That Pipeline

[RobDownSouth]

All this angst over 35 full-time jobs.

 

[trysail]

Even the economic buffoons at the witless Washington Post say:

...Mr. Obama should ignore the activists who have bizarrely chosen to make Keystone XL a line-in-the-sand issue...

http://www.washingtonpost.com/opini...6f709c-5b77-11e2-beee-6e38f5215402_story.html

 

[trysail]

The dopes who have opposed the Keystone XL pipeline already have blood on their hands. It's only a matter of time until there's more.

The Keystone XL pipeline should have been approved years ago.

​

Mayor: ND Town Dodged A Bullet In Crude Explosion

by The Associated Press
December 31, 2013

CASSELTON, N.D. (AP) — A southeastern North Dakota town narrowly escaped tragedy when a train carrying crude oil derailed and exploded nearby, the mayor said Tuesday, calling for changes in how the fuel is transported across the U.S.

No one was hurt in Monday's derailment of the mile-long train that sent a great fireball and plumes of black smoke skyward about a mile from the small town of Casselton. The fire had been so intense as darkness fell that investigators couldn't get close enough to count the number of burning cars. The National Transportation Safety Board launched an investigation.

Most residents heeded a recommendation to evacuate their homes as strong winds blew potentially hazardous, acrid smoke toward the town overnight, Mayor Ed McConnell said early Tuesday. Black soot coated parts of Casselton.

"I drove in this morning and looked like most people had left. There weren't a lot of lights on," McConnell said.

The North Dakota Department of Health warned that exposure to burning crude could cause shortness of breath, coughing and itching and watery eyes. It had said those in the vicinity with respiratory conditions such as asthma, bronchitis or emphysema should minimize outdoor activity.

As the wrecked tankers continued to smolder Tuesday, Cass County Sheriff's Sgt. Tara Morris said a contractor hired by the railroad was testing air quality. Readings indicated improvements but authorities aren't yet prepared to "give the all-clear," Morris said.

State health officials said they planned to meet with the railroad's contractor to double-check their data, but had no reason to doubt it.

Residents said the blasts endured for hours after the derailment, shaking their homes and businesses. Official estimates of the extent of the blaze varied. BNSF Railway Co. said it believed about 20 cars caught fire after its oil train left the tracks about 2:10 p.m. Monday. The sheriff's office said Monday it thought 10 cars were on fire. Officials said the cars would be allowed to burn out.

NTSB officials on the scene said an investigation would examine the train recorder, the signal system, the condition of the train operators, train and tracks, as well as the response to the derailment.

Board member Robert Sumwalt said the tankers involved were DOT-111s, a model that has shown a tendency to rupture in other accidents, but he said it wasn't immediately clear if they were newer, safer DOT-111s or the older models.

The rail tracks run straight through the middle of Casselton, a town of 2,400 people about 25 miles west of Fargo. McConnell estimated that dozens of people could have been killed if the derailments had happened within the town. He said it is time to "have a conversation" with federal lawmakers about the dangers of transporting oil by rail.

"There have been numerous derailments in this area," he told The Associated Press. "It's almost gotten to the point that it looks like not if we're going to have an accident, it's when. We dodged a bullet by having it out of town, but this is too close for comfort."

A train carrying crude from North Dakota's Bakken oil patch crashed in Quebec last summer, bursting into flames and killing 47 people.

Shipping oil by pipeline has to be a safer option, McConnell said Tuesday.

North Dakota is the No. 2 oil-producing state in the U.S., trailing only Texas. The state's top oil regulator said earlier this month that he expected as much as 90 percent of North Dakota's oil to be carried by train in 2014, up from 60 percent.

Ron Ness, president of the North Dakota Petroleum Council, called the derailment "extremely unfortunate."

"We're glad no one was hurt," said Ness, whose Bismarck-based group represents several hundred companies working in the state's oil patch. "I certainly think we'll see some continued efforts on safety to the rail system and rail cars."

North Dakota oil drillers increasingly use trains to ship crude to locations not served by pipelines, in part because of the difficulty in securing permits for the structures, Ness said.

"For every action, there is a reaction or counter-action," he said. "Getting any product to market from North Dakota always has been a challenge, whether it is oil, sugar beets or beef. And we have been able to find good markets because the rail industry has responded."

The number of crude oil carloads hauled by U.S. railroads surged from 10,840 in 2009 to a projected 400,000 this year. Despite the increase, the rate of accidents has stayed relatively steady. Railroads say 99.997 percent of hazardous materials shipments reach destinations safely.

Authorities haven't yet been able to untangle exactly what caused the derailment. BNSF spokeswoman Amy McBeth said another train carrying grain derailed first, and that this knocked several cars of the oil train off adjoining tracks.

BNSF said each train comprised more than 100 cars.

___

Associated Press writers James MacPherson in Bismarck, N.D., and Dirk Lammers in Sioux Falls, S.D., contributed.

 

[trysail]

The stupid obstructionism is going to kill more people.




​

__________________________________

http://www.bloomberg.com/news/2014-01-09/crude-derailment-risk-rises-as-trains-haul-more-oil.html




Crude-Derailment Risk Rises as Trains Haul More Oil

By Rebecca Penty and Tim Catts
January 9, 2014

People living near rail lines in the U.S. and Canada could be at increasing risk as trains transport more and more of the output of the continent’s energy boom.

