The Obama administration has now effectively delayed a decision on the Keystone XL pipeline, which is designed to bring up to 700,000 barrels of Alberta oil-sands oil into the United States. As reported by John Broder of the New York Times, this continues an administration trend of postponing controversial energy decisions beyond the 2012 election. Previously, President Barack Obama delayed a review of the nation’s smog standard until 2013, pushed back offshore oil-lease sales in the Arctic until at least 2015 and blocked new regulations for coal ash from power plants.
A more decisive and courageous decision would have been fair to everyone involved in the $7 billion Keystone XL project. It also would have been fair to the Canadian government, which is considering an alternative, the Northern Gateway pipeline to the Pacific Ocean terminal at Kitimat, British Columbia, with shipments to China and other Asian customers. In addition, Minnesota already gets oil-sands oil via the Alberta Clipper pipeline from Hardesty, Alberta.
The president could have announced a decision to reject Keystone XL based on his campaign promises to reduce our dependence on fossil fuels and to focus on the threat of global warming.
He could also have announced approval of the project, noting our continued dependence on imported oil for decades. Keystone XL would assure oil from a dependable friendly source, versus imports from Venezuela and the Middle East. And if we don’t take the oil, it will simply go to customers in Asia with no net benefit to the environment. He could also point to thousands of new jobs which could be an offset for environmentally conscious supporters.
Three major regional sources
The fact is that this country runs on oil, whose compounds provide everything from transportation to the asphalt that paves our roads. Oil compounds provide building materials, fertilizers, pesticides, medicines, plastics and more. Our older domestic oil reservoirs are declining, and there are three major regional sources to fill the gap. There’s the oil in the deepwater Gulf of Mexico; the Alberta oil sands, and the oil shale in regions like the Williston Basin (Bakken field), which require hydraulic fracking.
Of the three, the biggest and safest source will be from Alberta. It can be pipelined here, or we can use the longest lines of diesel-burning tanker trucks in world history.
Opponents of the pipeline point to threats to the Ogallala aquifer. But the biggest threat there is from the millions of tons of fertilizers, pesticides, and irrigation water that are continuously dumped on the soils that drain directly above the aquifer. A study by professor Sangwon Suh of the University of Minnesota reported that in Kansas and Nebraska, 500 gallons of water are required to grow and process the corn for each gallon of ethanol produced. Much of that water is drawn from the Ogallala.
There are 450,000 miles of oil and gas pipelines in the United States. They operate with minimal safety problems. Many of those lines are directly above the Ogallala aquifer, which is unaffected.
Continuous monitoring
The new Keystone XL pipeline will continuously monitor thousands of sensors that register pressure and leak issues. Valves are spaced along the pipeline and are closed from remote centers to limit loss from leaks.
Until serious carbon-tax and fuel-conservation measures reduce fossil-fuel consumption, pipelines are the best way to transport oil and gas, our major energy fuel source.
Rolf Westgard is a professional member of the Geological Society of America and teaches energy subjects for the University of Minnesota Lifelong Learning program.
Rolf:
Well stated. Our President has chosen the alternative to the pipeline, “the longest lines of diesel-burning tanker trucks in world history.”
When presented this big opportunity to create jobs, real jobs, jobs paid for by the private sector, he decided to punt. Instead of making a decision, he again played the maybe-later card, just like the oil leases and smog standards. Could we get a little leadership here?
I agree that President Obama should have decided the issue now rather than delay it. Obviously, the President did not respond to environmental objections to the pipeline. He responded to the Republican Nebraska legislature objection. I have no reason to doubt Mr. Westgard’s statement that there are already hundreds of miles of pipeline already over the Oglala aquifer. Kansas and other areas over this aquifer are significant oil producing regions themselves.
I also agree that “serious carbon tax and fuel conservation measures” are necessary to reduce oil consumption and demand.
But this should be part of a multifaceted energy policy which this country lacks and needs. Taxing oil consumption and production is one apprach; stopping the further construction of pipelines and refineries is another. Requiring coal burning electric utility facilities to install scrubbers to limit greenhouse gas emissions is another. There’s no one silver bullet solution. Oil demand remains high because of the failure of policymakers and leaders to confront some tough issues. One of those is the very structure of American life is centered on fossil fuel consumption and waste. From the ways cars are designed and built, to the design of houses and development, everything we do encourages fossil fuel consumption and waste and does nothing to discourage it. We’ve known this for 40 years. The time is quickly running out to take any action that will reverse the trend for climate change.
