The Tar Sands White Elephant

A white elephant is a possession which its owner cannot dispose of and whose cost, particularly that of maintenance, is out of proportion to its usefulness. The term derives from the story that the kings of Siam, now Thailand, were accustomed to make a present of one of these animals to courtiers who had rendered themselves obnoxious in order to ruin the recipient by the cost of its maintenance. In modern usage, it is an object, scheme, business venture, facility, etc., considered without use or value.

So it appears that Mary Landrieu will get her Senate vote on Keystone XL as a sop to her doomed candidacy.  It may even be that she can round up enough Quisling Democrats to reach the artificial 60 vote filibuster limit.

Well, it doesn’t matter.

Nor do the supposed “trump cards” of Enbridge Northern Gateway and Kinder Morgan Trans Mountain, or Energy East which are facing regulatory difficulties just as severe as Keystone XL even though they’re entirely Canadian and have the full backing of Stephen Harper, Conservative PM of Canada.  This is because the territorial governments of British Columbia (Northern Gateway and Trans Mountain) and Quebec (Energy East) are not exactly on board nor are the First Nations who have treaties the government of Canada is a little more bound to respect than our own with our native population.

Blocked on the Keystone XL, the Oil-Sands Industry Looks East

Christina Nunez, National Geographic

Published October 24, 2014

Energy East has only the Canadian regulatory system to contend with. That’s plenty, as executives at Enbridge and Kinder Morgan might attest.

Enbridge’s 525,000-barrels-a-day Northern Gateway proposal, which would run west to the Pacific, has received approval from the Canadian government, but with a huge caveat: The Toronto-based company must meet more than 200 regulatory conditions before it can begin construction. That, along with strong opposition to the project at its terminus in British Columbia, has led to speculation that the pipeline will never be built.

…

Houston-based Kinder Morgan has proposed expanding its existing Trans Mountain pipeline between Alberta and the British Columbia coast, which would boost capacity from 300,000 to 890,000 barrels a day-a project that’s also under attack. Like Northern Gateway, it has faced formidable opposition from First Nations, and in British Columbia they have the right to reject any project running through their territory.

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Community activism on Energy East is to be expected, but TransCanada has also had to contend with other business interests. Natural gas distributors, for example, have complained that the project, by converting a natural gas pipeline to oil, will force them to bear the costs of replacing it.

“This is a fool’s bargain,” said Sophie Brochu, president and CEO of Montreal-based gas distributor Gaz Métro, in a speech this week. “They want to remove a vital pipeline that is already largely amortized and replace it with a smaller pipeline at a higher cost. No thanks.”

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Assuming it can resolve the commercial sticking points, TransCanada will then need to secure federal approval for Energy East, a process that could take up to 15 months. And then it must meet any conditions set by the federal government and by provincial governments along the proposed route of the pipeline-the same step that has cast doubt on Northern Gateway’s prospects.

A temporary court injunction has already delayed initial work on a marine terminal for Energy East at Cacouna, Quebec, because of fears that construction would disrupt a key calving area for beluga whales. Environmental groups have raised a host of other concerns-including the role the pipeline would play in expanding the use of emissions-intensive oil sands.

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“It is unclear what the Quebec government will do, but it appears there’s significant public opposition,” said Danielle Droitsch, a senior attorney for the Natural Resources Defense Council, which opposes the pipeline. By setting tough conditions for Energy East, Quebec might have the power to delay it or, for example, to scuttle one of the planned marine terminals.

Once again, the familiar battle lines have been drawn. “I cannot tell you how often I read, when I started working on Keystone XL, ‘This is a done deal. It’s gonna happen,'” said Droitsch. “And of course that’s not the case.”

Now Trans-Canada (the pipeline developers) think they can dispose of this potential ugliness with a little messaging campaign-

P.R. Firm Urges TransCanada to Target Opponents of Its Energy East Pipeline

By IAN AUSTEN, The New York Times

NOV. 17, 2014

The advice from a top American public relations firm was simple: A Canadian pipeline company should take aim at its opposition.

In detailed proposals submitted in May and August, the public relations firm Edelman outlined a plan to investigate groups that had opposed Energy East, a pipeline in development by TransCanada. Edelman urged TransCanada to develop its own sympathetic supporters and spread any unflattering findings about the opposition.