The danger was underscored this week when a Canadian National Railway Co. train hauling propane and crude caught fire en route to a New Brunswick refinery, nine days after the crash of an oil-laden train in North Dakota. They were the latest in a spate of explosive accidents drawing attention to the perils of oil in tank cars on North America’s tracks.

“We’re going to see more disasters, more chances taken,” said John Stephenson, a portfolio manager at First Asset Investment Management Inc. in Toronto who helps oversee C$2.7 billion ($2.49 billion), including shares in pipeline and rail companies. “You’re going to be putting more trains on the track, running at all hours of the day to keep up with demand.”

Train shipments of crude pumped in Western Canada and the U.S. Midwest are projected to double to 2 million barrels a day in the next year, up from 1 million a day in the first nine months of 2013. U.S. government data show that as oil output has surged, so have crude-related train incidents, which were up 12-fold from 2010 to 2013.

Even if TransCanada Corp.’s Keystone XL pipeline is completed, hundreds of thousands of barrels will need to travel on rail lines to get to refineries and ports. The U.S. is on target to be the world’s largest oil producer by 2015.

“There’s no question that exposure drives risk,” said Grady Cothen, former deputy associate administrator for safety standards at the U.S. Federal Railroad Administration. “Something will need to be done.”

Weighing Keystone

As U.S. and Canadian output has risen -- hitting about 11.6 millions barrels a day last year -- trains have shouldered transport duties because there aren’t enough pipelines out of major producing regions.

The concern of some lawmakers and public safety advocates is that the huge amounts of crude coming on line will expose people living near tracks to ever more danger. The U.S. will be pumping 9.5 million barrels a day in 2016, according to the U.S. Energy Information Administration. Canada’s output will reach 3.8 million barrels a day, according to the Canadian Association of Petroleum Producers.

If trains haul more, it’s only logical there will be a risk of more accidents, Cothen said. The recent rail explosions “are events that we wouldn’t have seen as frequently without the ramping up in service.”

‘Trivial’ Difference

Data from the Pipeline and Hazardous Materials Safety Administration, an arm of the U.S. Department of Transportation, show that crude-by-rail incidents climbed to 108 last year from 9 in 2010. They ranged from a fire after the partial derailment of a 90-car train operated by a unit of Genessee & Wyoming Inc. in Aliceville, Alabama, to the discharge of 1/8th of a gallon (470 milliliters) of oil from a Consolidated Rail Corp. train in Camden, New Jersey.

Railroad trade groups have defended rail transport as safe, saying well over 99 percent of all oil shipments are delivered without incident. Malcolm Cairns, a transportation consultant in Brighton, Ontario, and a former director of business research at Canadian Pacific Railway Ltd. (CP), said both railroads and pipelines “are safe means” and that any disputes about the relative difference is “trivial.”

The U.S. is weighing whether to give TransCanada the go-ahead for the $5.4 billion Keystone project, which would connect Canada’s oil sands to Gulf Coast refineries. It would ship about 830,000 barrels a day, and the earliest that any of the other proposed export pipelines could be built in Canada is 2018.

Public Nuisance

Questions about the safety of petroleum on the tracks were raised even before 47 people were killed when rail cars carrying oil from North Dakota exploded in Lac-Megantic, Quebec, in July. It was the worst Canadian rail accident in a century.

There have been other incidents, none deadly, including the one in New Brunswick on Jan. 7, which forced the evacuation of 150 residents in a small town along the tracks. On Dec. 30, fire engulfed tank cars loaded with oil on a Burlington Northern Santa Fe LLC train after a collision west of Fargo, North Dakota, forcing more than 2,000 residents flee the fumes.

After the Lac-Megantic disaster, U.S. and Canadian regulators said they had begun conducting spot checks of the labeling of crude types in tank cars, and the U.S. is considering new rules on railcar construction. Chicago Aldermen Edward Burke and Matthew O’Shea proposed banning the model of tank car most frequently used to haul crude -- called the DOT-111 -- from tracks in the city. The proposed ordinance, introduced Dec. 11, would declare the car a public nuisance.

Tougher Standards

The DOT-111 accounts for about 69 percent of the U.S. tank car fleet, according to the National Transportation Safety Board. NTSB Chairwoman Deborah Hersman said in a 2012 letter to regulators that the model had a “high incidence of tank failures during accidents.”

The Lac-Megantic crash, which caused the derailment of 63 cars including DOT-111s, prompted investigators at Canada’s Transportation Safety Board to include a review of the design in their probe. The Association of American Railroads urged the Pipeline and Hazardous Materials Safety Administration to require the cars to be retrofitted to meet tougher standards or phased out.

The safety board’s early findings are that the brakes applied weren’t strong enough to hold the train in place and that the crude on board should have been labeled as highly dangerous.

‘Utmost Importance’

Trains delivered 11 percent of all the crude produced in the U.S. as of the end of September, about 784,000 barrels a day, up from almost nothing four years ago, according to the Association of American Railroads. Shipments of crude by rail in Canada surged last year to 140,000 carloads, or about 230,000 barrels a day, from about 500 carloads in 2009, according to the Railway Association of Canada.

