Skip to main content

Cross-Posted from DeSmogBlog

Only Barack Obama knows the fate of the northern half of TransCanada’s Keystone XL tar sands pipeline.  But in the meantime, TransCanada is preparing the southern half of the line to open for commercial operations on January 22.

And there's a fork in that half of the pipeline that's largely flown under the radar: TransCanada’s Houston Lateral Pipeline, which serves as a literal fork in the road of the southern half of Keystone XL’s route to Gulf Coast refineries.

Rebranded the “Gulf Coast Pipeline” by TransCanada, the 485-mile southern half of Keystone XL brings a blend of Alberta’s tar sands crude, along with oil obtained via hydraulic fracturing (“fracking”) from North Dakota’s Bakken Shale basin, to refineries in Port Arthur, Texas. This area has been coined a “sacrifice zone” by investigative journalist Ted Genoways, describing the impacts on local communities as the tar sands crude is refined mainly for export markets.

But not all tar sands and fracked oil roads lead to Port Arthur. That’s where the Houston Lateral comes into play. A pipeline oriented westward from Liberty County, TX rather than eastward to Port Arthur, Houston Lateral ushers crude oil to Houston’s refinery row.

“The 48-mile (77-kilometre) Houston Lateral Project is an additional project under development to transport oil to refineries in the Houston, TX marketplace,” TransCanada’s website explains. “Upon completion, the Gulf Coast Project and the Houston Lateral Project will become an integrated component of the Keystone Pipeline System.”

Boon for Houston's Refinery Row

Houston’s LyondellBasell refinery is retooling itself for the looming feast of tar sands crude and fracked oil bounty that awaits from the Houston Lateral’s completion.

“The company is spending $50 million to nearly triple its capacity to run heavy Canadian crude at the Houston refinery, to 175,000 bpd from 60,000 bpd,” explained a March article in Reuters.

LyondellBasell admits TransCanada’s Houston Lateral project is a lifeline ensuring its Houston refinery remains a profitable asset.

“Over time, heavy Canadian oil is going to be extremely important to this refinery,” the company’s spokesman David Harpole said in a February interview with Bloomberg. “It’s not all getting down there today but as time goes on, that will become more and more powerful to an asset like we have.”

But LyondellBasell’s not the only company with skin in the game. Valero — whose refining capacity is currently overflowing with fracked Eagle Ford shale oil — is also considering expanding its capacity to refine more tar sands crude.

Not “What If,” But “Right Now”

A financially lucrative asset to refining companies like LyondellBasell and Valero, Houston’s refineries are an issue of life or death for those living within the vicinity.

“In a December 2010 report, the Sierra Club linked tar sands refinery emissions to prenatal brain damage, asthma and emphysema,” a March Huffington Post article explained. “A recent Houston-area study found a 56 percent increased risk of acute lymphocytic leukemia among children living within two miles of the Houston Ship Channel, compared with children living more than 10 miles from the channel.”

Like Port Arthur, Houston — the headquarters for some of the biggest oil and gas companies in the world — is a major “sacrifice zone” for front-line communities, with many people suffering health impacts from the city’s four petrochemical refineries.

“Much of the debate around the Keystone XL pipeline has focused on the dangers of extracting and transporting the tar sands,” DeSmogBlog contributor Caroline Selle wrote in a May 2013 article. “Left out, however, are those in the United States who are guaranteed to feel the impacts of increased tar sands usage. Spill or no spill, anyone living near a tar sands refinery will bear the burden of the refining process.”

With Keystone XL’s southern half currently being injected with oil and with TransCanada counting down the weeks until it opens for commercial operations, those living in front-line refinery neighborhoods face a daunting “survival of the fittest” task ahead.

“With toxic chemical exposure nearly certain, it is unclear what the next step will be for residents [living in refinery neighborhoods],” Selle continued. “[T]his is a life or death struggle more immediate than the ‘what-if’ of a pipeline spill. And it’s not a ‘what-if, [but rather] the fight is ‘right now.’”

Originally posted to Steve Horn on Wed Dec 18, 2013 at 12:56 PM PST.

Also republished by DK GreenRoots.

EMAIL TO A FRIEND X
Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags

?

