower the price of fuel, or help achieve energy independence from the ME - why would anyone want it?

They wouldn't, unless there was a large disinformation campaign surrounding it, telling them to believe otherwise.

 

[Topher925]

They wouldn't, unless there was a large disinformation campaign surrounding it, telling them to believe otherwise.

Hold on a sec feathermoon, are you saying that government and big oil companies would lie to the public using main stream media outlets in order to make a profit at the public and the environments expense? Why I can't believe anyone would propose such wild allegations!

Yes but there's no need to go to other media sources, the White House covered it nicely Monday when it commented on the southern end of the pipeline!

I'd be lying if I said this doesn't irk me a bit, but it really isn't the same situation. You sited yourself that the oil produced from Cushing would be sold domestically, not globally. Also Cushing doesn't have stock piles of tar sands oil, its crude, which was the biggest issue of the Keystone pipeline for me.

 

[CaptFirePanda]

My point was these 3 items are the ones discussed in the media and debated by politicians - these are the talking points people are focused on - not a technical argument. If the pipeline won't create jobs, or lower the price of fuel, or help achieve energy independence from the ME - why would anyone want it?

The pipeline will create jobs - it doesn't build and monitor itself.

Reducing Middle East imports - Canada already supplies a large amount of its exports to the US; there isn't much room to increase those exports. As for Middle Eastern dependance, a lot of this has to do with policy. Currently, US imports from the Mid-East are at ~21% or so.

THE WTI/Brent differential is a crucial facotr in all of this. When WTI is selling at an almost $20 discount. This differential is not a good thing from the perspective of exploration and production in the US. Companies with global interests, would scale back US operations in favour of exploiting plays that are going to fetch them Brent prices.

 

[mheslep]

Hold on a sec feathermoon, are you saying that government and big oil companies would lie to the public using main stream media outlets in order to make a profit at the public and the environments expense? Why I can't believe anyone would propose such wild allegations!



I'd be lying if I said this doesn't irk me a bit, but it really isn't the same situation. You sited yourself that the oil produced from Cushing would be sold domestically, not globally.

So? In that way how do Cushing stockpiles differ from tar sands oil? Neither is confined solely to domestic consumption, but will have a sold more cheaply domestically. Pile up enough of either and local producers will find away to ship it elsewhere.

 

[CaptFirePanda]

I think Topher is speaking from an environmental perspective.

 

[Oltz]

The pipeline will create jobs - it doesn't build and monitor itself.

Reducing Middle East imports - Canada already supplies a large amount of its exports to the US; there isn't much room to increase those exports. As for Middle Eastern dependance, a lot of this has to do with policy. Currently, US imports from the Mid-East are at ~21% or so.

THE WTI/Brent differential is a crucial facotr in all of this. When WTI is selling at an almost $20 discount. This differential is not a good thing from the perspective of exploration and production in the US. Companies with global interests, would scale back US operations in favour of exploiting plays that are going to fetch them Brent prices.

Capt you hit the nail on the head with the last paragraph. Regardless of where the oil is sold bringing a new supply to market and to efficient refining will reduce global prices and WTI will still be able to trade below Brent. It is not uncommon to throttle production when the trade gap becomes to large. To lower prices we need to expand all 3 parts of the supply side production,refining, and transport (both to refining and to market).

Reducing demand globally is not in our control.

The Tar sands will be sold and used no matter what "we" want would you rather nobody in the US have any employment from it?

People work in refineries people maintain pipelines people transport the finished fuel...we have the option to make those people Americans.

Plus it does give us access to another supply when the ME gets temperamental with its supply as well as adding a diplomatic chip to conversations with china by giving us some influence on the supply of fuel to them.

 

[feathermoon]

Capt you hit the nail on the head with the last paragraph. Regardless of where the oil is sold bringing a new supply to market and to efficient refining will reduce global prices and WTI will still be able to trade below Brent. It is not uncommon to throttle production when the trade gap becomes to large. To lower prices we need to expand all 3 parts of the supply side production,refining, and transport (both to refining and to market).

Reducing demand globally is not in our control.

The Tar sands will be sold and used no matter what "we" want would you rather nobody in the US have any employment from it?

People work in refineries people maintain pipelines people transport the finished fuel...we have the option to make those people Americans.

Plus it does give us access to another supply when the ME gets temperamental with its supply as well as adding a diplomatic chip to conversations with china by giving us some influence on the supply of fuel to them.

I refer you back to this Cornell study showing a potential reduction in employment due to the XL. I'm not positive jobs is a good argument unless you can point out some flaw with the study.

We have no influence in the supply of fuel to China if the XL goes through. Contracts are already in place for exportation in that regard.