“The safety of our operations and of the communities through which we transport energy products is of the utmost importance,” said Patricia Reilly, a senior vice president at AAR, in a statement. “The rail industry is continuously learning and making improvements along the way so that what we move and where we move is as safe as possible. That’s why in light of the increased amount of crude oil and other flammable liquids moving by rail, we implemented enhanced operating procedures -- including steps such as lower speed limits and train securement rules.”

Rail companies should do more and reroute oil traffic away from urban areas, said Fred Millar, an environmental consultant in Arlington, Virginia, and former director of nuclear and hazardous materials transportation at Washington-based Friends of the Earth.

“Right now the railroads are in a situation where they can send a transcontinental tide of crude oil from northern Alberta and North Dakota across the whole continent and they can go through every single North American Great Lakes city,” he said. “And there’s not a national government that can say ‘boo’ about putting an enormous number of people unnecessarily at risk.”




http://www.bloomberg.com/news/2014-01-09/crude-derailment-risk-rises-as-trains-haul-more-oil.html

 

[trysail]

Canadians very rightfully ask how Congress can continue to allow the President to favor ongoing imports of heavy Venezuelan crude over stable, more reliable bitumen from Alberta.


Why are we thumbing our nose at our best ally? It is insane and a perfect example of why the U.S. is increasingly viewed as a vacillating and untrustworthy partner.

 

[trysail]

http://www.bloomberg.com/news/2014-01-23/recrod-grain-crop-stuck-on-prairie-as-railways-tap-oil.html

This clusterfuck is just one example of what the climate dumbfucks have done to the economies of Canada and the U.S.



​

Record Grain Crop Stuck on Prairie as Railways Tap Oil
By Jen Skerritt
January 23, 2014

Rising shipments of crude oil by train are tying up railway resources in Canada, leaving as much as 3 million tons of grain stuck on the Prairie after a record wheat and canola harvest.

Grain shipments to export terminals are two months behind due to a shortfall of rail cars, said Keith Bruch, vice president of operations for Paterson GlobalFoods Inc., a 106-year-old Winnipeg, Manitoba-based company with more than 30 grain elevators. Canadian National Railway Co. (CNR) and Canadian Pacific Railway Ltd. (CP) are hauling more oil while engines and crews are needed elsewhere to move grain, he said.

“It’s looking more and more that grain is becoming second choice to oil,” Bruch said in a Jan. 17 interview at his office in Winnipeg. “The railways make decisions on where they put their power and crews to maximize revenue.”

Canada’s two major railways are tapping into the growing demand for crude shipments amid pipeline bottlenecks and rising production in Alberta’s oil sands. Canadian railroads shipped 34 percent more cars of fuel oils and crude petroleum in October than a year earlier and more than twice the same month in 2011, Statistics Canada data show. Carloads of crude oil surged to 53,453 in 2012 from 143 in 2009, according to Transport Canada.

‘Upset Buyers’

Railroads can’t get enough grain cars to customers after wheat and canola production across the Canadian Prairies rose to a record. CP Rail reported a 19,934-car shortfall, according to a January service report to Paterson GlobalFoods. Outstanding grain-car orders for CN Rail totaled 17,726, according to a Jan. 17 report posted on its website.

That means there are probably more than 3 million tons (2.7 million metric tons) of grain waiting to move from Prairie elevators and farms, because each car holds about 90 tons, Bruch said. “There are a lot of very upset buyers,” he said.

Allocating rail resources for grain and oil can take months of planning to ensure crews and locomotives are ready, said Mark Hemmes, president of Edmonton-based Quorum Corp., which monitors grain transportation in Canada. A surge in weekly orders for one cargo type can leave railroads struggling to respond, he said.

If demand suddenly goes to 6,000 cars, “what do they do?” Hemmes said in a telephone interview. “It’s not like a thermostat on the wall where they can just crank it up.”

Railroads Respond

CP is moving record volumes of Canadian grain during an extraordinary crop season, Ed Greenberg, a spokesman for Calgary-based Canadian Pacific, said yesterday by e-mail.

“Grain is Canadian Pacific’s single largest commodity and therefore very important to our railway,” Greenberg said. “We are responding to our grain customers as efficiently and quickly as possible.”

Crude oil constitutes a very small portion of Canadian National’s business and accounted for less than 2 percent of the carrier’s freight-car loadings, Mark Hallman, a spokesman, said by e-mail.

Grain-car orders jumped in mid-September as the Prairie harvest came in, and Montreal-based Canadian National performed well until recent severe weather, Hallman said. Grain-car placement in Western Canada rose to a record and is 12 percent higher than the five-year average, he said. CN will improve weekly car-spotting performance as the cold ease, and plans to deliver 4,000 cars at country elevators this week, Hallman said.

“The notion that crude oil is displacing grain on CN’s network has absolutely no merit,” Hallman said. “CN’s network has ample capacity to move current traffic volumes, including grain.”

