There are a couple of reasons why I’m not just posting Dora The Explorer singing ‘We Did It’ and only one of them is that there are no good YouTubes.
Politico: Obama to delay Koch Bros-Keystone pipeline until after 2012 election
By Gaius Publius, Americablog
11/10/2011 01:55:00 PM
A cynic could read that phrase “avoid ecologically sensitive areas” as “avoid politically resistant areas” – but that’s not us. We live in Hope (and politely ask for Change).
Two notes: (1) Obama thinks this delay is an argument for voting for him in 2012. (2) That assumes he won’t hand you your hat the minute he never has to face another voter – for the whole of the rest of his life.
So a question for you: Is Obama’s decision to delay a Tar-Sands decision a reason to support him in 2012, or just the opposite?
Obama Punts Keystone Pipeline Decision Until After 2012 Election
By: Jon Walker, Firedog Lake
Thursday November 10, 2011 12:47 pm
The fact that the Obama administration is at least delaying the decision is a partial victory for environmentalists and grassroots activism. The delay proves massive protests and civil disobedience can have an impact on those in power. Getting a President to even delay plans to approve a huge project proposed by big oil is a monumental feat.
Given the concerns about potential health and safety risks to the Agallala aquifer over which the current route would pass, there are compelling, legitimate reasons to consider alternative routes. Unfortunately, this move may only punt a decision to approve the pipeline until after the election. It strongly feels like an act of pure political cynicism from President Obama, instead of a sincere response to the concerns of regular Americans.
Once Obama gets young environmentalists to vote for him in 2012, and he no longer needs to worry about facing the voters again, I suspect he plans to quickly approve the pipeline with a slightly different route, ignoring all other environmental concerns.
U.S. Delays Decision on Pipeline Until After Election
By JOHN M. BRODER and DAN FROSCH, The New York Times
Published: November 10, 2011
While environmental groups welcomed their temporary victory on the pipeline project, some expressed skepticism about the president’s motives. Glenn Hurowitz, an environmental activist and senior fellow at the Center for International Policy, said the delay could leave the final decision in the hands of Mr. Obama’s Republican successor.
“This decision just puts off a green light for the tar sands by a year,” Mr. Hurowitz said in an e-mailed statement. “That’s why I’m a little dismayed at suggestions that this kick-the-can decision means environmentalists will enthusiastically back President Obama in 2012. Is the price of an environmentalist’s vote a year’s delay on environmental catastrophe? Excuse me, no.”
I personally put more faith in the fundamental economic unfeasibility of the project.
Keystone XL: Pipe Dreams
By Paul Tullis, BusinessWeek
November 10, 2011, 5:15 PM EST
TransCanada has already blown through more than a billion dollars on the XL without laying an inch of pipe inside the U.S., buying up rights-of-way and stockpiling steel along the U.S. portion of the route in anticipation of receiving a permit.
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Even if TransCanada gets its go-ahead, however, building the pipeline is a significant risk, not only for TransCanada, but also for Suncor Energy (SU), Total (TOT), Shell, and the rest of the companies involved in the mining and drilling and upgrading of Alberta’s oil. The price to produce a barrel of oil from the sands could soar if producers are forced to assume some currently external costs, such as the huge carbon emissions produced by extracting bitumen, the thick, sour form of crude found in Alberta tar sands. It’s a cost already being addressed in multiple markets, such as California and Europe. There is mounting evidence of negative health effects on local populations exposed to mercury, arsenic, and other toxins used in oil-sands extraction-a huge potential liability. Producers will also need to address new cleanup measures. One plausible scenario: The pipeline gets built, but oil sands production remains prohibitively expensive.
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(O)il sands production is expensive, which is why few outside Canada had heard of it until oil went (and stayed) above $60 or so a barrel in the middle of the last decade, and profitable production began to look possible. There isn’t nearly enough demand within Canada, however, to use up the 3.2 million barrels a day the industry hopes to be producing in Alberta by 2019. Hence the need for a pipeline. “The oil sands market will not grow if it can’t access new markets,” says Jackie Forrest of Colorado-based energy research firm IHS-CERA (IHS).
Alberta’s oil is relatively expensive to produce because tar sands are hard to get out of the ground, and once unearthed, the bitumen is hard to separate from the rest of the muck. Two metric tons of tar sands yield just one barrel of oil that’s of a grade most refineries can handle. Unlike other forms of oil, bitumen also requires “upgrading” before it can be transported. “It’s too thick to meet pipeline specs,” says Forrest. This pre-refining process costs money and energy. It dilutes the bitumen with natural gas condensate, which usually contains the carcinogen benzene. Despite the upgrading, bitumen remains a challenge to refine; it’s better suited for road asphalt than transport fuel.
