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View Diary: An Albertan's view of Keystone and the Tar Sands (62 comments)

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  •   Presidential Decision That Could Change the World (28+ / 0-)

    Many thanks for the excellent reference to the Naked Capitalism article. (The diary link doesn't seem to work, found it here). The article you found clearly demonstrates that stopping the XL pipeline will also drive a stake through the heart of tar sands expansion.

    In the near future, President Obama is expected to give its construction a definitive thumbs up or thumbs down, and the decision he makes could prove far more important than anyone imagines.  It could determine the fate of the Canadian tar-sands industry and, with it, the future well-being of the planet.  If that sounds overly dramatic, let me explain...

    In other words, the only pipeline now under development that would significantly expand Albertan tar-sands exports is Keystone XL.  It is vitally important to the tar-sands producers because it offers the sole short-term — or possibly even long-term — option for the export and sale of the crude output now coming on line at dozens of projects being developed across northern Alberta.  Without it, these projects will languish and Albertan production will have to be sold at a deep discount — at, that is, a per-barrel price that could fall below production costs, making further investment in tar sands unattractive. In January, Canadian tar-sands oil was already selling for $30-$40 less than West Texas Intermediate (WTI), the standard U.S. blend...

    The stakes in this battle could not be higher.  If Keystone XL fails to win the president’s approval, the industry will certainly grow at a far slower pace than forecast and possibly witness the failure of costly ventures, resulting in an industry-wide contraction.  If approved, however, production will soar and global warming will occur at an even faster rate than previously projected. In this way, a presidential decision will have an unexpectedly decisive and lasting impact on all our lives.

    •  The pipeline is a huge distraction (12+ / 0-)

      The tarsands oil is getting out one way or another.

      With the current "way" by rail:

      The Calgary Herald reports that this is looking like an increasingly viable option for oil companies with a glut of supply on their hands, and who hope to sidestep the pipeline process:

      Southern Pacific Resources ... will open a dedicated rail terminal in a few weeks just south of Fort McMurray and ship its product in leased tanker cars via CN Rail all the way to Natchez, Miss. From there, it's just a short barge ride down the Mississippi River to one of the eight refineries in Louisiana, where the crude will fetch $20 to $30 a barrel more than it could at the congested terminal hub in Cushing, Okla.

      Unlike pipelines, that means no public hearings and no environmental protests.

      link Tar Sands Oil is Coming: If Not By Keystone, Then By Train

      A broader perspective is given here: Oil On the Tracks: How Rail Is Quietly Picking Up the Pipelines' Slack

      And we’ve talked quite a bit about coal trains. All for very good reason. But we haven’t ever delved into the growing trend of shipping oil by train. Trains are a crucial -- and growing -- part of oil industry infrastructure, so it’s worthwhile to take a step back and get some perspective on this remarkable system. Understanding oil trains will help you understand, for instance, why oil markets are paying little attention to the pipeline debates.

      Let’s start with the raw numbers.

      Every week, over 17,000 carloads of oil are shipped in the U.S. and Canada. With roughly 600 to 700 barrels of oil in each carload, that’s between 1.4 and 1.6 million barrels of oil on the U.S. and Canadian rails every day. And these numbers are growing fast. This chart (at the link above) says it all.

      But yet people remained fixated on a meaningless pipeline while the real threat growing unseen right before our eyes is more or less ignored - for example the following diary got all of 8 comments: Bakken Oil moving through Northeast by rail and water
      •  You do what you can do every step of the way (17+ / 0-)

        I don't understand why the U.S. is willing to accept the risks of the pipeline when it is Canadian tarsand bitumen heading to Texas to be exported to some other country. What's in it for the U.S.?

        If Keystone XL does not go through, then they'll try for a pipeline inside Canada.

        If that doesn't go through, they'll go for rail.

        But I think we need opposition to every pipeline now, even though there seems to be this rail fallback.

        Evidently, rail doesn't generate the profits they expect to get from the pipeline--or they wouldn't be keen to spend the money on the pipeline.

        •  They're already "going for rail" (7+ / 0-)

          in fact, Big Oil seems resigned to this option:

          Understanding oil trains will help you understand, for instance, why oil markets are paying little attention to the pipeline debates.
          Of course, they'd prefer pipelines since they're more efficient (e.g., less energy is expended moving the oil) and safer (there less chance of spills, especially with brand new pipelines, as compared to the inevitable derailments as trains move over some fairly old tracks . . .. ).  

          Overall, the costs of pipeline are about 1/3rd rail (e.g., $6 bbl compared to $18/bbl - but either way as long as crude oil stays above $60/bbl the enterprise will be profitable (considering that capital and extraction costs are about $35 to $40/bbl) and will continue.  I guess we can cross our fingers and hope that the price plummets, but that seems hopelessly naive to me.

