This past Sunday (Feb 17, 2013) saw between 35,000 and 50,000 people show up at the White House, in the cold, to protest the lack of action on Climate Change and the potential approval of the Keystone XL, tar-sands oil pipeline.
If you still don't know what the big fight is about, it's past time to get on board.
In general, the biggest problem on Climate Change for the entire world is two-fold.
The United States is both the biggest contributor to environmental contamination leading to Climate Change and also the biggest obstructor to making any resolution to the problem.
This post is about only one issue related to Climate Change though, and that is the problem presented by the Canadian, Keystone XL pipeline.
This pipeline poses both a local and worldwide environmental impact and represents a major declaration of the stance of the United States Government on the future of energy production and protection of the environment, especially regarding irreversible ground water contamination and carbon dioxide air contamination (global warming).
Thanks to Common Dreams for the following excellent article clearly describing the issues surrounding KXL.
Presidential
decisions often turn out to be far less significant than imagined, but
every now and then what a president decides actually determines how the
world turns. Such is the case with the Keystone XL pipeline, which, if
built, is slated to bring some of the “dirtiest,” carbon-rich oil on the
planet from Alberta, Canada, to refineries on the U.S. Gulf Coast. In
the near future, President Obama is expected to give its construction a
definitive thumbs up or thumbs down, and the decision he makes could
prove far more important than anyone imagines. It could determine the
fate of the Canadian tar-sands industry and, with it, the future
well-being of the planet. If that sounds overly dramatic, let me
explain.
Sometimes, what starts out as a minor skirmish can wind up
determining the outcome of a war -- and that seems to be the case when
it comes to the mounting battle over the
Keystone XL pipeline.
If given the go-ahead by President Obama, it will daily carry more than
700,000 barrels of tar-sands oil to those Gulf Coast refineries,
providing a desperately needed boost to the Canadian energy industry. If
Obama says no, the Canadians (and their American backers) will
encounter possibly insuperable difficulties in exporting their heavy
crude oil, discouraging further investment and putting the industry’s
future in doubt.
The battle over Keystone XL was initially joined in the summer of
2011, when environmental writer and climate activist Bill McKibben and
350.org, which he helped found, organized a series of non-violent
anti-pipeline protests in front of the
White House to
highlight
the links between tar sands production and the accelerating pace of
climate change. At the same time, farmers and politicians in Nebraska,
through which the pipeline is set to pass, expressed grave concern about
its threat to that state’s crucial aquifers. After all, tar-sands crude
is highly corrosive, and leaks are a
notable risk.
In mid-January 2012, in response to those concerns, other worries
about the pipeline, and perhaps a looming presidential campaign season,
Obama
postponed
a decision on completing the controversial project. (He, not Congress,
has the final say, since it will cross an international boundary.)
Now, he must decide on a suggested new route that will, supposedly, take
Keystone XL around those aquifers and so reduce the threat to
Nebraska’s water supplies.
Ever since the president postponed the decision on whether to proceed, powerful forces in the energy industry and
government have been mobilizing to press ever harder for its approval. Its supporters
argue
vociferously that the pipeline will bring jobs to America and enhance
the nation’s “energy security” by lessening its reliance on Middle
Eastern oil suppliers. Their true aim, however, is far simpler: to save
the tar-sands industry (and many billions of dollars in U.S.
investments) from possible disaster.
Just how critical the fight over Keystone has become in the eyes of
the industry is suggested by a recent pro-pipeline editorial in the
trade publication
Oil & Gas Journal:
“Controversy over
the Keystone XL project leaves no room for compromise. Fundamental views
about the future of energy are in conflict. Approval of the project
would acknowledge the rich potential of the next generation of fossil
energy and encourage its development. Rejection would foreclose much of
that potential in deference to an energy utopia few Americans support
when they learn how much it costs.”
Opponents of Keystone XL, who are planning a mass demonstration at the White House
on February 17th,
have also come to view the pipeline battle in epic terms. “Alberta’s
tar sands are the continent’s biggest carbon bomb,” McKibben
wrote
at TomDispatch. “If you could burn all the oil in those tar sands,
you’d run the atmosphere’s concentration of carbon dioxide from its
current 390 parts per million (enough to cause the climate havoc we’re
currently seeing) to nearly 600 parts per million, which would mean if
not hell, then at least a world with a similar temperature.” Halting
Keystone would not by itself prevent those high concentrations, he
argued, but would impede the production of tar sands, stop that “carbon
bomb” from further heating the atmosphere, and create space for a
transition to renewables. “Stopping Keystone will buy time,” he
says, “and hopefully that time will be used for the planet to come to its senses around climate change.”
A Pipeline With Nowhere to Go?
Why has the fight over a pipeline, which, if completed, would provide
only 4% of the U.S. petroleum supply, assumed such strategic
significance? As in any major conflict, the answer lies in three
factors: logistics, geography, and timing.