More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

  •  It's hard to understand why Canada (1+ / 0-)
    Recommended by:
    kurt

    wants to ship this crap all the way to Texas in the first place?
    Why wouldn't it build it's own refineries, and then benefit from the profits of selling the refined product?
    Don't get me wrong, I'd rather see the stuff stay in the ground. And with the lower price of Canadian crude, only the largest products are profitable anyway. Most tar sands projects have a break even point of around $50 per barrel or more. With Canadian crude selling for around $80, that isn't the huge profit that traditional oil nets.

    And why are the U.S. industries interested in this stuff? From the Balken oil fields, and all the other new sources of oil, coupled with the glut of natural gas, we will be an exporter of oil rather than an importer by 2015. Bitumen costs way more to refine. Why are they so bent of processing this stuff at a lower profit margin?

    Canada keeps threatening that if they can't sell their garbage oil to us, the will sell it to China instead. Good.....let China have it. The tar sands are dirty, but at least they aren't as dirty as the coal that China is currently burning. In China you can't even see the sky in most of the country because of the huge amounts of smog.

    It's so far past time for the world to get off fossil fuels. It would at least be a good start for our country to stop enabling other countries to rape and pillage the land.

    •  Refineries have to be constructed and operated (2+ / 0-)
      Recommended by:
      6412093, Roger Fox

      in close geographical proximity to the markets served by those refineries.....so it isn't technically feasible to reorganize the petroleum industry to put all of the refineries in Canada.....'blame Canada' might work on SouthPark, but not in reality.

      •  For syncrude? (0+ / 0-)

        We know that they make a nice light and sweet syncrude with minimal discount, a dollar or 2 off from WTI.

        .................expect us......................... FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

        by Roger Fox on Wed Dec 18, 2013 at 02:47:30 PM PST

        [ Parent ]

      •  Question (1+ / 0-)
        Recommended by:
        Shawke

        The dairy says Bakken and Alberta tar sands are in the same pipeline, I seriously doubt that. I dont understand mixing (API 36-42)$100 oil with (API 10) $50 oil.

        And isn't all, or most of Bakken shipped by rail> 730kbpd....?

        .................expect us......................... FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

        by Roger Fox on Wed Dec 18, 2013 at 03:03:48 PM PST

        [ Parent ]

        •  I could be incorrect on this part, but I believe (1+ / 0-)
          Recommended by:
          6412093

          most of the Bakken oil is currently shipped by rail, as is the tar sands oil. That will change once the pipeline to the Bakken is complete.

          As for sending the same oil through the same pipeline, I'm not sure how that works. I can't say I'm a pipeline expert. But I'm sure many others on here can answer that question.

          •  The Bakken crude (1+ / 0-)
            Recommended by:
            Shawke

            is shipped by rail, but some may only go as far as Cushing.  From there, it could go in a pipeline.

            “The answer must be, I think, that beauty and grace are performed whether or not we will or sense them. The least we can do is try to be there.” ― Annie Dillard, Pilgrim at Tinker Creek

            by 6412093 on Wed Dec 18, 2013 at 03:37:05 PM PST

            [ Parent ]

            •  Pipeline companies can stage their operations (2+ / 0-)
              Recommended by:
              6412093, kurt

              with 100% of different products at different times within the storage and feedstock limitations of their customers on the receiving end.

              The northern portion of KXL would allow Baaken producers to reach Cushing.

              •  What I've read (0+ / 0-)

                Is that currently, some of the railroaded Bakken crude goes to Mn and gets put into a pipeline there, and is sent to Cushing.

                “The answer must be, I think, that beauty and grace are performed whether or not we will or sense them. The least we can do is try to be there.” ― Annie Dillard, Pilgrim at Tinker Creek

                by 6412093 on Thu Dec 19, 2013 at 11:52:02 AM PST

                [ Parent ]

          •  You'd lose the $100 oil (0+ / 0-)

            if mixed with $50 tar sands.

            .................expect us......................... FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

            by Roger Fox on Wed Dec 18, 2013 at 03:58:53 PM PST

            [ Parent ]

      •  The tribes and others (0+ / 0-)

        are building a couple of small refineries in the Dakotas to process Bakken crude.