It’s no secret that bitumen requires a robust price-per-barrel to be profitable, but what’s more recently become apparent is that oil-not just tar sands oil-also has a price ceiling. “Oil reaches a point where the global economy can’t sustain its price,” says Cogan. In other words, people will pay only so much for a gallon of gas: The number of miles driven in the U.S. fell for the first time in 2008, when oil peaked at $147 a barrel. According to Daniel Yergin, the Pulitzer prize-winning author of The Prize and The Quest, and chairman of IHS-CERA, that ceiling is somewhere between $120 and $150. At that point consumers behave more efficiently, regulators and legislators change policy, innovators innovate, and alternatives to petroleum, such as biofuels and electric cars, become competitive on price-all of which destroy demand for oil, including bitumen. To some extent, investors in oil sands development seem to have noticed this ceiling. After three straight years during which inflows averaged $16.6 billion, investment fell to $13.5 billion in 2009, a drop of nearly 35 percent from 2008, when oil prices peaked near the top of Yergin’s ceiling.
Much of tar sands oil is extracted by mining: basically, digging it up with enormous machinery. The problem is that a great deal of what can be extracted by mining already has been: Only 20 percent of Alberta’s oil sands is close enough to the surface to be mined. According to a 2009 report by the Canadian Association of Petroleum Producers, mining production will be flattening relative to other more expensive methods beginning as soon as next year.
These other methods are known collectively as in situ extraction, and largely involve heating deposits deep underground and sucking them up. (In situ is Latin for “in place.”) According to analysts at Deutsche Bank (DB) and Goldman Sachs (GS), in situ extraction raises the price of tar sands production by anywhere from $5 a barrel to as much as $35 a barrel, depending on the method used. In situ extraction has a much greater footprint on the boreal forest than mining. Already a Florida-size portion of the breeding habitat of 30 percent of the songbirds in the U.S. has been lost to oil sands development.
In situ extraction requires natural gas to heat water into steam; every gallon of oil produced needs up to four gallons of water, most of it coming from a river that has usage restrictions for much of the year. The steam is then injected underground, warming the oil sand until it liquefies sufficiently to flow into the well. Some of the water is used again, drawn from a toxic mixture that must be isolated.
All of this puts tremendous pressure on the economic viability of oil sands, especially if producers must bear all costs related to water scarcity, potential health problems, cleanup, and carbon emissions-almost none of which have been borne by producers up to this point. Treating spent water could add another 5 percent to extractors’ costs, according to a 2010 report co-authored by Cogan arguing that oil sands production might not be economic. When producers finish with the water, it ends up in “tailings ponds” along with the sand that’s been separated from the oil-reservoirs of petroleum-based sludge. “After 40 years of production, there’s 170 square kilometers of tailings ponds in northern Alberta-an area the size of Washington, D.C.,” says Nathan Lemphers, senior policy analyst at the Calgary-based Pembina Institute, a Canadian ecological think tank. Producers are supposed to clean them up, but according to a 2009 Pembina report, not a single one has so far been certified as “reclaimed” to government standards. Lemphers says that Suncor has made significant progress at one site known as Pond 1, but “it’s not an end point.”
“Tailings management has not been successful for economic, rather than technical reasons,” says Cogan. In other words, it can be done but no one’s been willing to put up the money. “In an industry that’s on the margins of profitability,” Lemphers adds, “it’s pretty risky to go out on a limb and implement new technology or a new operating strategy if not required to do so by regulation.” Pressure is growing on the industry. A tailings-management rule known as Directive 74 requires costly management of tailings ponds (though enforcement has been lax and only Suncor is currently in compliance, according to the Simon Dyer, policy directory at Pembina), and a new regional planning initiative may ask producers to undertake more-and more costly-tailings management. Cogan’s group at MSCI estimates that cleanup of toxic waste will soon add $1 to $4 per barrel to production costs. He has also looked at a number of the big oil sands players and concluded that heavier cleanup costs could substantially reduce profits.
As Phoenix Woman puts it-
Late Night FDL: Keystone XL – Because Everything Is Connected
By: Phoenix Woman, Firedog Lake
Thursday November 10, 2011 8:00 pm
TransCanada wants the Keystone XL pipeline so it can a) more readily reach ports capable of hosting supertankers and b) drive up (that’s right, drive up) the price of fuel in the Midwest. Here’s how it works:
The real reasons a pipeline is “needed” are not because TransCanada wants to put that oil in our cars or give us jobs, but because they want to get to a port to ship it overseas, and the British Columbia ports are too shoaled up to accommodate oil supertankers; the biggest boats they can handle are less than a thousand feet in length, and supertankers are typically well over 1,100 feet. (By the way, the unsuitability of the BC ports renders the “we’ll just sell it to China if you don’t buy it” argument ridiculous; without the BC ports, there’s no cost-effective way to get it to China, or any other country not named the U.S. of A.) As for the effect on US gas prices, check this out (courtesy of Bernie Sanders and The Guardian, which published what no major US paper likely ever would).
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The pipeline is the only way the frozen tar sands muck – which must be specially and expensively treated for it to even be able to flow in a pipe in the first place – can be made profitable for TransCanada.
Emphasis mine. Well, except the ‘up’ which is in the original.
If you don’t like Phoenix Woman’s references you can check out this yellow bordered News Corp publication called The National Geographic for Harper and TransCanada’s plan B.
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