“We cannot allow opponents to have a free pass,” Edelman advised TransCanada, according to five documents that were obtained by Greenpeace, the environmental group. “To make an informed decision on this project, Canadians need to have a true picture of the motivations not only of the project proponents, but of its opponents as well.”

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In its proposal, Edelman proposed “a perpetual campaign to protect and enhance the value of the Energy East Pipeline and to help inoculate TransCanada from potential attacks in any arena,” according to the documents. The language, at times, invoked a military battle, one that would “add layers of difficulty for our opponents, distracting them from their mission and causing them to redirect their resources.”

If TransCanada or Edelman did investigate, Maude Barlow, national chairwoman of the Council of Canadians, said they probably would come up with little fodder.

“I’m a grandmother,” she said. “To me it’s a sign of desperation,” she added. “It’s basically all wrong, and it takes away from the public debate we should be having.”

Like Ms. Barlow, Ben Powless, the antipipeline campaigner at Ecology Ottawa, said he was somewhat surprised that Edelman, the largest independent public relations firm based on revenues, would be concerned about his small group’s influence. Ecology Ottawa has about nine paid employees and mainly relies on volunteers who tend to be students and retirees.

“To me, it’s a smear campaign really trying to shut down the voices of local people who have legitimate concerns,” Mr. Powless said.

Mr. Millar said that TransCanada mainly hired Edelman to help in Quebec, because it has few French speaking employees from the province. The documents indicate that Edelman’s efforts for TransCanada are being led by Mike Krempasky, the co-founder of the conservative blog RedState.com who joined Edelman in 2005. In the past, Mr. Krempasky has recruited bloggers and online commenters to post favorable comments about Walmart’s business and labor practices.

You know, I’ve actually chatted (on line) with Mr. Krempasky and surprisingly enough I’m still a member in good standing at Red State (as opposed to some supposedly “progressive” Democratic blogs I could name) and I never had to toe the Party Line or kiss his ass to do it.

Revealed: Keystone company’s PR blitz to safeguard its backup plan

by Suzanne Goldenberg, The Guardian

Tuesday 18 November 2014 00.01 EST

Strategy documents drafted by the public relations giant Edelman for TransCanada Corporation – which is behind both Keystone and the proposed alternative – offer a rare inside glimpse of the extensive public relations, lobbying, and online and on-the-ground efforts undertaken for pipeline projects. The plans call, among other things, for mobilising 35,000 supporters.

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In the five strategy documents, made available to the Guardian by the campaign group Greenpeace, representatives from Edelman’s offices in Calgary propose an exhaustive strategy to push through the Energy East project including mobilisation of third-party supporters and opposition research against pipeline opponents.

In the wake of the Keystone XL opposition and a pipeline spill in 2010 in Kalamazoo, Michigan, oil industry projects now face “permanent, persuasive, nimble and well-funded opposition groups”, in Edelman’s words.

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In the wake of the Keystone XL opposition and a pipeline spill in 2010 in Kalamazoo, Michigan, oil industry projects now face “permanent, persuasive, nimble and well-funded opposition groups”, in Edelman’s words.

But the documents say the oil industry and public relations firms have developed an effective strategy to beat back those opponents through online organising.

Industry mobilised a million activists and generated more than 500,000 pro-Keystone comments during the public comment period, one of the documents says.

“It’s not just associations or advocacy groups building these programs in support of the industry. Companies like ExxonMobil, Chevron, Shell and Halliburton (and many more) have all made key investments in building permanent advocacy assets and programs to support their lobbying, outreach and policy efforts,” the documents say. “TransCanada will be in good company.”

“This approach strives to neutralize risk before it is leveled, respond directly to issues or attacks as they arise, and apply pressure – intelligently – on opponents, as appropriate,” the documents say.

The documents say Edelman and TransCanada should “work with third parties to pressure Energy East opponents”.

They advise: “Add layers of difficulty for our opponents, distracting them from their mission and causing them to redirect their resources,” and warn: “We cannot allow our opponents to have a free pass. They will use every piece of information they can find to attack TransCanada and this project.”