Ships Waiting

Patterson’s Bruch said delays are costing grain companies money. Ships have been idling as long as six weeks in Vancouver waiting for grain, a cost of C$12,000 ($11,000) to C$20,000 a day. Canada-based grain companies have been charged more than C$20 million in fees for delays at the port of Vancouver since August, according to the Western Grain Elevator Association, whose members include Glencore Xstrata Plc’s Viterra unit and Cargill Ltd.

“Moving crude by rail has definitely impacted our ability to supply our facilities,” Sam Snyder, director of corporate development for Grain Millers Inc., a Minneapolis-based processor that ships cereal grains from Canada to Iowa, Oregon and Wisconsin, said in a telephone interview.

Shares Rise

Canadian Pacific rose 50 percent in the 12 months ended yesterday and Canadian National climbed 27 percent, beating the 9.1 percent gain in the Standard & Poor’s/TSX Composite index. CN’s return on equity of 22.6 percent is the highest of its six North American peers, according to data compiled by Bloomberg.

While railroads have played down crude’s role in recent service disruptions, oil is probably a significant contributor to shippers’ inability to move grain, Snyder said. The carriers are responding to market demand for oil, and it’s difficult to tell whether this is a “blip or the new standard,” he said.

Canadian National’s third-quarter crude shipments ran at an annualized pace of about 70,000 carloads, Chief Marketing Officer Jean-Jacques Ruest said on a conference call Oct. 22. The 2010 tally was 216, the railroad said its 2013 fact book for investors.

Revenue from petroleum and chemicals rose 17 percent to C$485 million in the three months that ended Sept. 30, while grains and fertilizer revenue fell 3 percent to C$357 million, according to the company.

Grains, Fertilizer

At Canadian Pacific, the industrial-goods category that includes oil showed a 10 percent increase in carloads to 386,000 in 2013’s first nine months, according to an Oct. 23 filing. Grain carloads rose 2 percent to 317,000 in the period, the latest for which figures are available.

Revenue from industrial and consumer products, the segment that includes oil, rose 17 percent to C$384 million in the third quarter, more than twice the 8 percent growth in grain revenue to C$319 million, Canadian Pacific reported.

Canada plans to spend more than C$1.5 million to reduce port and rail delays and open new domestic and international markets, Agriculture Minister Gerry Ritz said at a Jan. 21 press conference in Winnipeg. Orders for 40,000 grain cars have yet to be filled and industry groups are discussing whether it’s possible to catch up, he said.

“We’ve given the railways a bit of homework over the next couple of weeks to come up with a plan as to how they address this,” Ritz said. “I’m not interested in how many cars they allocate. I’m interested in how many actually get to port.”

Seed, Elevators

North American rail congestion is affecting delivery of seed from the Canadian Prairies and North Dakota, Legumex Walker Inc. Chief Executive Officer Joel Horn said in a Jan. 15 statement. The Winnipeg-based company said it agreed to a six-month contract to deliver some canola oil by truck to a biofuel company in Washington state.

Farmers are getting paid less due to the risk that companies may incur penalties if they can’t deliver grain by rail on time, said Blair Rutter, executive director of Western Canadian Wheat Growers, which represents Prairie farmers. Some farmers unable to deliver to backlogged elevators are storing grain on the ground because storage bins are full, he said.

Curtis McRae will probably have to keep 30,000 bushels of wheat and 30,000 bushels of canola on his 5,000-acre farm in St. Andrews, Manitoba, until the next harvest because of the gridlock. One local elevator isn’t taking grain while awaiting 600 railcars to move the crop that’s already on hand, he said.

“Elevators have no interest in buying our grain right now,” McRae said yesterday by telephone. “They’d rather it sit in my yard than their yard.”




http://www.bloomberg.com/news/2014-01-23/recrod-grain-crop-stuck-on-prairie-as-railways-tap-oil.html

 

[thør]

http://fuelfix.com/wp-content/blogs.dir/731/files/2014/01/iCbfnYy7rZrQ-306x172.jpg

Exxon is building a rail terminal in Alberta.

 

[trysail]

http://www.bloomberg.com/news/2014-...-said-likely-to-disappoint-pipeline-foes.html




Keystone XL Won’t Worsen Climate Change, U.S. Says

By Jim Snyder, Mark Drajem and Jim Efstathiou Jr.
January 31, 2014

The proposed Keystone XL pipeline cleared a key hurdle today with a government study that found its impact on the climate would be minimal, which supporters said meets President Barack Obama’s test for allowing the project to be built.

In its final environmental review, the U.S. State Department found the Canada-U.S. oil pipeline would not greatly increase carbon emissions because the oil sands in Alberta will be developed anyway.

The study, while not the final word, is important because Obama has said he wouldn’t approve Keystone if it would exacerbate carbon pollution. Now the pipeline’s fate comes down to broader questions about whether the project is in the U.S. national interest, weighing matters such as energy needs and diplomatic relations.

“We are one step closer toward approval of the Keystone XL pipeline,” Senator Heidi Heitkamp, a North Dakota Democrat and pipeline supporter, said in a statement. “Not only is it unacceptable, but it’s embarrassing that we cannot approve a pipeline application in the time it took us to fight World War II.”

