Keystone XL

...is back on the front-burner it would seem.

As I've said elsewhere I don't really think the "CO2 plus Northern Albertan ducks" environmental case is compelling in light of what's likely to happen after either acceptance or rejection of the pipeline, but it seems an increasingly marginal perspective outside of the American and Canadian right and some parts of labour.

On the other hand it's questionable to what extent Canada can "punish" the US given the comparative logistics of getting oil to other consumers and the fact that the Canadian industry will be desperately trying to get its oil-glut over the border regardless of the fate of Keystone.

I'm sort of puzzled as to why Keystone is the hill to die on for US environmental groups; this oil is going to be extracted no matter what, with the attendant CO2 / environmental related effects. It's just a question of where the pipeline runs.

I think it's a combination of circumstantial stuff - the 350.org effort happened to snowball, and the visual despoilation of the extraction sites is like pollution porn - combined with a backlash against the last few years of complete surrender on CO2 and climate change.

Plus - unlike some other hypothetical action on climate change - some new CAFE-like emissions initiative, or a new Kyoto accord - the environmental groups can actually win this one, given the way it's become a largely partisan issue and given the impotence of Canadian retaliation.

Yeah, I get that. At some point a win's a win.

Yeah this is just one of those places where the economist in me sometimes overrides the human in me. I get the instinct to want a symbolic win. But the economist in me keeps pointing out that any effort expended on stopping Keystone is totally wasted in terms of reducing aggregate CO2 emissions; that oil's coming up and getting burned; it's just a question of where it gets shipped out of.

On the other hand, environmentalists have basically gotten the shit kicked out of them for ten years; this is a winnable battle so I totally get the need for the symbolic victory.

I agree that the Harper government's Fossil-award-hunting policies contributed to creating the present optics of Keystone, but I'm much less sure about "Canadians are against the oilsands." Everyone not in the Conservative Party is mortified by Harper's environmental policies, and people with even moderate concern for the environment have misgivings about the oilsands both as an extraction problem and, more nebulously, as one of a zillion sources of tailpipe CO2.

But cumulatively that doesn't even make me anti-Keystone, much less "against the oilsands," as in, shutting down unconventional oil production in Alberta and blowing up Canada's economy.

np

Despite what PM Harper says, the Canadian economy is more than oil and natural gas (I don't believe in the "trickle down" theory of what's good for Alberta is great for all of Canada). High oil prices may be great for Alberta's coffers but it sucks for the rest of Canada who need gasoline to export raw materials like timber and minerals while importing goods and foods.

I notice the oil company tv commercials are very frequently of late, touting how great the oil/tar sands is for the Canadian economy.

I haven't, here; they may run that stuff differently depending on how the oilsands poll regionally. I by no means think of the oilsands (or Albertan energy in general) as some great boon to Canada. It was discreditable the way Mulcair was gone after for his very reasonable Dutch Disease concerns.

Responding more seriously to Charles - if I thought the (very hypothetical) option of shutting down unconventional oil in Alberta would change the future profile of American - not to speak of global - fossil fuel use, I'd be in favour of scaling it back or shutting it down. But I expect - unhappily - that the fossil fuel "transition" of the next century is going to be a foot-dragging nightmare, with coal liquefaction probably being a whole extra layer of domestic fossil fuel awfulness to follow after oil sands and shale oil and fracking and whatever else.

And Keystone - which at this point I suspect may fail - is an order of magnitude more trivial. I won't be gutted by any means if it does fail, and maybe it'll do some good as a kludgey carbon tax, but I have a hierarchy of more preferable environmental fixes in the US and Canada that'd do more good without causing economic dislocation of any kind to Canada.

I would have the thought the massive glut of gas in the American market would do more to wreck the Keystone pipeline than anything else.

Who needs expensive to produce tarsands oil when you have cheap gas from shale? You can also put the shale gas in the existing pipeline network.