Recruiting allies to deliver the pro-pipeline message is critical, Edelman says in the documents. “Third-party voices must also be identified, recruited and heard to build an echo chamber of aligned voices.”

Edelman also offers “detailed background research on key opposition groups” such as Council of Canadians, Equiterre, the David Suzuki Foundation, Avaaz and Ecology Ottawa.

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The campaign group Avaaz, one of the potential targets of the opposition research, called on Edelman to sever its connections with the campaign.

“Edelman’s cynical plan to smear citizens groups shows how low fossil fuel companies will stoop to protect their profits in the face of rising seas, melting ice caps and millions calling for climate action,” Alex Wilks, a campaign director in New York, wrote in an email. “Edelman must cancel its TransCanada contract and stop promoting one of the world’s dirtiest oil pipelines.”

The Council of Canadians, another targeted group, said the ambitious scale of the PR pitch suggested TransCanada was concerned about growing opposition to the project. “What this speaks to is that they are losing,” said Andrea Harden-Donaghue, climate campaigner for the council. “What these documents reveal is that they are bringing Tea Party activists into the equation in Canada combined with a heavyhanded advertising campaign. They are clearly spending a lot of time and thought on our efforts. I’d rather see them address the concerns that we are raising.”

Now we already know that the “tens of thousands” of jobs that Keystone XL will supposedly create is actually more like “tens”, and that the heavy tar sands crude is unmarketable in the U.S. and intended only for export which means that it will do nothing at all to improve domestic energy production or reduce prices, and we also know that the firms which produced the reports showing negligible environmental impact were operating from faulty assumptions and had corrupt conflicts of interest, AND that after 2 years they still don’t have a map of the proposed route through Nebraska which will not approve the project without one.

But none of that is why Keystone XL is going to fail.

This is why-

Economics no longer make Keystone pipeline viable

Tim Mullaney, CNBC

Thursday, 13 Nov 2014 10:32 AM ET

Since June, crude oil has declined by 28 percent, pushing the price that oil from new wells in Canada may command below what the expected cost will be to produce it.

The so-called “heavy oil” extracted from sand in Alberta, which the proposed pipeline would carry to Nebraska, en route to refineries on the Gulf Coast, will cost between $85 and $110 to produce, depending on which drilling technology is used, according to a report in July by the Canadian Energy Research Institute, a nonprofit whose work is often cited by Keystone proponents. West Texas Intermediate crude oil traded today at $76.67.

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Oil sands are among the most expensive sources of oil, costing an average of $75 to $80 a barrel to produce, Norwegian energy-consulting firm Rystad Energy said in June.

“I would think that in order for new drilling projects to be capitalized and economical, the price of oil would need to be around $85 to $90,” Moody’s Analytics energy economist Chris Lafakis said.

The situation is broadly similar to that faced by an earlier proposal to build a natural-gas pipeline from Alaska to the Midwest, Lafakis said. After being approved by then-Alaska Gov. Sarah Palin in 2007, the pipeline was never built, because newly discovered supplies of gas in the Lower 48 states pushed gas prices down by about two-thirds.

“If oil were to stay as cheap as it is right now, you might very well get that Palin pipeline scenario,” Lafakis said.

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West Texas Intermediate prices will fall to $70 a barrel by the second quarter of 2015, Goldman Sachs forecast last month. The U.S. Energy Information Administration predicted Wednesday that the benchmark price of U.S. crude oil will average $77.75 a barrel next year. That’s down from a previous forecast of close to $95.

Demand has been running slightly lower than expected in 2014, which will persist into early next year, the International Energy Agency said, blaming reduced expectations for global economic growth. Supply has risen by more than 900,000 barrels a day in September alone and nearly 3 million barrels a day in the last year, about three times as much as the expected improvement in demand.

In addition to surging production in the U.S., which has boosted oil output by more than 60 percent since 2008, the IEA said OPEC crude oil output is rising as production in Libya and Iraq recovers from political disruption.

Alberta Tar Sands are an economic dead end as the Nazi’s found out with their “synthetic crude” (basically the same thing) in the desperate days at the close of World War II.  Their excuse was that they couldn’t get any other oil.  Canada has no excuse, they’re just greedy bastards with a White Elephant.