Friday, September 30, 2011

Keystone XL Pipeline Attracts Popular Support

Whatever the ultimate fate of the oil industry, we are still in the business of building the infrastructure necessary to internally supply the US market.  The Keystone XL pipeline will finally link Alberta produced oil with the huge refinery infrastructure in the Gulf.  The losers in this development are the offshore suppliers who can and will be displaced by internal oil.

As they have every reason to thwart this development it is hardly surprising to witness a well funded challenge to the building of the pipeline.

You may think that 700,000 barrels is only a small fraction of the market, but in reality pipelines once approved are immediately doubled and redoubled as the market dictates without much regulatory fuss.  Thus this pipeline can quickly ramp up to 1.5 to 3.0 million barrels per day.

In that case, delaying the pipeline a year or two is worth a great deal in terms of product sales

On top of all the oil sands production continuing to come on stream we have a rapidly climbing output from the Bakken that is sweet oil besides.  That pipeline allows North Dakota production to displace oil sands production in present pipelines.

At the end of the day, the pipeline will surely be cleared in spite of the political theatre.

Alberta-Texas Pipeline a Ray of Hope

Posted by Rich Trzupek Bio ↓ on Sep 29th, 2011

One month after passing an initial environmental review, the proposed Keystone XL pipeline project crossed another significant hurdle, as a series of State Department hearings in states affected by the project drew to a close. Like any recent project involving any sort of fossil fuel use, the Keystone XL pipeline drew the usual crowd of protesters and fear-mongers. Yet, recognizing the importance of the project in both economic terms and in terms of energy independence, Keystone XL has garnered a surprising amount of public support as well.

The pipeline, running from Alberta, Canada to the Gulf Coast, would have the capacity to bring an additional 700,000 barrels of crude oil pumped out of Canadian tar sands. The United States imports roughly 10 million barrels of crude per day, so completion of Keystone XL has the potential to displace a fair amount of the crude that we currently import from overseas. In a world where China and India are gobbling up as much crude supply as they can through long-term contracts, it obviously makes sense to ensure our own energy security through projects like this. Yet, the environmental Left has been doing everything it can to muddy the waters of a decision that should be crystal clear when it comes to this new pipeline.

The State Department hearings reflected much of the poisonous influence that the environmental Left and their partners in the mainstream media have had on many otherwise reasonable, hardworking Americans. The environmental Left’s core messages are: 1) there is no level of acceptable risk, 2) there are no environmental missteps, only environmental disasters, and 3) anyone who disagrees with message one or two is lying and, most likely, in collusion with evil corporate polluters.

Consider, for example, how the concerns of one farmer in Nebraska were reported by Canadian wire service Postmedia News. Farmers Scott and Bruce Boettcher, who drove four and a half hours to attend the hearing, are highlighted in the story:

Their lifetime of experience has made them highly skeptical of studies — by both TransCanada and the State Department — that conclude environmental damage from an oil spill would be limited and localized. The water is not static — it moves, Bruce says, and oil spilled into it will move, too.

“Them scientists are not telling the truth about that ground,” he told Postmedia News during a break in the Lincoln hearings.

In fact, the highly sophisticated models that are used to determine the extent and severity of oil spills do indeed take into account the fact that water moves. We know, from decades of experience, how any kind of groundwater contamination will act and how severe the potential damage is. And, after all those decades of experience, we’ve gotten very, very good at both limiting the size of the inevitable (if very occasional) spill and remediating any environmental effects.

Yet, environmental groups and their media allies latch onto any story – no matter how convoluted – that will play to the tired old narrative that America is dangerously polluted and each new project brings us a step closer to environmental catastrophe. In addition to supposedly poisoning ground water in Nebraska, the environmental Left asserts that crude taken from Canadian oil sands is more greenhouse gas-intensive than other forms of crude and that emissions of other pollutants will increase as well if this “dirty” crude is allowed to enter the United States.

Both claims are silly. When you add everything up, oil sands crude is middle of the pack when it comes to greenhouse gas emissions, and the fact that the crude is “dirtier” only means that refineries have to do more to remove contaminants, not that the release of more contaminants into the environment will be allowed. In any case, somebody – somewhere – is going to refine this supply of crude. Growth in Asia guarantees that there will be no shortage of demand for a long time. So the real question is: do we want to make a deal with our neighbor to help stabilize our own energy picture, or do we want them to sell it to somebody else? Either way, the wells in Alberta will keep pumping.

Secretary of State Hillary Clinton has hinted that she is inclined to rule favorably on the project. With an election year fast approaching, it would appear to be in the administration’s best interest to push Keystone XL through, if only to raise a little political capital among the millions of Americans who remain distressed by the economy, gas prices and unemployment.

The political advantages were made clear during the recent hearings. While hearings of this type usually only bring out the critics, many supporters of the Keystone XL pipeline stepped up to the microphones to urge the administration to move forward. The administration is expected to announce its decision by the end of the year. Whatever the decision, it is sure to be challenged in court by the parties who disagree with it, but that small ray of sunshine peeking through the gloom of our cloudy energy future suggests that the process – as cumbersome and time consuming as it may be – is moving forward at long last.

About Rich Trzupek

Rich Trzupek is a veteran environmental consultant and senior advisor to the Heartland Institute. He is the author of the Encounter Broadside "How the EPA's Green Tyranny is Stifling America" and the upcoming book "Regulators Gone Wild: How the EPA is Ruining American Industry" (Encounter Books).

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