There is so much of it now, that some companies are beginning to seriously propose exporting the gas in LNG form and it isn't looney tunes stupid. It'll never be allowed of course, due to the "not in my backyard" aspect of any export hub / proposal getting approved, but also because massively cheap gas is good for local industry so politicians have vested interest in not exporting as it helps them look better.

It's actually also better than oil or coal for CO2 emissions. Not as good as nuclear or renewables of course, but much better and far easier to transition to as a possible "half way" step.

I don't see either opinion polling or the stances of the federal parties reflecting that. There are certainly partisan enthusiasm gaps, but that's not the same thing.

I could see a backlash to Natural Resources getting into the boosterism business on the public dime. (Although god knows the Economic Action Plan propaganda's gotten to the point of being an unquestioned, permanent partisan ad campaign).

"Dow Corning loves you" type ads from various loathable megalocorps have been going on for years without my ever seeing a backlash beyond high-information viewers rolling an ironical eye. I've never read anything either way about whether they do any good from the company's perspective.

I think the big deal would be if the opposition parties - presumably in a co-ordinated move - elected to take a tough stand. Either environmentally, or just a who's boss, the industry or the regulators basis. But it's always possible public opinion drift could precede that I guess.

Keystone XL won't impact oilsands growth, U.S. State Dept. says

The second part of the sentence is uncontroversial - one of the things which I think undermines the "block this project to reduce tailpipe emissions by not having a new inflow of fossil fuels" argument, leaving aside the arguments about the dirtiness or ugliness of the extraction process. But the first part seems to run contrary to the conventional wisdom in the Canadian media that the oilsands have already developed themselves into a bitumen glut, now that oil prices are down again.

Unless perhaps further development is unlikely at current prices whether there's a pipeline or not, which is possible. Still seems like it'd affect development in the medium term, when oil prices rise again.

My current company* has benefited from the lack of Keystone (and thus the lack of onramps). We produce more GGs than the Pipeline and have the ability to do stuff like this:


We had 5 in 5 weeks, in fact. Not that you hear much about them. Bad press is frowned upon. :)

*Not for long! Went to this because it's totally easy compared to my last job, but it's also 100% more miserable. So now it's either Denver or Wyoming for me.

Oh! And I forgot, we actually brought hundreds of miles of the pipeline in about a year ago, and now it's just sitting. A cool sight! Here is a portion of it:




The amount of product that we ship by rail is phenomenal. It's much more dangerous and wasteful. I am not sure why enviro groups want to kill the Keystone just to have it shipped by rail.

The Minister of Natural Resources says that Alberta's oil is "green."

Without really wishing to be on the other side of the "we need to stop burning fossil fuels post-haste" position, would the hypothetical killing of the Albertan oilsands in your view change the extent to which North America (or the world) consumes fossil fuels?

It seems far more likely that the huge coal reserves in North America and China would just be the next item on the "expensive and dirty sources of oil" path of least resistance flow chart, with something like an aggressive Franco-Japanese nuclear program as very unlikely energy alternative.

I wonder about the feasibility of that. Our Bakken capacity is going into overdrive, and we're also planning on massive interchange at the borders. We can't hire people fast enough. Of course, we have some pretty powerful people on "our" side. Warren Buffet running the place means that the Keystone isn't his favorite thing, especially with the onramps.

FWIW, I think shipping it by rail is stupid and dangerous. The lack of elevated crossings presents us with increasing danger across the Bakken, especially to semis. The photo below was a crossing-at-grade accident. In this case, the driver was not paying attention and ran into the side of the intermodal stack freight train. Luckily it was just stack freight. Now that we ship a whole lot of U SIDHUT trains (product from Sidney to Hutchinson, KS), we have trains going along the Yellowstone River and other easily-contaminated habitats. Most of our derailments get hushed pretty quick with minimal reporting, but they're pretty frequent.

So apparently a pipeline has recently burst in Arkansas.

Routers article on the same issue.

And for good measure, some pictures from Reddit of the spill.

Looks like a lot of good well paying American jorbs will be created to deal with this!