November 6, 2015


Why the Keystone XL pipeline doesn't matter (Tomas Walkom,  Nov 19 2014, Toronto Star)

[W]hen the rhetoric is stripped away, it does not matter that much.

This particular pipeline will not bring the U.S. significantly closer to what proponents call energy independence.

The U.S. already imports 2.5 million barrels of Canadian crude oil every day. Even without Keystone, Alberta bitumen will continue to power American cars,

America's energy future, however, lies not in Alberta but in North Dakota. Domestic U.S. shale oil and gas production is growing handsomely. The Paris-based International Energy Agency predicts that the U.S. will be a net oil exporter by 2020.

For Canada, a pipeline matters more. Alberta bitumen producers face bottlenecks getting their heavy oil to markets. A pipeline to the coast would give them higher profits.

But the pipeline need not be Keystone and the coast need not be on the Gulf of Mexico. The truth is that even if Keystone fails, a pipeline from the tar sands to tidewater will be built. The Liberals, Conservatives and New Democrats disagree on many things. But all agree that the so-called Energy East pipeline -- from Alberta to New Brunswick -- should go ahead.

Similarly, a world with no Keystone will not much affect carbon emissions. As long as there is some method of getting Alberta heavy crude to markets -- by train, truck or pipeline -- tarsands production will go on.

Canada Pushes Ahead with Alternatives to Keystone XL (Bobby Magill, 3/30/15, Climate Central)

[T]here are myriad other projects on the table designed to do exactly what Keystone XL was designed to do: transport Canadian tar sands oil to refineries.

Those pipelines, both in the U.S. and Canada, are being designed to move the oily bitumen produced from the tar sands to refineries in Texas and eastern Canada, and to ports on the Pacific Coast where the oil could be shipped to Asia.

Combined, the pipelines would be able to carry more than 3 million barrels of oil per day, far in excess of the 800,000 barrels per day that TransCanada's Keystone XL is designed to carry.

Of course it's insignificant, but the hilarious thing is that environmental groups got so caught up in the fight that they're giving the UR credit he doesn't warrant.

Obama Didn't Kill Keystone XL : Innovation did. ( Daniel Gross, 11/06/15, Slate)

According to the U.S. Energy Information Administration, thanks to the advent of fracking in Texas, North Dakota, and elsewhere, U.S. oil production rose from 5 million barrels per day in 2008 to 8.7 million barrels per day in 2014, a 74 percent increase. This happened at a time when consumption has remained essentially flat. Which means the U.S. is well on its way to being self-sufficient. Oil imports fell about 70 percent between 2005 and 2014. As the EIA notes, in 2014, "Net imports accounted for 27% of the petroleum consumed in the United States, the lowest annual average since 1985." Yes, we still import plenty of oil from Mexico and Canada. But American refineries aren't crying out for new external sources of supply. That's the first strike against Keystone.

Thanks to increased domestic production, and the fact that U.S. producers are essentially prohibited from exporting oil, prices have remained low. The spot price of West Texas Intermediate crude is now below $50 per barrel, about half what it was a couple of years ago. Which means it doesn't make all that much sense to build a pipeline that will carry oil that is comparatively expensive to produce. And as the Wall Street Journal reported, the estimated break-even point for a newly initiated project in the oil sands is $65 per barrel. Another strike against Keystone.

Of course, it would be foolish to make long-term decisions based solely on the market fluctuations of the past couple of years. It's entirely possible that the price of oil will skyrocket in the years to come. But even that won't mean there will be a sudden need to bring in large new supplies of oil. As I've pointed out in this column, there is a quiet revolution going on in American transportation. Ten years ago, pretty much the only way to move a vehicle in America was to put petroleum-derived gasoline in the tank and burn it rather inefficiently.

That's changing. As they race to meet tough new mileage standards (thanks, Obama!), automotive engineers are experimenting with new materials like aluminum, introducing features like stop-start technology, and generally getting smarter about efficiency. The upshot: The typical car sold in the U.S. this year is about 25 percent more fuel-efficient than the typical car sold in 2007, according to data compiled by Michael Sivak and Brandon Schoettle at the University of Michigan Transportation Research Institute. This trend is likely to continue.

Meanwhile, oil is slowly being displaced as a transportation fuel by natural gas--not in cars, but in trucks and buses. Each day, the website of trade publication NGTNEWs has news of giant corporate delivery fleets, refuse-collection fleets, and municipal bus systems putting hundreds of vehicles into service that will never use a gallon of gasoline. And let us not forget that each month, about 10,000 cars are sold that run entirely or partially on electricity. The changing shape of future demand is a third strike against Keystone.

Posted by at November 6, 2015 4:19 PM