        “The answer must be, I think, that beauty and grace are performed whether or not we will or sense them. The least we can do is try to be there.” ― Annie Dillard, Pilgrim at Tinker Creek

        by 6412093 on Wed Dec 18, 2013 at 03:35:26 PM PST

        [ Parent ]

    •  Break even is much higher (0+ / 0-)

      More like $80, $100 if upgraded to syncrude.

      http://www.forbes.com/...

      The wiki on the tar sands has not updated their cost, and that info is from 2009, see the talk page.

      .................expect us......................... FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

      by Roger Fox on Wed Dec 18, 2013 at 02:44:10 PM PST

      [ Parent ]

      •  It does matter what it is upgraded to... (0+ / 0-)

        But the break-even point is heavily related to the size of the project and specifics of that project. Some projects by companies like Syncrude are as low as $30 a barrel, other smaller projects with smaller companies are as high as $80. There are a lot of smaller projects on hold until the price of Canadian heavy oil comes closer to parity.

      •  That's because most Western Canada refineries (0+ / 0-)

        can only handle syncrude so will pay the global market price.

        But they can only process so much so the balance of the syncrude is mixed with bitumen (synbit) and combined with diluted bitumen (dilbit) to make Western Canada Select for shipment.

    •  A year ago syncrude was the #1 (1+ / 0-)
      Recommended by:
      Shawke

      product of the tar sands partners.

      .................expect us......................... FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

      by Roger Fox on Wed Dec 18, 2013 at 02:45:26 PM PST

      [ Parent ]

      •  It is now Western Canadian Select (1+ / 0-)
        Recommended by:
        Roger Fox
        Western Canadian Select
        Western Canadian Select is one of North America’s largest heavy crude oil streams.[1] It is a heavy blended crude oil composed mostly of bitumens blended with sweet synthetic and condensate diluents from 19 existing Canadian heavy conventional and bitumen crude oils at the Husky in the Hardisty terminal.
        ...
        WCS crude oil with its "very low API (American Petroleum Institute) gravity and high sulphur content and levels of residual metals"[13][30] requires specialized refining that few Canadian refineries have. It can only be processed in refiners modified with new metallurgy capable of running high-acid (TAN) crudes.
        ...
        US refineries import large quantities of crude oil from Canada, Mexico, Columbia and Venezuela, and they began in the 1990s to build coker and sulfur capacity enhancements to accommodate the growth of these medium and heavy sour crude oils while meeting environment requirements and consumer demand for transportation fuels. "While US refineries have made significant investments in complex refining hardware, which supports processing heavier, sourer crude into gasoline and distillates, similar investment outside the US has been pursued less aggressively.[31][30] Medium and heavy crude oil make up 50% of US crude oil inputs and the US continues to expand its capacity to process heavy crude.[31][30]

        Large integrated oil companies that produce WCS in Canada have also started to invest in upgrading refineries in order to process WCS.[33][30]

        British Petroleum refinery in Whiting, Indiana[34] is the sixth largest in the US and can refine more than 400,000 barrels of crude oil per day.[35] As of 2012, BP is making a multi-billion investment to modernise the refinery in order to allow it to process heavier crude oil.[36][37] The Toledo refinery in northwestern Ohio, in which BP has invested around $500 million on improvements since 2010, is a joint venture with Husky Energy, which operates the refinery, and processes approximately 160,000 barrels of crude oil per day.[38][39] Since the early 2000s, the company has been focusing its refining business on processing crude from oil sands and shales.[34][40]

        •  wiki? JC on a phooking stick (0+ / 0-)

          OMG, there are no production numbers in the article you link to newer than 2010. WTH?

          And you used a oil wiki, which are notoriously trolled. In fact the wiki article you linked to is rated a C

          An article that is developing, but which is quite incomplete and, most notably, lacks adequate reliable sources.
          Just for your edification upgrader production in Canada was 1.13 million barrels a day in 2012.
          http://www.energy.alberta.ca/...

          2012 bitumen production at 556kbpd
          http://www.albertacanada.com/...

