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View Diary: In a letter to President Obama, environmental groups warn against approving the Keystone XL pipeline (53 comments)

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  •  Some experts on the subject: (4+ / 0-)

    Energy Information Administration:

    Most crude oil is moved in the United States by pipeline. However, because of limited pipeline infrastructure in North Dakota's Bakken region, oil producing companies there rely on rail to move their barrels. Shipping oil by rail costs an average $10 per barrel to $15 per barrel nationwide, up to three times more expensive than the $5 per barrel it costs to move oil by pipeline, according to estimates from Wolfe Trahan, a New York City-based research firm that focuses on freight transportation costs.
    Greg L. Armstrong is chairman and CEO of Plains All American
    Pipeline LP, one of the nation’s largest crude oil and energy
    transportation companies. The Houston-based firm handles more than 3.5 million barrels per day of crude oil and natural gas liquids (NGLs), much of it through pipeline, rail tanker car, trucking and terminal holdings. In an interview, he states:
    If, let’s say, you’re going 500 miles, it may cost anywhere from $400 million to $700 million or $800 million [to build a pipeline] depending on what territory you’re going through, and it may take two to three years from start to finish. If you’re looking at rail and you have access to existing track, in some cases, you can build a rail loading facility for probably $30 million to $50 million. The difference is that once you complete construction, the transportation cost on a pipeline may be in the $1 to $3 range per barrel of incremental tariff. Rail is much cheaper to build, but transportation costs may be in the neighborhood of $12 to $15 a barrel.

    Don't tell me what you believe, show me what you do and I will tell you what you believe.

    by Meteor Blades on Tue Sep 24, 2013 at 06:07:00 PM PDT

    [ Parent ]

    •  I realize that you continue to discount (1+ / 0-)
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      the ability to move crude oil by rail.

      But it is happening, and happening in a rapidly growing fashion.  For example, in just two years 800,000 bbls per day capacity has been installed for the Bakken, which is a Keystone XL sized pipeline.  IOW, a lack of a pipeline has nto stopped or slowed the Bakken at all.

      And the economics of shipping bitumen by rail are even more attractive than Bakken oil.  

      That's discussed in this link by Navigant Consulting Inc.  The numbers show that when bitumen is shipped in one direction and diluent condensate in the other, the cost to transport the tarsands product to the gulf coast is about 1/2 that of a pipeline.

      That is because, in part, the shipping of diluent TO the tarsands has economic value beyond simply not returning the rail cars empty - and that value is that it frees up more pipeline capacity to ship diluent OUT of the area.  

      Here's a link just from the past couple of days:

      CN Rail, at the urging of Chinese-owned Nexen Inc., is considering shipping Alberta bitumen to Prince Rupert, B.C., by rail in quantities matching the controversial Northern Gateway pipeline, documents show.
      CN Rail floats idea of shipping Alberta bitumen to Prince Rupert

      Again, the deal is that without Keystone XL tarsands development will not be slowed one iota.  Environmentalists are just being played for a bunch of chumps for all the fuss they're making over it - again, I urge looking at the real beneficiaries of a blocked pipeline (basically, the mega$$s just flow to a different set of 1%ers depending on whether the pipeline is built or not built).

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