Change has to start somewhere. The Keystone XL Pipeline should be the place to start as part of a major reversal of the policy drift which has characterized American energy policy-federal, state and local-for the last 40 years. It can start with the government’s acknowledgment that the Keystone XL Pipeline will cause a major increase in the mining and development of the Alberta tar sands which will significantly increase the emission of greenhouse gases. Canada has no other way to get the tar sands out of Canada. The US should bottle up this industry now and force it to shut down.
Jon: The demand for increasing amounts of Alberta’s oil sands oil is there. We already use a lot of it in MN via the Alberta Clipper Pipeline. Most of the cars on MN highways are running on the gas from that heavy oil. Our Pine Bend refinery is the largest heavy oil processing refinery in the U.S. A direct pipeline from Pine Bend to MSP supplies the jet fuel for all those planes taking off from points beyond.
There are other pipelines today which run south from the oil sands. Keystone XL is needed to handled future increases. If we punt, Canada will go west to supply Asia.
Rolf
You might be right that Alberta tar sands are being used. I don’t know that Minnesota drivers use a lot of it, as you say. But that is separate from the Alberta Clipper Pipeline which was built to support forecasted future demand, forecasts which were vigorously disputed at the Minnesota hearings and which remain inconclusive. There was no final decision on which forecasts were right but even Enbridge stated that there was no forecasted shortage of pipeline capacity before 2015 at the earliest. And indeed, the Alberta Clipper went into service in April, 2010 and is not running anywhere near capacity.
Also, Canada’s claim that it will go west is an empty claim ,or a bluff. If it could do that it, it would have. The ports in British Columbia are too small to handle it. If it were possible, I think Canada would have already tried that route rather than run it through the US.
Canada’s biggest customer is the US which is why it wants to send it to the Gulf. True, the prices are supposedly bid to world prices but that happens anyway. The US will use it at whatever the market will bear. As you point out in your Opinion Piece, the US needs some carbon tax that starts funding alternatives, even if it doesn’t dampen demand.
The fact we are mining tar sands means that it has become profitable to resort to expensive processes to extract these fossil resources. That implies that we have already passed “peak oil”. Even without climate change, the fact cheap reserves of petroleum are declining should make us and our leaders realize that we can no longer rely upon fossil fuels to run the economy. We need to start doing something else. Now.
Jon, I fully agree with your concerns about our continued reliance on oil. I just took my class for a tour of the refinery at Pine Bend. Minnesota’s two refineries get their crude from the Canada oil sands via the Alberta Clipper. A junction in northernMN at Clearbrook has the Koch Brothers pipeline bringing that oil right down to us.
The Alberta Clipper terminates at Duluth/Superior.
And the terminal at Kitimat, B.C. is perfectly capable of handling large amounts of oil for shipment to China. China has big investments in the oil sands for that reason.
And the oil sands stuff is very profitable at current oil prices.
At this time there is no substitute for oil. Ethanol is a taxpayer funded scam. Long term we could electrify much of our transport as in Europe and Japan. That would probably require more nuclear to beef up electric power production.
Tar sands represent the scraping of the bottom of the petroleum barrel. After we’re done scraping that, and have scraped a good part of the Earth’s surface bare of every living thing in the process, we might be able to get by a little longer with Fischer-Tropsch oil made from coal (and again, to hell with the environment now that we’re really desperate). After that, we’re back to solar power, in the form of using sunlight to grow grass to feed to horses and potatoes to feed to laborers.
This is going to be an interesting century.
Rolf, as the author of this Opinion Piece, you’re entitled to it and to the last word. I know I’m not going to persuade you. Your view is backed up the prevailing conventional wisdom. I’m skeptical of conventional wisdom since it seems aligned with and influenced by the oil industry and the pipelines.
Let me make two last points. 1) If the British Columbia ports are capable of handling the oil, then why hasn’t Canada built their pipelines to British Columbia? If the oil is ultimately going to be marketed to the world economy, what difference does it make if the tar sands are oil is brought to Pine Bend, Nederland, Texas or Kitmat B.C. The price is the same. Transportation costs don’t figure into the price of oil or refined products. It might make a difference for airlines which purchase their special fuel at wholesale. But these are dealings between virtual monopolies. The Minnesota refineries exist because of the airline industry. Prices to consumers are controlled to be pegged to commodity markets which are subject to manipulation. In any event I’d take with a large grain of salt any information from a corporation in the oil industry.