TransCanada Corp. applied more than five years ago for a permit to build the pipeline through the U.S. heartland, connecting the oil sands with refineries along the coast of Texas and Louisiana. It’s planned 830,000-barrel-a-day capacity would represent a fraction of U.S. oil imports, though the $5.4 billion project has spawned a multimillion-dollar lobbying fight and is forcing Obama to choose between angering an ally in Canada or his supporters in the environmental movement.

Transport Projects

White House press secretary Jay Carney said the Supplemental Environmental Impact Statement is “another step in the process” and declined to say today when Obama will make his final determination. The State Department said it would accept public comments for 30 days. Other federal agencies will have 90 days to weigh in.

“This is a status quo report,” Michael Levi, a fellow at the Council on Foreign Relations in New York, an independent research organization, said in a phone interview. “There is nothing in this report that’s going to lead to anyone’s re-evaluation of the project one way or the other.”

Construction Jobs

Supporters have said the pipeline would create thousands of construction jobs and boost the nation’s energy security. The project would directly or indirectly support about 42,100 jobs during construction for a year or two, and add $3.4 billion to the U.S. economy, the report says.

“This final review puts to rest any credible concerns about the pipeline’s potential negative impact on the environment...”

...While today’s report deviated from a March draft in some ways, the revisions aren’t as sweeping as opponents had sought.

“The approval or denial of any given project is unlikely to significantly affect the extraction of oil sands or refining on the U.S. Gulf Coast,” Assistant Secretary of State Kerri-Ann Jones said today in a conference call with reporters about the study.

The agency also deepened its analysis of market forces that may impact future development of Canada’s oil sands crude. Still, the department endorsed its earlier finding that the rejection of any single project to deliver Canadian oil won’t significantly impact the rate of development of oil sands crude or the refining of heavy crude on the U.S. Gulf Coast, according to the department officials...

...The report puts pressure on Obama to approve the pipeline, said Nebraska Republican Representative Lee Terry, who has sponsored legislation to automatically approve the pipeline.

‘Negligible Impact’

“It’s been obvious that it has negligible impact” on the environment, he said in a phone interview from Nebraska. “The president has now no reason to kill the Keystone pipeline.”

TransCanada proposed building a 875-mile pipeline from the U.S.-Canada border to Steele City, Nebraska. From there it would connect to an existing pipeline network, linking the oil sands with Gulf Coast refineries. It will be able to carry 830,000 barrels of oil a day if operating at full capacity...




http://www.bloomberg.com/news/2014-...-said-likely-to-disappoint-pipeline-foes.html

 

[badbabysitter]

Yes,, the envvronmental damage won't happen in America.. therefore the envirornmental damage won't happen

jesus christ... no wonder you're called tryfail

 

[badbabysitter]

it's amazing tryfail hasnt mentioned the 6 major oil spills in the last 2 years inAlberta from "unspillable" pipe lines..or the train explosion which took a quarter of a town with it... in a completely " safe" container

 

[trysail]

"Fifteen thousand pages of scientific and technical study published in four environmental analysis reports
since 2010 have all concluded this project would have minimal impact on the environment."​

The very fact that this pipeline's application has been in limbo for five years provides an object lesson in one of the reasons the U.S. economy is struggling.



How many thousands are unemployed because obstructionist extremists have used government as a tool to frustrate productive activities ?

 

[4est_4est_Gump]

This is why Warren Buffet went heavily into rail some time back.


I would not be surprised to find that he is funding some of the opposition to the pipeline out of his profits.

 

[trysail]

http://www.npr.org/assets/multimedia/2014/01/ND/flare.gif


​

Seems wasteful.

It is. That's what happens when it takes five (5) years (and counting) to get a pipeline approved.


​

 

[Dazzle1]

All this angst over 35 full-time jobs.

add 3 Zeroes to your number and thats just direct jobs.

 

[trysail]

http://www.npr.org/2014/02/21/28052...es-position-now-supports-keystone-xl-pipeline

Scientist Switches Position, Now Supports Keystone XL Pipeline
February 21, 2014

NPR Morning Edition

Opponents of the Keystone XL Pipeline lost an ally. David Greene talks to Marcia McNutt, one of the country's most influential scientists, about her decision to no longer oppose the pipeline.



http://www.npr.org/2014/02/21/28052...es-position-now-supports-keystone-xl-pipeline


DAVID GREENE, HOST:

And I'm David Greene. Good morning.

Environmental groups have poured a lot of money and energy into stopping the Keystone XL pipeline. The Obama administration has been in a long vetting process over whether to approve this project. The pipeline would carry carbon-rich oil several thousand miles from the tar sand fields of Canada South. Many environmentalists see this fight as an important test of whether the U.S. is committed to controlling carbon emissions.

And one of America's most influential scientists, Science magazine editor-in-chief, Marcia McNutt was initially on their side. She agreed that the pipeline was a bad idea.

MARCIA MCNUTT: From what I knew of the Canadian tar sands, they were a rather large emitter of CO2 compared to alternatives. And the original routing went through some fairly sensitive areas, such as breeding ground of the Sandhill Cranes.

GREENE: But Marcia McNutt has now changed her mind. It's a potential blow to environmental groups. In a Science magazine she writes that she now supports the Keystone pipeline. We asked her why she changed course.