          .................expect us......................... FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

          by Roger Fox on Wed Dec 18, 2013 at 05:00:03 PM PST

          [ Parent ]

    •  You are mis-characterizing the tars sands as (2+ / 0-)
      Recommended by:
      Shawke, 6412093

      "Canadian". The Federal government of Canada does not get royalties therefore the people of Canada do not get royalties. Only the Province of Alberta gets them and they are exceeded by liquor and gambling income.

      Fisher: Booze and gambling are Alberta's real gusher
      November 12, 2013

      Alberta's gaming and booze revenue exceeded its conventional oil royalties in the 2012-13 fiscal year. Think about it: we get more money from drinking and gambling in this province than we get from those oil royalties.

      The tar sands produce jobs for Canadians but Americans will get even more jobs. Many of the companies digging the tar sands are American multinationals which also have downstream facilities on the Gulf Coast or Great Lakes region.

      Some of these refineries got US government subsidies amounting to billions of dollars for modifying their processes to use the heavy tar sands oil. Once modified, the refineries cannot go back to refining lighter American oil without another expensive retro-grade. They are fully committed to the tar sands product at this time.

      Why wouldn't it build it's own refineries, and then benefit from the profits of selling the refined product?
      The refinery needs to be near domestic and global markets due to the nature of the many products that are refined. Once the oil is refined there are dozens of fuels, plastic and chemical feed-stocks, oils, waxes and even pet-coke (which goes to China to produce that massive amount of steel pipe the US is buying). The US is a net exporter of these value-added products.
      Why are they so bent of processing this stuff at a lower profit margin?
      More value-added products can be produced from the heavy oils so the profit margin is actually much higher than the light, sweet oils.
      Canada keeps threatening that if they can't sell their garbage oil to us, the will sell it to China instead. Good.....let China have it.
      The Chinese are also going to get it.
      It's so far past time for the world to get off fossil fuels. It would at least be a good start for our country to stop enabling other countries to rape and pillage the land.
      You first need to have a good look in the mirror to see who is responsible for the "rape and pillage" of the land.

      The US is the world's largest consumer of oil, both total and per capita and has been since oil was first used for commercial purposes. It's historical consumption on a per capita basis is absolutely grotesque compared to the rest of the world. BTW, China is now going up but that is mainly because it is manufacturing for the rest of the world (a very large percentage of which goes to the US).

      I suggest doubling the price of gasoline to get the US into line with the rest of the world. Only in America is cheap gas a "human right".

      •  I agree completely with doubling the price of gas (2+ / 0-)
        Recommended by:
        6412093, Claudius Bombarnac

        As for the rape and pillage suggestion, I drive a smart car, put up solar panels, and try to buy whatever I can second hand.
        It never feels like enough, but I do my best.

        With where I live, I'm constantly made fun of for the car. I could park it in the back of most of my neighbors trucks.

        Of course I think most of them spend a good chunk of their disposal income on gasoline. So I don't mind so much.

        •  Do you think everyone in the world should (0+ / 0-)

          or could also own a smart car? Can the planet survive if everyone in the world lived like an American?

          A world full of Americans?

          We represent about 5% of the world population which is indicated by that blue piece of the pie.  That is our fair share of resources from the planet.  The amount we actually consume is shown in blue + purple.  As you can see, we consume much, much more than our fair share.

          Although 1/20th of the world’s population we consume
          1/4 of the world’s fossil fuel;
          1/3 of the world paper
          1/5 of the worlds minerals

          And America, 5% of the world’s population produces 75% of the worlds toxic waste.

          So, how many “Americas” can the planet support?

    •  Why are they interested in BAkken? (1+ / 0-)
      Recommended by:
      6412093

      cause the oil is of very good quality, API 36-42, similar in some respects to WTI.

      You'd have to ask Lake Superior, but I doubt Bakken and Alberta tar sands are in the same pipeline,IRCC almost all production from Bakken is shipped by rail, to the tune of 730kbpd. Bakken fetches $100/barrel, why mix it with oil that sells for $50/b......

      .................expect us......................... FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

      by Roger Fox on Wed Dec 18, 2013 at 03:00:52 PM PST

      [ Parent ]

      •  The $50 is the cost of oil at the source. (0+ / 0-)

        Once it reaches the coast it is worth global prices. The nearest comparable oil is Venezuelan medium/heavy which is currently around $97.40 at the Gulf Coast refineries. The Canadian oil can be extremely profitable once it gets to the refinery provided the cost of shipping is less than $47/bbl. The only thing that keeps the price low is a glut at the source.

