U.S. Secretary of State Hillary Clinton got the file Monday as the State Department concluded a public comment period on its draft environmental impact statement, and will publish a final one some time this summer, before making a determination as to whether permitting construction of the cross-border TransCanada pipeline would be in the U.S. national interest.
The reality check is about the project called The Keystone Pipeline, that will carry 7-800,000 barrels per day of oil made from Canadian bitumen to the massive U.S. Gulf Coast petroleum hub, where refineries are particularly suited to process the heavy oil made from Canada’s bitumen resource.
Keystone Pipeline by State Map
The forcing of a mistake is coming from, with no particular surprise, the Environmental Protection Agency and the Department of Energy – which were both critical of the State Department’s initial environmental assessment.
The goal of the Keystone project is to connect the Alberta oil sands with U.S. Gulf Coast refiners who have invested billions of dollars to upgrade their plants so that they can process heavy grades of crude.
Today most of the Canadian crude goes to the U.S. Midwest where by 2015, IHS CERA, a consulting firm based in Cambridge, Mass., in advising the State Department, notes Canadian oil sands exports could exceed the refining capacity in the Midwest.
Add to that oil sands growth and new production from existing conventional oil reserves should drive Canadian crude oil production to about 4.7 million barrels per day by 2025. This is a result of a longer than expected oil price near $100 allowing higher conventional production and the inclusion of some additional in situ projects that were previously put on hold. That’s about 400,000 barrels per day higher than older forecasts.
This oil is going to sell somewhere.
API chief executive officer Jack Gerard said in a letter to Clinton pointing out, “Other nations will aggressively develop this key strategic resource for their future energy needs if we fail to act.” Warnings are rampant that in the absence of the Keystone pipeline, Canada will build alternative export routes to the West Coast to ship oil sands crude to the booming Chinese market. One can hardly blame them.
And there goes a great chunk of the U.S. oil energy security. One wonders if some of the folks in D.C. are Americans or a cynic might wonder if they’re subversives. That doesn’t even consider the cold, rude shoulder to the Canadians who put up with U.S. shenanigans with very little complaint. The Canadians have dealt with the U.S with a much better set of ethics than they’ve received in return.
The EPA’s and Energy Department’s comments don’t represent all of us or even very many Americans. As the age of oil winds down, there is little point in driving the cost of oil higher, increasing the economic risks, and abusing the neighbors.
Just to add damage to the U.S., the consequence of the EPA and Energy Department efforts would force the Gulf Coast refineries to use heavier crudes from Mexico, Venezuela, Brazil, Colombia and Saudi Arabia. Some of these countries are rather unfriendly to the people of the U.S. The logic of bureaucrats defies common sense and serves to plunge the U.S. into jilting the best of friends and sending our hard earned cash to those who wish us ill.
Oil products move in a world market from supplies to users. The market is mostly about price. But in the hard spots or supply peaks, having a good connection to supplies matters for avoiding shortages or local price extremes. It much more likely that a serious disruption will occur with ocean going tanker loads than a pipeline.
The disinformation piles up as well. Prominent environmentalist Bill McKibben and NASA climate scientist James Hansen are using over estimated numbers like “the tar sands are estimated to contain the (carbon) equivalent to about 200 ppm CO2.” To increase CO2 concentration by 200 ppm, you would have to extract, upgrade, refine, and burn about 2.5 trillion barrels of oil sands at today’s emissions intensities. That’s more than double all the oil used in history so far. It also assumes that every drop of the oil sands will get burned while as this moment only 10-20 per cent of that is economically extractable, and only a small fraction of these economic reserves are currently under development.
Oddly, the U.S press missed the easy math. It will take a while to get through all of the oil sands. At today’s production rate of about 2 million barrels per day, 2,500,000 million barrels/730 million barrels per year = about 3,425 years. Even at 5 million barrels per day it takes 1,362 years. Well? And someone is going to use the oil any case.
Is it better to move oil in a pipe buried in the ground a few hundred miles or floating about in ships going halfway around the world? What seems safer to you?
Taxpayers need to pull the plug on some agencies’ budgets that shoot off their comments without thinking or realizing how stupid they sound, or acting against the interests of the citizens. It’s quite a mistake to even lend the nuts an ear, but other bureaucrats do. Sometimes it’s a relief that government does move in slow motion.
By. Brian Westenhaus of New Energy and Fuel