MCNUTT: Just because there hasn't been a pipeline really did not stop the development of the Canadian tar sands.

GREENE: They were going to be developed anyway, you're saying.

MCNUTT: Yeah. In fact, they are developed anyway. Rather than putting the oil in a pipeline, they are now putting the oil on trucks and railway cars and trucks and trains actually use more fossil fuels themselves to get that crude oil to market than a pipeline.

GREENE: OK. So one message to environmentalists is that this is going to happen anyway and that doing it in pipeline might be the cleanest of the options.

MCNUTT: Not only the cleanest, but potentially safer because the pipeline is still to be permitted, environmentalists can demand the pipeline be the safest ever engineered. One of the reasons for opposing the pipeline is the emissions of greenhouse gases when the tar sands are converted to a liquid to put into the pipeline. There actually could be some concessions in exchange for approving the pipeline that could require a limit on the carbon emissions in that process.

GREENE: What about the argument from environmentalists that if you build this pipeline that guarantees that this fossil fuel is going to be taken from the ground and transported and, you know, sold for many, many, many years to come?

MCNUTT: I don't see any argument that tells me that not building the pipeline guarantees that it won't.

GREENE: I wonder, I mean this is a big battle for environmentalists. And they feel like they are in a philosophical debate about the direction of this country when it comes to energy policy. You know, what do you say to them to convince them that this is a moment to back down?

MCNUTT: Well, I'm totally sympathetic to the argument. On the other hand, I'm also a pragmatist. We need to find a funding source that allows us to invest more aggressively in solar, wind, and other non-CO2 polluting sources. Now, if you look at the cost of transporting oil in a pipeline, it is the very cheapest way to do it. If one can identify a revenue stream that would come from all of the money saved and convert that money then to a renewable energy fund that sets us on that right path, then I think the nation really wins.

GREENE: Do you think environmentalists would be open to hearing that message?

MCNUTT: I think some would. I hope many would. I think in a time of austerity in this country, why not make the polluting technology our funding source for the future?

GREENE: Marcia McNutt, thank you so much for joining us to talk about this. It's been a real pleasure. We appreciate it.

MCNUTT: Thank you, David. It's been a pleasure talking to you too.

1jy-8atq-by9p

http://www.regulations.gov

 

[trysail]

Nobody likes spills. Nobody likes accidents.

The insanity of those opposing the Keystone XL pipeline is that the obstructionists are actually CAUSING spills and accidents.



​

http://www.bloomberg.com/news/2014-02-25/mississippi-oil-spill-highlights-risk-of-u-s-oil-boom.html





Mississippi Oil Spill Highlights Risk of U.S. Oil Boom

By Brian Wingfield
February 25, 2014

A barge crash that spilled enough oil to temporarily shut a stretch of the Mississippi River highlights the transportation risks of the U.S. energy boom just as regulators respond to several rail accidents involving crude.

A 65-mile portion of the river about 50 miles (80 kilometers) upstream from New Orleans reopened with restrictions yesterday as federal and state officials responded to a Feb. 22 spill, which stalled shipments of goods including grain and chemicals on the nation’s busiest waterway.

“We’re facing the imminent risk of a barge disaster or a rail disaster” as more oil is shipped to the Gulf of Mexico for refining, Jonathan Henderson, a spokesman for the New Orleans-based Gulf Restoration Network, said by phone after attending a meeting with U.S. Coast Guard officials.

A surge in U.S. oil production, reflecting in part advances in drilling techniques, has unlocked millions of barrels of oil from geologic formations such as North Dakota’s Bakken shale, reducing U.S. reliance on imports. It has also ignited a debate over how to safely get the oil to refineries after a series of rail accidents involving oil tank cars, including a July derailment that killed 47 in a Quebec city.

Backers of TransCanada Corp.’s proposed Keystone XL project from Alberta to the U.S. Gulf Coast have said expanding pipeline capacity would be the safest means to transport crude.

Shipments Rise

Barge and tanker shipments of crude from the Midwest to the Gulf Coast jumped from virtually nothing in 2005 to 21.5 million barrels in 2012, according to the U.S. Energy Information Administration. The U.S. Gulf received a record 4.9 million barrels of crude from the Midwest in October.

“We’re shipping four times more crude oil than we used to, and we haven’t seen a fourfold rise in incidents,” Brigham McCown, a former director of the U.S. Pipeline and Hazardous Materials Safety Administration under President George W. Bush, said in a phone interview. “We need all modes of transportation” for crude shipments, he said.

A barge carrying light crude, like the type produced in the Bakken Shale, collided Feb. 22 with a tugboat on the river near Vacherie, Louisiana, about 50 miles from New Orleans, according to the U.S. Coast Guard. Photos from the incident show a gaping hole in the side of the barge.

About 31,500 gallons -- or 750 barrels -- spilled into the river, and so far, 1,021 gallons of oil and water have been recovered, Petty Officer Matthew Schofield, a Coast Guard spokesman, said in a phone interview. He said he didn’t have details on the total amount of crude the barge was carrying, or where it originated.