        The price of oil depends more on it's accessibility to global markets than it does on it's characteristics. Even WTI will go up once the glut is removed at Cushing. Once a refinery is set to handle the heavy oils, it can make more money with value added products such as feed-stocks for chemicals and plastics.

        •  WTI is @ $96.90 last friday (0+ / 0-)

          $50 tar sands cost was from 2009?, lots of press on increased costs over the last 3 years. Over the last year tar sands has been discounted as low as $48.

          Or are you saying the $50 price tag is for Bakken?

          EIA and the State Dept >
          http://switchboard.nrdc.org/...

          The tar sands cost @ wiki is from 2009, and shouldn't be used.

          .................expect us......................... FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

          by Roger Fox on Wed Dec 18, 2013 at 04:16:14 PM PST

          [ Parent ]

          •  West Canada Select is now at $-29.2 discount over (0+ / 0-)

            West Texas Intermediate (WTI) which itself is at a discount of $-10 over the international Brent oil price.

            Because Bakken oil is moving mostly by rail to the Eastern markets and is avoiding the bottleneck at Cushing, it is trading at a $2.50 premium to WTI - closer to world market price.

            Watch what happens when the Keystone XL South pipeline begins discharging it's oil at the Gulf Coast in January.

            Also, rail shipments of oil are set to triple in 2014 so there will be a large impact on pricing.

  •  You said: (2+ / 0-)
    Recommended by:
    Roger Fox, 6412093
    This area has been coined a “sacrifice zone” by investigative journalist Ted Genoways, describing the impacts on local communities as the tar sands crude is refined mainly for export markets.
    You don't have any basis to say that the refinery and petrochemical plants in Port Arthur, TX operate to be "refined mainly for export markets."

    Present exports from PADD3 are less than 20% for refined petroleum products and there isn't any reason to consider that refineries and petrochemical plants in Port Arthur, TX are any different.

    •  Nothing about construction and operation of (1+ / 0-)
      Recommended by:
      6412093

      the southern portion of the KXL pipeline and the Houston Lateral has any causal connection with  the physical ability of refineries to accept heavy sour crude (whether from tar sands or from Venezuela), the physical properties of the refinery production process equipment to produce each and every refined petroleum product, and the customers who purchase such refined products (including the split between domestic and foreign customers).

    •  PADDII gets much more ALberta tar sands than (0+ / 0-)

      PADDIII, last I saw PADDIII was getting about 150kbpd.

      In fact the pipelines to & from the LOOP are mostly set up to unload supertankers... not load, there are 2 projects I have heard about, one a reversal, that might be used to move tar sands syncrude to supertankers.

      So that pretty much dovetails with your export numbers, the piping just isnt set up for significant export.

      .................expect us......................... FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

      by Roger Fox on Wed Dec 18, 2013 at 02:53:05 PM PST

      [ Parent ]

  •  It will be going outside the city, i live in Texas (0+ / 0-)

    Houston will becoming the dirties city in the  country ,Houston area had too degree ,eliminated smog to some degree,Houston  has become a city less dependence on oil ,it has become a world  class medical centers,but the carbon  emmision  from  tar sands ,will  make it  smogy  again

    •  There isn't any significant difference in refinery (2+ / 0-)
      Recommended by:
      6412093, Claudius Bombarnac

      air pollution emissions between using conventional heavy sour crude (from Saudi's, Mexico or Venezuela) and heavy sour crude in the form of diluted bitumen.

      Most large Gulf refineries were modified long ago to accommodate heavy sour crude.   This included upgrading and additional units for sulfur recovery and tailgas treating units.

      •  Correct PADDIII has added - going by memory- (1+ / 0-)
        Recommended by:
        6412093

        something like 1mbpd of cracker capacity, going back 8-10 years ago.

        .................expect us......................... FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

        by Roger Fox on Wed Dec 18, 2013 at 02:55:05 PM PST

        [ Parent ]

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site