          Basically, blocking the pipelines has the unintended (at least it is unintended, although I am growing increasingly skeptical about that) effect of being considerably worse for the environment than allowing them to be built.  

          Of course, rendering pipeline construction moot by attacking the demand side rather than supply would be a wise thing to do.  But NO ONE seems to be interested in that in a serious way.

          •  Less chance of spills? (6+ / 0-)

            I read a blurb somewhere that some protesters got into an actual section of new pipe and the welds had holes all through them, they were then arrested, their cameras taken and subsequently these crappy pipes were buried in the ground. Rail would at least keep leaks visible to public scrutiny.

            •  Yes, everybody seems to be in agreement (2+ / 0-)
              Recommended by:
              erratic, SilentNoMore

              about that - from the rightwing MI to bona fide environmental groups . .. .

              Sixteen environmental groups signed a letter sent to Canadian National CEO Claude Mongeau this week to express opposition to any plans to ship product from the Alberta oilsands west by rail.

              "Unfortunately, ... there are far greater fatality, injury and environmental risks when transporting crude oil by rail than by pipeline," the letter said.

              It cites a study last year by the Manhattan Institute, a right-leaning American think-tank that has endorsed construction of the Keystone XL pipeline from Canada to the Gulf Coast after comparing the safety and accident statistics of rail, road and pipelines.

              "The industry itself acknowledges that trains have nearly three times the number of spills as pipelines (which provides little comfort given Enbridge's oil spill record)," the letter said.

              The groups, including Greenpeace Canada, West Coast Environmental Law and Sierra Club of B.C., cite two 2005 train derailments.

              Read more:

      •  Tar Sands Oil by Rail: "a whole 'nother fight " (5+ / 0-)

        Thanks for the links you provided, and for highlighting the drastic increase in rail transport of oil from the tar sands, Bakken and other North American sources.
        The first link you provided ended with this observation:

        Seems that activists, environmentalists, and anyone else with the good sense to want to keep the tar sands oil in the ground have got a whole 'nother fight on their hands.
        You're right to focus attention on rail transport, although I disagree with your view that pipelines are "meaningless." The pipeline to Canada's West Coast has been stopped by the collaborative opposition of First Nations with BC governments and organizations. The Fraser Declaration has been signed by over 130 First Nations, and is also supported by the City of Vancouver and other organizations opposed to both pipelines and tanker traffic in the fragile Pacific ecosystem. A pipeline in Canada going east would face similar First Nations opposition. And the ongoing protests in the US against XL, including this weekend's events, continue to delay and, we can hope, stop that project. As you note, the economics of rail transport make it less attractive than pipelines and will impact on future investment.

        But you've raised an important point. Rail transport of oil is growing rapidly, and presents a huge environmental threat, both in terms of potential spills and also by expanding the markets for tar sands oil, thereby accelerating global warming. In addition to continued opposition to pipelines, your comments point to the need for grassroots awareness of local risks created by rail and barge transport, such as the excellent diary you referenced on Bakken oil moving through NY.

        And finally, let's support Alberta First Nations who are opposing tar sands development at the source. They have already experienced the increased cancer rates from tar sands pollution for decades. Last month the NYT reported on a peer-reviewed study, including scientists from Environment Canada: "The development of Alberta’s oil sands has increased levels of cancer-causing compounds in surrounding lakes well beyond natural levels." As erratic's diary describes so well, First Nations are on the front lines of the local impacts.

        •  I hear, too, that there are For Sale (4+ / 0-)

          signs sprouting all over the oil patch!

          I'd say some congratulations are in order to First Nation and other activists. No, the fight is not over, but the efforts have been felt. Action HAS made a difference.

          If the oil companies have to rely on rail, that will mean downgrading production at the source, as they cannot ship as much oil that way. In turn, that will mean large volumes of natural gas and wind power (installed to power the tarsands) will become available for consumer use.

          All this regardless of whether the oncoming fight against rail shipments is successful or not.

      •  Your comments hit the nail on the head. (1+ / 0-)
        Recommended by:

        Alberta is landlocked.  These companies are desperate to reduce the cost of shipping their raw product to refineries or export terminals in order to reduce the price differential with WTI.  They don't care whether their oil going to the US, China, or Uzbekistan.

        Limiting the ability of tar sands producers to ship their product to foreign markets is THE most effective way of slowing the growth of the industry as it currently exists, whether we are talking about Keystone XL, Northern Gateway, or a project that runs up through Valdez in Alaska.

        Legalized corruption is destroying our democracy.

        by geodemographics on Thu Feb 14, 2013 at 11:07:32 PM PST

        [ Parent ]

    •  thanks! (1+ / 0-)
      Recommended by:

      I corrected the link in the diary.

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