The very word pipeline these days seem to put a lot of people on edge. It has somehow become a synonym of evil. Yet pipelines are simply infrastructure for transporting liquid and gaseous hydrocarbons from one place to another. The reason they are necessary is that oil and gas have to go places-places where they are needed by both supporters and opponents of the fossil fuel industry. We all use electricity.
There is now a growing problem with oil and gas pipeline capacity in North America, and the solution involves opponents embracing common sense, which says that you cannot "keep it in the ground" and have the lights on securely at the same time.
Geologist James Conca exemplifies the impossibility of eating your cake and having it too with New England. New England is very pro-renewables and anti oil, gas, and nuclear. It is closing its nuclear plants faster than it is adding renewable capacity, and it is paying through the nose for emergency LNG cargoes when electricity demand jumps. Why? According to Conca, it's because the states do not want the new pipelines they need and they also doesn't want the additional transmission lines from Canada to import more hydro-generated power. As a result, the region is suffering blackouts.
If you haven't been following the headlines from Canada recently, the situation is not much different there. A lot of people don't want the Trans Mountain oil pipeline to be expanded. They don't want any pipelines to be expanded or built. But another group of people finds that this pipeline's expansion is essential for turning Canada into a truly international oil player.
It's true that Canada's heavy oil is dirtier than gas, and that transporting it is more expensive than transporting regular crude because it needs to be diluted to a liquid form. But Canada needs the international markets as production continues to grow on both sides of the border, but demand is not sufficient to absorb all that Alberta's producers have to offer. Related: The Invisible Sweet Spot For Big Oil
What pipeline opponents like to point out is the danger of spills-a legitimate issue. Yet these same people seem unconcerned about the higher spill risks inherent in railway transportation, which Canadian producers are forced to resort to due to pipeline capacity shortage. If we are talking about statistically calculated risks, then these are the lowest with pipelines, especially in the age of environmentalism when every pipeline project is the object of very close scrutiny, causing pipeline builders to avoid cutting corners.
What pipeline proponents, on the other hand, like to point out is that a lot of the pipeline network in North America is oldÂ-some of it older than half a century. The older a piece of infrastructure, the higher the risk of a breakdown. Yet the anti-pipeline lobby is against that, too, for reasons that are not precisely clear.
Pipeline replacement should be easy enough, but it is not: Enbridge's proposal to replace the aging Line 3 was met with severe opposition, despite the fact that the replacement is supposed to make the pipeline safer. Pipeline replacement can also-in certain places-eliminate the need for new infrastructure, Conca notes. A minor expansion of the diameter of the pipes can increase the flow of oil through them quite substantially-by a factor of four, in fact.
One would think that people would choose the "lesser evil" of expanded pipelines to new ones, but it appears that anti-pipeline opposition is a very single-minded thing-its supporters want no pipelines, period. Of course, no pipelines at all would mean blackouts, and a lot of them-renewables have yet to fully replace oil and gas, and be as cheap-but somehow this doesn't seem to be a concern. Perhaps because it hasn't started happening everywhere and the reason it hasn't started happening is that there are pipelines.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More
Comments
When there is a genuine need for oil or gas pipelines to carry oil and natural gas to communities for generation of electricity and provision of fuels for transport, this, in my opinion, should trump any environmental or otherwise objections provided due care has been taken to prevent environmental disasters and possible leaks and spills.
We all agree that renewable energy is many times safer than using fossil fuels, nuclear energy and even building pipelines. But renewable energy will not manage, even in hundred years, to satisfy a significant part of humanity’s demand for energy. According to the 2017 BP Statistical Review of World Energy, renewable energy accounted to 3.16% of global primary energy needs. How long does humanity have to wait before renewable energy can replace fossil fuels and nuclear energy? If the choice is between a growing economy to provide jobs for our children and haphazard environmental concerns, then the choice is overwhelmingly in favour of the economy provided environmental concerns are heeded.
Let us take the cases of Germany and Canada where objectors got it absolutely wrong and where their objections backfired as in Germany or are depriving Canada’s economy from benefiting from Canada’s oil wealth and exports.
In Germany, the government under pressure from the Green lobby decided to decommission nuclear energy. But renewable energy’s contribution could not replace nuclear energy. As a result, German imports of cheap American coal for electricity generation have soared. So the question is which is the lesser evil: nuclear energy or coal?
There are some geopolitical objections to pipelines out of self-interest. A case in point is the United States objection to Nord Stream 2 gas pipeline which along with its twin Nord Stream 1 will be traversing the Baltic Sea bringing 110 bcm/y of cheap Russian gas supplies to Germany and the rest of the European Union (EU).
The US has always been opposed to Nord Stream II, which it views as Russia’s attempt to tighten its hold on Europe’s energy supplies. However, some in the EU have accused the US of wanting to displace Russia as a gas supplier to Europe.
Nord Stream 2 not only would help safeguard German energy security and needs but also the EU much cheaper than US LNG.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London
There will always be gullible people that have nothing going on in their lives of use and think they can be something special by grabbing onto someone else's message, thinking they are saving the world. It's up to the governments to see through these things, realize the source of the messages and not let foreign interests damage the economies of their country. Canada has been failing miserably at this for a long time.
Actually yes, it's entirely possible to "keep it in the ground" and keep the lights on securely at the same time. Both California and Arizona have already started contemplating replacing gas plants with battery storage (+ solar/wind) and solar + storage microgrids have been deployed in various locations worldwide as well. That trend is only guaranteed to increase as the price of both storage and renewable generation continues to fall and it becomes evident that natural gas plants actually are stranded assets as much as coal plants are.
Essentially, this debacle is costings billions of dollars to tax payers and the well being of canadians.
Hopefully this can be figured out sooner rather than later, as the oil boom will come back in the next few years at the rate we are at today.
Fascinating article, but do you suppose that perhaps, the oil industry, could use a Shot of Common Sense too?
Upstream, Midstream and Downstream, all separate segments of one big oil industry in the public's eye. So what any of the three segments do, effects the image of all three. They are not separate in the public's eye. BP's Gulf of Mexico Oil Spill was a disaster for all three, not just BP.
Oil has a bad image, that is to say it nicely. So where is their common sense?
For the last 13 years or so, Downstream has been locked in - The Ethanol Wars. Now for the common sense side of it. Ethanol mixed in gasoline provides a great octane boost, ethanol in gasoline reduces carcinogens in the gasoline, ethanol mixed in gasoline reduces toxic emissions cleaning the air, shall I go on? Yet the API, in all their wisdom, is fighting cleaner fuels and cleaner air, and in essence, is fighting the American Public. For What, market share? We are going to fight cleaner air for market share? Really, Common Sense? And we wonder why people don't want more pipelines? What any one segment of the oil industry does effects all three.
Tesla's fame is a reduced emission vehicle. You would think that API would catch on, but that would require - Common Sense. Something that is in just as short of supply in the oil industry, as it is in the general public.