2) Are Alberta tar sands really profitable at present prices? The present mines were started a number of years sago, long before prices reached $40/barrel. Obviously Exxon, BP, Suncor and the other corporations involved in mining tar sands are raking in unprecedented profits. That doesn’t mean tar sands are profitable on a stand alone basis. I’d guess that the tar sands are being mined at a huge present loss, even without the environmental costs factored in, in the anticipation of prices going much, much higher. These companies are betting that countries like the US will not be able to shake their addiction to oil.
Right on, Richard and Jon. Most of the easy oil is gone – Like Charlie Joiner’s Daisy Bradford #3 well in East Texas which turned up 6 billion barrels of light sweet Texas crude in 1930. Now its deep water under salt oil in the Gulf and Brazil’s Santos Basin where the wells are costing $100 million each. Or low grade heavy sour stuff like the oil in Alberta and the Orinoco River Basin.
Until now, most of the Alberta oil sands have been literally mined which is cheaper. They make money with oil at $40-$50/barrel. The rest of the oil up there is deeper and will be melted in situ which is more costly, and needs oil at $60 or more. The Middle East still has a lot of low cost oil, but they are happy to limit production and keep the price at current levels around $100. At that price there are at least 170 billion barrels of recoverable oil in Alberta.(we oil people call them oil sands, because it’s not tar which is a resin that comes from trees).
From Jon; “1) If the British Columbia ports are capable of handling the oil, then why hasn’t Canada built their pipelines to British Columbia?”
Lecture continues. The 800 mile Northern Gateway pipeline to Kitimat, BC doesn’t exist. It will also cost upwards of $6 billion and involve tunneling under mountains. The Chinese will apparently finance. The project will have two parallel pipelines, one to carry about 500,000 barrels/day of oil sands crude west. The other will bring about 200,000 barrels/day east of condensate. That’s the light C5-6 oil which is blended with the oil sands gunk to make it flow.
Northern Gateway has its own obstacles including a few Indian tribes whose lands are on the route. Stay tuned. Rolf
The most important reason not to arrange a national energy policy with a view towards maximizing job creation is that such an effort will come at the expense of other priorities, which should take precedence. That is, we want energy that is plentiful, cheap, sustainable (if not renewable), clean (relatively), safe (again, relatively), predictable, and broadly or equitably accessible. The exact balance of those concerns will be informed by contextual preferences and capabilities, but in all cases it is a balancing act and almost invariably a tricky and controversial one. So the idea of pinning our hopes for job creation on the energy sector, and goosing policy accordingly, strikes me as fundamentally misguided.
Our governments, both state and federal, have a serious oil addiction.
While greedy big oil profits about $.04/gallon, the federal government takes $.184/gallon and Minnesota takes an additional $.275/gallon from us. That’s nearly half a buck on a gallon of gasoline.
If we started charging our electric cars from our rooftop solar arrays, the governments would be sent scrambling and scheming to replace all that tax revenue. Not to worry, I know they will find ways.
Rolf@#10: Thanks. I will stay tuned. But what makes you think the Chinese have not financed the Alberta Clipper or Southern Light diluent pipelines or the Keystone XL pipeline?
Jon, Canada is a lot better managed than we are, and doesn’t always need Chinese finance assistance. China will pick and choose, and they will support the pipeline that gets oil to them. They are also very busy in South America and Africa in their search for raw materials and energy supplies.
Steve, I’m with you in wishing we could charge our electric cars from a rooftop solar array. Unfortunately to charge a small Nissan Leaf or the new Chevy Cruze electric from a 240V outlet takes 4 to 6 hours. A big rooftop solar array might manage it in a week of clear weather. In the meantime keep a bicycle handy.
Rolf:
Agreed regarding charging cars, as I wrote in my April 2011 Community Voices column on the Chevy Volt.
Part of my professional work is about improving the manufacturing processes of silicon solar wafers and fuel cells. Presently the best solar wafers are only about 19% efficient. The kind you can purchase for landscape lighting at Menard’s are less than half that. We have a long way to go, which is both bad news and good news.
Thanks, Steve, for that point about solar wafer potential. That’s why I have the feeling that solar energy may be our best renewable hope long term. Even though solar’s current contribution is insignificant.