The two biggest sources of oil in North America produce significantly different types of oil, and the lack infrastructure to link those sources to proper refineries results in higher costs and less competitiveness on the global oil market.
A great piece from ZeroHedge, Oil Price Differentials: Caught Between The Sands And The Pipelines, will provides useful background to US energy infrastructure, and how it is impacting (impeding) the vast flow of Canadian oil. I give a brief summary of the article below, and will likely reference this post in the future.
A “range of oil qualities and a raft of infrastructure issues are creating record price differentials. And with no solution in sight, [the authors] think those differentials are here to stay.” Historically, United States oil infrastructure has been built to refine large quantities of imported oil – essentially from the perimeter of the lower 48 states, and shipping it towards the interior – but this is the opposite of present day needs, which require oil from the interior of the country to be moved to outlying refineries.
The bottom line is, I can’t see how maneuvers like this are going to help anything, no less foster a serious energy discussion within the United States.
So many excellent points made. Thank you, Steve Anderson, for being a brave and thoughtful American to say these things, in light of tremendous opposition and politicization.
A personal favorite, and something I will be writing an upcoming article about…
Two weeks ago I read that Dubai will invest $2.7B in solar energy next year. Now Dubai is an emirate surrounded by the world’s largest oil fields and their economy is 250 times smaller than ours, yet they are astute enough to see the consequences of an oil-dependent economy and are willing to invest now in renewable energy in a huge way. Why aren’t we?
A good recap for what has happened so far and how KXL has become so politicized.
The amount of adds for ‘clean energy’ relating to KXL or natural gas development has definitely skyrocketed in the last few months. Almost every news station I watch on TV has a good does of energy companies explaining how economically beneficial the project/s will be, and how they won’t do it if the project isn’t safe.
I think the problem is that there is a huge need in many ways for the project, but the thing that perhaps isn’t getting as much publicity is the number of cases that are springing up about the negative side effects of the projects (although I’ll say more so that’s in regard to Hydrofracking, for now).
I personally would like to see more deliberation about what exactly each thing will do - what will KXL do, what are the jobs that will be made, where is the new route - Nebraska state government was able to get Transcanada to adjust the route. But cut out the flamboyance, the exhaggeration of job numbers, and don’t pretend like there aren’t any risk.
I think what Americans are most hungry for, deep down, is to be treated like adults who are willing to listen to serious situations and understand the world is a complex place — not appeasing to histrionics of any broad sense of ideology. I actually would like the energy companies themselves to be more open about the risks, and not just talk about the benefits. And I wish the government was more unified in presenting energy challenges and opportunities to the public, as opposed to making it seem like some choice about what or who to believe is ‘right’. There isn’t an easy answer to any of this, so nobody should act like there is.
The US State Department recommends blowing off the 60 day deadline requested by congress, and Obama agrees with it. Barack Obama’s press release and a reaction from a labor union.
Curiously, the transcanada website offers different takes on the actual number of jobs created.
Earlier today, I received the Secretary of State’s recommendation on the pending application for the construction of the Keystone XL Pipeline. As the State Department made clear last month, the rushed and arbitrary deadline insisted on by Congressional Republicans prevented a full assessment of the pipeline’s impact, especially the health and safety of the American people, as well as our environment. As a result, the Secretary of State has recommended that the application be denied. And after reviewing the State Department’s report, I agree.
This announcement is not a judgment on the merits of the pipeline, but the arbitrary nature of a deadline that prevented the State Department from gathering the information necessary to approve the project and protect the American people. I’m disappointed that Republicans in Congress forced this decision, but it does not change my Administration’s commitment to American-made energy that creates jobs and reduces our dependence on oil. Under my Administration, domestic oil and natural gas production is up, while imports of foreign oil are down. In the months ahead, we will continue to look for new ways to partner with the oil and gas industry to increase our energy security –including the potential development of an oil pipeline from Cushing, Oklahoma to the Gulf of Mexico – even as we set higher efficiency standards for cars and trucks and invest in alternatives like biofuels and natural gas. And we will do so in a way that benefits American workers and businesses without risking the health and safety of the American people and the environment.
Environmental groups have used the Keystone XL as a disingenuous proxy for arguments about global warming. The pipeline would carry up to 900,000 barrels of oil a day from Canada’s Tar Sands to the U.S., reducing reliance on oil from hostile nations. While environmental groups decry Tar Sands development, the Canadian government and Trans-Canada, the company developing the Tar Sands, have made clear the oil will be developed – and possibly sold to China – regardless of whether Keystone XL is built.
In addition, experts believe the project would be the safest ever constructed. Design included 21,000 sensors, monitored by satellites to immediately detect leaks and automatically stop the flow of oil. In addition, a revised route alleviated concerns in Nebraska over the project crossing water resources. Overall, the pipeline has undergone more than 1,100 days of governmental review.
“The Administration and environmentalists have blown the whistle on workers trying to feed their families and keep a roof over their heads,” said O’Sullivan. “Instead of celebrating their victory by hugging a tree they should hug a jobless construction worker because they’re the ones who are going to need it.”
I personally would be surprised if KXL was not created, in some form or another… but I think this editorial is asking for a more honest and open energy dialogue within the US, which is what I would like to see
The Republicans’ claim that the pipeline will create tens of thousands of new jobs — 20,000 according to House Speaker John Boehner and 100,000 according to Jon Huntsman — are wildly inflated. A more accurate forecast from the federal government, one with which TransCanada, the pipeline company, agrees, says the project would create 6,000 to 6,500 temporary construction jobs at best, for two years.
The country obviously needs more jobs. Mr. Obama needs to lay out the case that industry, with government help, can create hundreds of thousands of clean energy jobs without incurring environmental risks — by upgrading old power plants to comply with environmental laws, retrofitting commercial and residential buildings that soak up nearly 40 percent of the country’s energy (and produce nearly 40 percent of its carbon emissions) and promoting growth in new industries like wind and solar power and advanced vehicles.
By even the most conservative estimates, the power plant upgrades required by the new rule governing mercury emissions are expected to create about 45,000 temporary construction jobs over the next five years, and as many as 8,000 permanent jobs as utilities install pollution control equipment. And while the projects are new and the numbers tentative, the Energy Department predicts that its loan guarantee programs could create more than 60,000 direct jobs in the solar and wind industries and in companies developing advanced batteries and other components for more fuel-efficient cars….
So, a take on things from the other side of the border for the Keystone XL saga, among other things. (Also, the EIA released several outlooks today, including liquid fuel).
Canada is on the edge of an historic choice: to diversify our energy markets away from our traditional trading partner in the United States or to continue with the status quo.
Virtually all our energy exports go to the US. As a country, we must seek new markets for our products and services and the booming Asia-Pacific economies have shown great interest in our oil, gas, metals and minerals…
….These groups threaten to hijack our regulatory system to achieve their radical ideological agenda. They seek to exploit any loophole they can find, stacking public hearings with bodies to ensure that delays kill good projects. They use funding from foreign special interest groups to undermine Canada’s national economic interest. They attract jet-setting celebrities with some of the largest personal carbon footprints in the world to lecture Canadians not to develop our natural resources. Finally, if all other avenues have failed, they will take a quintessential American approach: sue everyone and anyone to delay the project even further. They do this because they know it can work. It works because it helps them to achieve their ultimate objective: delay a project to the point it becomes economically unviable.