Coast Guard

The Coast Guard said 29 vessels were backed up along the river during the shutdown.

Anne McCulloch, a spokeswoman for the American Waterways Operators, an Arlington, Virginia-based industry group, said in an e-mail yesterday that its members, which include tugboat and barge operators, are working with government agencies to that river commerce can proceed safely and efficiently.

“Water transportation is the safest, most efficient means of transporting many essential commodities, including petroleum products,” McCulloch said.

She said the growth in barge shipments has not led to an increase in spills. In fact, she said, “we have seen an increase in the amount of oil carried on the water and a dramatic decrease in the amount of oil spills.”

Keystone Pipeline

The Louisiana spill takes place amid debate over the Keystone XL pipeline, a $5.4 billion project that would ship crude from oil sands in Western Canada to the Gulf Coast for refining. Supporters, including the American Petroleum Institute, an industry group for producers including Exxon Mobil Corp. of Irving, Texas, and Chevron Corp. of San Ramon, California, have said the conduit will support thousands of jobs and move oil safely.

Sabrina Fang, an API spokeswoman, declined to comment on the Louisiana spill.

With the boom in U.S. oil production, the industry is increasingly relying on rail and barge shipments to get the crude to refineries. Oil shipments by train have jumped 400 percent since 2005, according to the Association of American Railroads.

States including California, New York and Maine are drafting emergency response plans after oil-train derailments, including the fatal crash in Quebec and a December explosion of 400,000 gallons of crude on a BNSF Railway Co. train in North Dakota.

Eddie Scher, a spokesman for the San Francisco-based Sierra Club, said oil companies need to be more careful in handling and shipping their product. Disasters including the 2010 Gulf of Mexico oil spill are “not acts of God,” he said in a phone interview. “In every case, they’re companies cutting corners.”




http://www.bloomberg.com/news/2014-02-25/mississippi-oil-spill-highlights-risk-of-u-s-oil-boom.html

 

[trysail]

“With Obama saying no to Canada or what amounts to a no,
the lesson is that we cannot rely anymore on the United
States for our economic well-being,” said Allan Gotlieb,
former deputy minister of foreign affairs and Ambassador
to Washington during the free trade talks. “Not getting
the oil sands out will cost many billions of dollars of lost
economic opportunity for Canada. We are at an historic
turning point in this special relationship.”



​

 

[thør]

REFILE-U.S. corrects Keystone study estimate of rail deaths, other errors

"The U.S. State Department on Friday corrected several errors it made in a key study evaluating the impact of the proposed Keystone XL pipeline, including an understatement of how many people could be killed on railroad tracks if the project were rejected and oil traffic by rail increased."

 

[trysail]

In the end, the delusional idiots who have opposed the Keystone XL pipeline will have accomplished absolutely nothing other than to earn the eternal enmity of anybody in the U.S. with a brain.




​

http://www.bloomberg.com/news/2014-...ove-enbridge-s-northern-gateway-pipeline.html



Canada Approves Enbridge’s Northern Gateway Pipeline
By Jeremy van Loon and Andrew Mayeda
June 17, 2014

The Canadian government approved Enbridge Inc.’s Northern Gateway pipeline, eliminating the final major regulatory obstacle for the conduit that would move Alberta oil to the Pacific coast for shipment to Asia.

The approval of the C$6.5 billion ($6 billion) project by Prime Minister Stephen Harper’s cabinet is subject to Enbridge satisfying the 209 conditions placed on the proposal by a regulatory review panel in December, Natural Resources Minister Greg Rickford said in a statement.

Canada’s petroleum producers are seeking ways to get land-locked and price-depressed Alberta crude to world markets, especially after delays to TransCanada Corp.’s proposed Keystone XL pipeline. Harper’s government has made building energy infrastructure a national priority, part of C$650 billion of investment in more than 600 existing or planned projects over the next decade to develop the country’s natural resources, including the world’s third-largest pool of recoverable crude reserves.

“The proponent clearly has more work to do in order to fulfill the public commitment it has made to engage with Aboriginal groups and local communities along the route,” Rickford said in the statement.

Crude producers such as Canadian Natural Resources Ltd. and Cenovus Energy Inc., facing a five-year average discount of almost $20 a barrel for their oil relative to U.S. benchmarks, are seeking new markets. Canadian oil-sands output is set to more than double to 4.1 million barrels a day by 2025 from 2013, according to the Canadian Association of Petroleum Producers, an industry group.

Opposition Remains

While the federal government’s endorsement is the last major federal regulatory hurdle for a project first proposed a decade ago, the pipeline still faces opposition from environmental and aboriginal groups who have promised to delay its construction. The province of British Columbia, which controls local permits, has also set five conditions that include financial benefits and environmental protection before signing off on the pipeline.

The 1,177-kilometer (731-mile) conduit would start in the eastern Alberta plains at Bruderheim, about 35 miles northeast of Edmonton, and cross the Rocky and Coast mountain ranges to the Pacific port of Kitimat, British Columbia, carrying as much as 525,000 barrels a day of diluted bitumen. From there, the fuel would be loaded onto tankers and shipped through the Douglas Channel, a passage that narrows to less than a kilometer.