Start with logistics and consider the tar sands themselves or, as the
industry and its supporters in government prefer to call them, “oil
sands.” Neither tar nor oil, the
substance in question
is a sludge-like mixture of sand, clay, water, and bitumen (a degraded,
carbon-rich form of petroleum). Alberta has a colossal supply of the
stuff -- at least a trillion barrels in known reserves, or the
equivalent of all the conventional oil burned by humans since the onset
of commercial drilling in 1859. Even if you count only the reserves
that are deemed extractible by existing technology, its tar sands
reportedly are the equivalent of
170 billion barrels
of conventional petroleum -- more than the reserves of any nation
except Saudi Arabia and Venezuela. The availability of so much untapped
energy in a country like Canada, which is private-enterprise-friendly
and where the political dangers are few, has been a
magnet
for major international energy firms. Not surprisingly, many of them,
including ExxonMobil, Chevron, ConocoPhillips, and Royal Dutch Shell,
have invested heavily in tar-sands operations.
The conclusion is obvious: without Keystone
XL, the price of tar-sands oil will remain substantially lower than
conventional oil (as well as unconventional oil extracted from shale
formations in the United States), discouraging future investment and
dimming the prospects for increased output.
Tar sands, however, bear little resemblance to the conventional oil
fields which these companies have long exploited. They must be
treated
in various energy-intensive ways to be converted into a transportable
liquid and then processed even further into usable products. Some tar
sands can be strip-mined like coal and then “upgraded” through chemical
processing into a synthetic crude oil -- SCO, or “syncrude.”
Alternatively, the bitumen can be pumped from the ground after the sands
are exposed to steam, which liquefies the bitumen and allows its
extraction with conventional oil pumps. The latter process, known as
steam-assisted gravity drainage (SAGD), produces a heavy crude oil. It
must, in turn, be diluted with lighter crudes for transportation by
pipeline to specialized refineries equipped to process such oil, most of
which are located on the Gulf Coast.
Extracting and processing tar sands is an extraordinarily expensive
undertaking, far more so than most conventional oil drilling operations.
Considerable energy is needed to dig the sludge out of the ground or
heat the water into steam for underground injection; then, additional
energy is needed for the various upgrading processes. The
environmental risks
involved are enormous (even leaving aside the vast amounts of
greenhouse gases that the whole process will pump into the atmosphere).
The massive quantities of water needed for SAGD and those upgrading
processes, for example, become
contaminated
with toxic substances. Once used, they cannot be returned to any water
source that might end up in human drinking supplies -- something
environmentalists
say
is already occurring. All of this and the expenses involved mean that
the multibillion-dollar investments needed to launch a tar-sands
operation can only pay off if the final product fetches a healthy price
in the marketplace.
And that’s where geography enters the picture. Alberta is theoretically
capable of producing five to six million barrels of tar-sands oil per day. In 2011, however, Canada itself
consumed
only 2.3 million barrels of oil per day, much of it supplied by
conventional (and cheaper) oil from fields in Saskatchewan and
Newfoundland. That number is not expected to rise appreciably in the
foreseeable future. No less significant, Canada’s refining capacity for
all kinds of oil is limited to 1.9 million barrels per day, and few of
its refineries are equipped to process tar sands-style heavy crude. This
leaves the producers with one strategic option: exporting the stuff.
And that’s where the problems really begin. Alberta is an interior
province and so cannot export its crude by sea. Given the geography,
this leaves only three export options: pipelines heading east across
Canada to ports on the Atlantic, pipelines heading west across the
Rockies to ports in British Columbia, or pipelines heading south to
refineries in the United States.
Alberta’s preferred option is to send the preponderance of its
tar-sands oil to its biggest natural market, the United States. At
present, Canadian pipeline companies do operate a
number of conduits
that deliver some of this oil to the U.S., notably the original
Keystone conduit extending from Hardisty, Alberta, to Illinois and then
southward to Cushing, Oklahoma. But these lines can carry less than one
million barrels of crude per day, and so will not permit the massive
expansion of output the industry is planning for the next decade or so.
In other words, the
only pipeline now under development that
would significantly expand Albertan tar-sands exports is Keystone XL.
It is vitally important to the tar-sands producers because it offers
the sole short-term -- or possibly even long-term -- option for the
export and sale of the crude output now coming on line at dozens of
projects being developed across northern Alberta. Without it, these
projects will
languish
and Albertan production will have to be sold at a deep discount -- at,
that is, a per-barrel price that could fall below production costs,
making further investment in tar sands unattractive. In January,
Canadian tar-sands oil was already
selling for $30-$40 less than West Texas Intermediate (WTI), the standard U.S. blend.
The Pipelines That Weren’t
Like an army bottled up geographically and increasingly at the mercy
of enemy forces, the tar-sands producers see the completion of Keystone
XL as their sole realistic escape route to survival. “Our biggest
problem is that Alberta is landlocked,” the province’s finance minister
Doug Horner
said
in January. “In fact, of the world’s major oil-producing jurisdictions,
Alberta is the only one with no direct access to the ocean. And until
we solve this problem... the [price] differential will remain large.”
