Keystone XL Pipeline Project thread

[Indy Texas]

Solar is damn cheap at 74 cents a watt.

In what universe do we measure energy costs by the watt?

A universe in which we are measure the cost to accomplish a particular peak load.  Given the inability of solar to provide 24/7 power, the capital costs per Kwh will be higher because a solar plant will have fewer hours to recoup the investment.  However, in many areas, peak load occurs due to heavy AC use.  Since the conditions which cause the heaviest AC use also happen to be excellent ones for solar power, it is quite conceivable that solar would be useful as part of the mix, tho obviously as base load generating system it is still pricey.

From an energy company's decision-making perspective, how many hours it takes to recoup the investment is what is critical. The figures I provided were based on what the average price per MWh would have to be in order to recoup capital costs for investing in a given type of power plant. Energy companies put power online in order of increasing marginal cost; the cheapest power per MWh is their baseload. As demand increases, and by extension prices increase, they can start fulfilling demand with higher cost power. Energy Company X is not going to build a solar generating facility to satisfy the marginal peak load that only gets experienced occasionally unless it can sell that power at a price that provides a reasonable rate of return on their investments. The fact that people may use more power when it's sunny out doesn't factor into the picture; the fact that electricity spot prices are going to be a lot higher when it's 100 degrees out and sunny is what's going to factor into it.

But again, I am coming at this from the perspective of the Texas energy grid and the bizarre Rube Goldberg public-private-partnership that is the Electricity Reliability Council of Texas (ERCOT). We've managed to create a situation where energy companies can make more money by not satisfying peak load, and where bureaucrats can claim their price caps are "protecting consumers" when all they're really doing is giving zero incentive to invest in new generating capacity.

[Frodo]

Final decision on the Keystone Pipeline (the northern leg) will be made this June.

The southern leg is already under construction.  

[DINGO Joe]

The supposed theory of Keystone is to make us less reliant on foreign oil--or since Canada actually is a foreign country, then less reliant on unstable countries foreign oil.  So, why are Sen Murkowski and the API trying to get the ban on exporting crude oil from the US (to places other than Canada) lifted?

http://www.bloomberg.com/news/2014-01-08/calls-to-drop-1970s-era-u-s-oil-export-ban-stir-fight.html

[Deus Naturae]

The supposed theory of Keystone is to make us less reliant on foreign oil--or since Canada actually is a foreign country, then less reliant on unstable countries foreign oil.  So, why are Sen Murkowski and the API trying to get the ban on exporting crude oil from the US (to places other than Canada) lifted?

http://www.bloomberg.com/news/2014-01-08/calls-to-drop-1970s-era-u-s-oil-export-ban-stir-fight.html

Exporting oil to other countries would make them more dependent on us, not the other way around.

[DINGO Joe]

The supposed theory of Keystone is to make us less reliant on foreign oil--or since Canada actually is a foreign country, then less reliant on unstable countries foreign oil.  So, why are Sen Murkowski and the API trying to get the ban on exporting crude oil from the US (to places other than Canada) lifted?

http://www.bloomberg.com/news/2014-01-08/calls-to-drop-1970s-era-u-s-oil-export-ban-stir-fight.html

Exporting oil to other countries would make them more dependent on us, not the other way around.

Well, several Central and South American countries are currently reliant on the US for finished crude products.   If the US were to export crude, they might find it cheaper to build their own refineries and just import crude.  Either way, if the US were to export crude, it would makes US slighty more likely to increase imports of Persian Gulf oil, not less.

A little more background

http://www.bloomberg.com/news/2014-01-08/unforseen-u-s-oil-boom-upends-world-markets-as-drilling-spreads.html

[Grumpier Than Uncle Joe]

He could use his newly found pen and phone and make it a reality right now.

[Link]

A push by environmental groups against the project may be affecting public opinion: 58 percent of poll respondents say they want Canada to take steps to reduce carbon dioxide emissions as a condition for approval, with 32 percent opposing such a requirement.

Canada is a tiny country population wise.  What do their miniscule Green House emissions have to do with anything?

[Queen Mum Inks.LWC]

A push by environmental groups against the project may be affecting public opinion: 58 percent of poll respondents say they want Canada to take steps to reduce carbon dioxide emissions as a condition for approval, with 32 percent opposing such a requirement.

