Empty pipelines spill no oil

The Kinder Morgan pipeline should be built for the same reason as the pyramids –as a national monument.

The pyramids employed workers but served no practical purpose other than an grand burial site for the pharaohs. The humble graves of the workers would have served the pharaohs just as well.

   Composite: David Charbonneau

Construction of the People’s pipeline will employ well-paid union workers. It’s supposed to carry crude oil to Asia but that market doesn’t exist. Therefore, it will serve as a wonderful monument to the “National Interest.”

The pipeline should be built because it serves political interests. Premier Notley’s hopes to be re-elected depend on completion of the pipeline. In her letter to Maclean’s, she said:

“And together, we are building this pipeline — with B.C. workers, using steel made in Saskatchewan, from ore mined in Quebec. Now, it’s time to pick those tools back up, folks. We’ve got a pipeline to build.”

While I’m less optimistic about the future of fossil fuels than Notley, I would rather see her re-elected than Jason Kenney, leader of United Conservative party of Alberta. A progressive premier with delusions about the future of oil sands is better than a retrograde one with similar delusions.

The People’s pipeline will bring the feuding NDP family members back into the fold where they can return to civility. This spat has been an embarrassment for the NDP for the new leader Jagmeet Singh.  Until recently, the NDP was one big happy family; unlike other parties, there is only one party provincially and federally.

The pipeline should be built to strengthen our federation. Prime Minister Trudeau is correct in asserting the nation’s right to move goods to market over the objections of provinces. One province should not have the ability to stop the national transport of commodities.

While the symbolism of the pipeline is strong, the financial rationale for the pipeline hinges on flawed logic. Finance Minister Morneau claims the pipeline is required to get oil to “tidewater” so it can be sold at higher prices than in the U.S.  Economist Robyn Allan is not so sure:

“The facts don’t support the argument. The economics aren’t there. This project is financially compromised and not commercially viable (Globe and Mail, June 2, 2018).”

The fantasy is that Asia will pay more for the goop than it could be sold for in North America. However, in recent years, heavy crude has consistently sold for significantly less in Asia than the U.S.  Refineries in Texas, Louisiana and Mississippi are ready; they have been re-engineered to process the heavy crude of the oil sands.

Just one per cent of the oil in the existing pipeline flows to Asia. Another pipeline won’t change that fraction. Most oil goes to California and Washington State where it is refined and sold back to Canada as expensive automotive fuel.

The financial reality is that TransCanada’s Keystone XL pipeline to the U.S. is a better bet in getting crude oil to market. The off again/on again pipeline is breathing new life under the Trump administration.

The pipeline should be built and remain empty. Everyone will be happy, workers and environmentalists alike.

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Plan B for the XL Keystone pipeline

There’s more than one way for Big Oil to get Alberta’s landlocked tar sands to refineries on the Texas coast. If President Obama won’t approve the XL Keystone pipeline through the U.S., they’ll do an end run and go through Atlantic Canada.

EnergyEast1

Of course, that’s not how the Energy East pipeline is being sold. They’re telling us that it’s a nation-building exercise that unites Canada. The smooth-talking deputy chairman of TD Bank, Frank McKenna, puts it this way: “Energy East, much like the Canadian railway, is a true representation of nation-building at its very best.”

Ah, nation-building warms my heart. We could sure use some unity when it comes to energy self-sufficiency. As it now stands, we have a surplus in the west and a deficiency end the east. While Western Canada is trying to sell oil and gas, Eastern Canada has to import it from elsewhere. Lamentably, we import nearly one-half of the gas used to power our vehicles from overseas.

On the surface of the circumstances, an Energy East pipeline seems to solve the problem of national energy security and the problem of getting oil to market. Except that the refineries in the east can’t process the oil that Alberta produces. Canadian Geographic magazine puts it this way:

“Canada produces a fair amount of heavy crude oil, and the refineries in Eastern Canada only process light crude oil. (Crude oil is raw, unrefined petroleum, and is measured by density, from heavy to light.) As a result, the gas Canadians east of Sarnia fill their tanks with is usually refined from oil imported from Norway’s North Sea, Nigeria and the Middle East.”

Frank McKenna knows that. The real purpose of the Energy East pipeline is to get crude oil to refineries on the U.S.; Big Oil spokesmen are more candid about their intentions. Joyce Nelson exposes this deceit  in a newsletter from the Canadian Centre for Policy Alternatives:

“Contradicting this faux-patriotism was none other than TransCanada CEO Russ Girling, who explained not 48 hours before filing the National Energy Board application why his company was really building the pipeline. Despite the nationalist spin, and promises to supply East Coast refiners with cheaper crude to replace imports, Girling told the Wall Street: ‘We can actually go all the way to the Gulf Coast without a presidential permit,’ said the CEO, referring to resistance in Washington to the Keystone XL pipeline. ‘Once we’re on the water, we’ll show up just like any other crude oil in the world in the Houston ship channel.’”

Plan B is even economical, adds Girling, “probably a couple of bucks more than Keystone.” A joint report from Environmental Defence and Greenpeace found the Energy East project “would supply very little oil to any Canadian refineries,” and that up to 90 per cent of its capacity would flow unrefined onto tankers for export, with enormous social and environmental consequences.

What do we get in return for an end run around Keystone XL pipeline? All the  risk and little benefit.