Logistics, geography, and finally timing. A presidential stamp of
approval on the building of Keystone XL will save the tar-sands
industry, ensuring them enough return to justify their massive
investments. It would also undoubtedly prompt additional investments in
tar-sands projects and further production increases by an industry that
assumed opposition to future pipelines had been weakened by this
victory.
A presidential thumbs-down and resulting failure to build Keystone
XL, however, could have lasting and severe consequences for tar-sands
production. After all, no other export link is likely to be completed in
the near-term. The other three most widely discussed
options
-- the Northern Gateway pipeline to Kitimat, British Columbia, an
expansion of the existing Trans Mountain pipeline to Vancouver, British
Columbia, and a plan to use existing, conventional-oil conduits to carry
tar-sands oil across Quebec, Vermont, and New Hampshire to Portland,
Maine -- already face intense opposition, with initial construction at
best still years in the future.
(Map: Inside Climate News)
The Northern Gateway project, proposed by Canadian pipeline company
Enbridge, would stretch from Bruderheim in northern Alberta to Kitimat, a
port on Charlotte Sound and the Pacific. If completed, it would allow
the export of tar-sands oil to Asia, where Canadian Prime Minister
Stephen Harper
sees
a significant future market (even though few Asian refineries could now
process the stuff). But unlike oil-friendly Alberta, British Columbia
has a strong pro-environmental bias and many senior provincial officials
have expressed
fierce opposition
to the project. Moreover, under the country’s constitution, native
peoples over whose land the pipeline would have to travel must be
consulted on the project -- and most tribal communities are
adamantly opposed to its construction.
Another proposed conduit -- an expansion of the existing Trans
Mountain pipeline from Edmonton to Vancouver -- presents the same set of
obstacles and, like the Northern Gateway project, has aroused
strong opposition in Vancouver.
This leaves the third option, a plan to pump tar-sands oil to Ontario
and Quebec and then employ an existing pipeline now used for oil
imports. It connects to a terminal in Casco Bay, near Portland, Maine,
where the Albertan crude would begin the long trip by ship to those
refineries on the Gulf Coast. Although no official action has yet been
taken to allow the use of the U.S. conduit for this purpose,
anti-pipeline protests have already erupted in Portland, including one
on
January 26th that attracted more than 1,400 people.
With no other pipelines in the offing, tar sands producers are
increasing their reliance on deliveries by rail. This is producing
boom times
for some long-haul freight carriiers, but will never prove sufficient
to move the millions of barrels in added daily output expected from
projects now coming on line.
The conclusion is obvious: without Keystone XL, the price of
tar-sands oil will remain substantially lower than conventional oil (as
well as unconventional oil extracted from shale formations in the United
States), discouraging future investment and dimming the prospects for
increased output. In other words, as Bill McKibben hopes, much of it
will stay in the ground.
Industry officials are painfully aware of their predicament. In an
Annual Information Form released at the end of 2011, Canadian Oil Sands
Limited, owner of the largest share of Syncrude Canada (one of the
leading producers of tar-sands oil) noted:
“A prolonged period
of low crude oil prices could affect the value of our crude oil
properties and the level of spending on growth projects and could result
in curtailment of production... Any substantial and extended decline in
the price of oil or an extended negative differential for SCO compared
to either WTI or European Brent Crude would have an adverse effect on
the revenues, profitability, and cash flow of Canadian Oil Sands and
likely affect the ability of Canadian Oil Sands to pay dividends and
repay its debt obligations.”
The stakes in this battle could not be higher. If Keystone XL fails
to win the president’s approval, the industry will certainly grow at a
far slower pace than forecast and possibly witness the failure of costly
ventures, resulting in an industry-wide contraction. If approved,
however, production will soar and global warming will occur at an even
faster rate than previously projected. In this way, a presidential
decision will have an unexpectedly decisive and lasting impact on all
our lives.
© 2013 Michael T. Klare
Michael T. Klare is the Five College Professor of Peace and
World Security Studies at Hampshire College in Amherst, Massachusetts. His newest book, The Race for What's Left: The Global Scramble for the World's Last Resources, has just recently been published. His other books include: Rising Powers, Shrinking Planet: The New Geopolitics of Energy and Blood and Oil: The Dangers and Consequences of America's Growing Dependence on Imported Petroleum. A documentary version of that book is available from the Media Education Foundation.
Claiming
the center ground on energy policy will not be easy for conservatives.
And they aren’t off to an impressive start. They launched their social
media in mid-December and are struggling to gain a following. Their
facebook page, titled Michigan Conservative Energy Forum,
isn’t exactly catching fire with 88 “likes” as of this writing. Their
mission statement sounds reasonable enough though, yet it will certainly
garner detractors from both the left and the right.