Canada is a tiny country population wise.  What do their miniscule Green House emissions have to do with anything?

Although per capita their emission rates are pretty high.

[Comrade Funk]

The left getting infected by knee-jerk bourgeois environmentalism is unfortunate. This pipeline is significantly safer than the alternative (delivering the oil by rail) anyway.

[New_Conservative]

The left getting infected by knee-jerk bourgeois environmentalism is unfortunate. This pipeline is significantly safer than the alternative (delivering the oil by rail) anyway.

This is the first thing I have agreed with you ever since I joined the board.

[DINGO Joe]

The left getting infected by knee-jerk bourgeois environmentalism is unfortunate. This pipeline is significantly safer than the alternative (delivering the oil by rail) anyway.

While I would in general agree with this statement, the fact that tar sands oil has to be diluted with a liquid called natural gasoline, which has to be piped up to Canada plus the fact that tar sands oil is not very flammable, as opposed to Bakken crude, means that tar sands may be more cost effective to rail, especially as more heated rail cars are built.  To me, the best solution would be for Bakken to be piped and tar sands railed, but the refiners on the gulf coast have ample supplies of light oil from the Eagle Ford while East and West coast refiners are the ones who can use it.  Gulf Coast refiners could retool to handle more light crude, but they're making too much money right now to stop and spend money on retooling.

[windjammer]

Ugh.

[Gass3268]

Ugh.

[True Federalist (진정한 연방 주의자)]

The left getting infected by knee-jerk bourgeois environmentalism is unfortunate. This pipeline is significantly safer than the alternative (delivering the oil by rail) anyway.

While I would in general agree with this statement, the fact that tar sands oil has to be diluted with a liquid called natural gasoline, which has to be piped up to Canada plus the fact that tar sands oil is not very flammable, as opposed to Bakken crude, means that tar sands may be more cost effective to rail, especially as more heated rail cars are built.  To me, the best solution would be for Bakken to be piped and tar sands railed, but the refiners on the gulf coast have ample supplies of light oil from the Eagle Ford while East and West coast refiners are the ones who can use it.  Gulf Coast refiners could retool to handle more light crude, but they're making too much money right now to stop and spend money on retooling.

What that suggests is that it might be reasonable to semi-refine the oil at the tar sands.  However, the practicalities and politics of greenhouse gases might have an effect.  I could see where two-stage refining might cause increased emissions, plus it certainly looks better for Canada if the emissions from refining took place in a foreign country.

[DINGO Joe]

The left getting infected by knee-jerk bourgeois environmentalism is unfortunate. This pipeline is significantly safer than the alternative (delivering the oil by rail) anyway.

While I would in general agree with this statement, the fact that tar sands oil has to be diluted with a liquid called natural gasoline, which has to be piped up to Canada plus the fact that tar sands oil is not very flammable, as opposed to Bakken crude, means that tar sands may be more cost effective to rail, especially as more heated rail cars are built.  To me, the best solution would be for Bakken to be piped and tar sands railed, but the refiners on the gulf coast have ample supplies of light oil from the Eagle Ford while East and West coast refiners are the ones who can use it.  Gulf Coast refiners could retool to handle more light crude, but they're making too much money right now to stop and spend money on retooling.

What that suggests is that it might be reasonable to semi-refine the oil at the tar sands.  However, the practicalities and politics of greenhouse gases might have an effect.  I could see where two-stage refining might cause increased emissions, plus it certainly looks better for Canada if the emissions from refining took place in a foreign country.

They do that to an extent, as there is a product called Syncrude that is produced in Canada, but they've maxed out the refining in the area and there is no advantage to doing refining away from end users or export capacity.  Keystone is really all about Canada getting a better price for their tar sands, either from gulf coast refiners or loading it up and shipping it to Asia via Houston.  Remember, there are laws against the US exporting crude oil, but not Canada via the US.  As for the emissions angle, I really don't have any knowledge of that, except that it is more energy intensive to refine heavy or mixed oils than light oils, but also refiners are always most efficient refining oil that they are configured for.

[New_Conservative]

How do Canadians feel about the Keystone XL Pipeline?

[DINGO Joe]

How do Canadians feel about the Keystone XL Pipeline?

They're getting $20 less a barrel than they think they should be getting, how do you think they feel about it?  By they I mean the producers.  People in BC aren't crazy about building pipelines through there, hence delays many hoops to jump through over there.  As for Eastern Canada, I doubt they care much.

[MaxQue]

How do Canadians feel about the Keystone XL Pipeline?

They're getting $20 less a barrel than they think they should be getting, how do you think they feel about it?  By they I mean the producers.  People in BC aren't crazy about building pipelines through there, hence delays many hoops to jump through over there.  As for Eastern Canada, I doubt they care much.

Most Eastern Canadians I know dislike it, but mostly because they dislike Alberta or oil companies.

[Clarko95 📚💰📈]

Apparently the big bone most environmentally-concerned people have with this is how it cuts through the Ogallala Aquifer. (Notice i said "enviro-concerned", not hard-core "environmentalists" who oppose it entirely)

That's also the reason many local Republicans in the states though which it cuts (Nebraska, Kansas, SD) are also wary of the project. It's their drinking and irrigation water you're talking about.

I see the map goes through Steele City as a major terminus. What exactly is up there? Existing oil terminals? Can someone say?

Is it possible to move the pipeline east so as not to cut through the aquifer, or are there other factors involved?

[DINGO Joe]

Here's a slightly better map




The route has been changed to avoid potentially sensitive areas.  Really, there was never a threat to Ogallala.  The primary contention has been that Tar Sands oil is high carbon intensive even compare to other oil, so many environmentalists want to make it as difficult as possible to get the oil to market and thus limit it's use.  The counter argument is that it would displace Venezuelan oil which is even worse.    Whether it displaces Venezuelan oil or not or whether it all gets exported is a legitimate question. And if it's going to get exported why don't the Canucks build their own damn pipeline?

Steele City, as shown on this map is an important location because it hooks up with a pipeline to the Midwest/Mississippi River, but the Midwest is getting all the Canadian oil it can handles as is.  It's all about the Gulf Coast.

[Frodo]

Newest poll out (this time from USA Today) shows that support for the pipeline remains unchanged since December with 56% favoring its construction.  

[DINGO Joe]

November numbers are out from the EIA

http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MTTNTUS2&f=M

Net imports down to 5.334 million barrels per day, the lowest since 1990 and Dec will be the lowest since 1986.  Excluding imports from Canada and Mexico, our net imports were 2.4 million, I'll go out on a limb and say that number hits zero in Dec of 2015.

[Frodo]

Still early, but all signs point to President Obama approving the construction of this pipeline:

Keystone Report Said Likely to Disappoint Foes on Climate

By Jim Snyder, Mark Drajem and Jonathan Allen 
Jan 30, 2014 10:23 PM ET

The U.S. State Department is preparing a report that will probably disappoint environmental groups and opponents of the Keystone pipeline, according to people who have been briefed on the draft of the document.

While the report will deviate from a March draft in some ways to the liking of environmentalists, the changes won’t be as sweeping as they had sought, several people familiar with the government’s deliberations over the review told Bloomberg News. Changes could still be made to the report before its release, which may come tomorrow.

The March report concluded that the Canada-U.S. oil pipeline would have only a minimal impact on carbon emissions, because the oil sands in Alberta will be developed anyway. Several people briefed on the findings, who spoke on the condition of anonymity to discuss private conversations, said they expect the final report will track that conclusion.

[Bandit3 the Worker]

If they build it, then the U.S. should get some of the oil from it instead of letting it get shipped overseas. Fair is fair.

[Ban my account ffs!]

I agree with Bandit:  if we are going to build it, we should at least either get some of the oil from it in return... or the states should be able to tax it based on volume.

I personally would have preferred them to run the new line right along the old line... and then invest in extra-super-safe safety measures around the double pipelines to prevent any spills from spreading.  Plus it makes it easier from an operations standpoint for maintenance staffing, etc.

In the end, the cost of renewables continues to come down and they will be more competitive for electricity production.  And beyond that, I think we'll make some serious strides in electric self driving vehicles and America will be changed forever... for the better.