Along with recommending approval of Northern Gateway in December, a regulatory panel imposed 209 conditions, which Chief Executive Officer Al Monaco said required Enbridge to recalculate the cost of the project. The Calgary-based company hasn’t provided a timeline for when the new estimates will be made public.

Regulator Conditions

Under the regulator’s conditions, Enbridge must have liability coverage of C$950 million and lead research efforts on heavy-oil spills in marine and freshwater environments. Other conditions include building extra oil storage facilities at Kitimat and establishing an emergency-response plan with the ability to handle a spill of about 230,000 barrels, more than three times the legal requirement.

Aboriginal groups, including the Yinka Dene Alliance, have threatened legal action to stop the pipeline or delay its construction. Opponents fear an oil spill would destroy their fisheries and shellfish beds. Some environmental and aboriginal groups have already filed lawsuits in federal courts seeking review of the regulator’s recommendations.

Harper’s government has introduced regulatory changes, added safety regimes for pipelines and marine-oil tankers and stepped up engagement with aboriginals in an effort to bolster public support for the development of energy infrastructure.

Minority Support

Still, only a minority of British Columbians wanted Harper’s government to approve the project. Thirty-four percent of residents said they want it blocked, while 33 percent want it delayed for further review, according to a Bloomberg-Nanos poll published on June 3. Twenty-nine percent say they wanted Northern Gateway approved, according to the poll.

The poll also showed fears of an oil spill are top of mind. Thirty-six percent of respondents said the idea that the pipeline might lead to a spill best represented their view. Next was the perspective that the project will create jobs in the province, at 25 percent. Only 15 percent said the idea that the pipeline will contribute to climate change best represented their viewpoint.

Forty-seven percent of respondents said they’d be less likely to vote for Harper’s Conservative Party if the government approves the project, including 19 percent of those who said they supported Harper in the 2011 elections.

Five Conditions

British Columbia Premier Christy Clark’s five conditions for backing the project include being financially compensated for accepting the risks associated with spills. In November, British Columbia and Alberta signed a framework deal that sets the ground rules for development of pipeline projects in the nation’s westernmost province.

Northern Gateway is one of C$36 billion worth of commercially secured projects that Enbridge, Canada’s largest pipeline company, is developing through 2017, including reversing an oil pipeline to carry crude to refineries in Quebec. The company expects earnings per share to grow 10 percent to 12 percent through 2017.

While crude producers say pipelines would ease transportation bottlenecks that have suppressed the price of Canadian heavy oil, efforts to build energy infrastructure have run into opposition both at home and in the U.S.

President Barack Obama said in April he was delaying a decision on the Keystone project because of a court battle in Nebraska, extending a review now in its sixth year.



http://www.bloomberg.com/news/2014-...ove-enbridge-s-northern-gateway-pipeline.html

 

[trysail]

http://www.bloomberg.com/news/2014-10-08/keystone-be-darned-canada-finds-oil-route-around-obama.html



Keystone Be Darned: Canada Finds Oil Route Around Obama
October 7, 2014
By Rebecca Penty, Hugo Miller, Andrew Mayeda and Edward Greenspon

So you’re the Canadian oil industry and you do what you think is a great thing by developing a mother lode of heavy crude beneath the forests and muskeg of northern Alberta. The plan is to send it clear to refineries on the U.S. Gulf Coast via a pipeline called Keystone XL. Just a few years back, America desperately wanted that oil.

Then one day the politics get sticky. In Nebraska, farmers don’t want the pipeline running through their fields or over their water source. U.S. environmentalists invoke global warming in protesting the project. President Barack Obama keeps siding with them, delaying and delaying approval. From the Canadian perspective, Keystone has become a tractor mired in an interminably muddy field.

In this period of national gloom comes an idea -- a crazy-sounding notion, or maybe, actually, an epiphany. How about an all-Canadian route to liberate that oil sands crude from Alberta’s isolation and America’s fickleness? Canada’s own environmental and aboriginal politics are holding up a shorter and cheaper pipeline to the Pacific that would supply a shipping portal to oil-thirsty Asia.

Instead, go east, all the way to the Atlantic.

Thus was born Energy East, an improbable pipeline that its backers say has a high probability of being built. It will cost C$12 billion ($10.7 billion) and could be up and running by 2018. Its 4,600-kilometer (2,858-mile) path, taking advantage of a vast length of existing and underused natural gas pipeline, would wend through six provinces and four time zones. It would be Keystone on steroids, more than twice as long and carrying a third more crude.

Supertanker Access

Its end point, a refinery in the blue-collar city of Saint John, New Brunswick, operated by a reclusive Canadian billionaire family, would give Canada’s oil-sands crude supertanker access to the same Louisiana and Texas refineries Keystone was meant to supply.

As well, Vladimir Putin’s provocations in Ukraine are spurring interest in that oil from Europe and, strange as it seems, Saint John provides among the fastest shipping times to India of any oil port in North America. Indian companies, having already sampled this crude, are interested in more. That means oil-sands production for the first time would trade in more than dribs and drabs on the international markets. With the U.S. virtually its only buyer, the captive Canadians are subject to price discounts of as much as $43 a barrel that cost Canada $20 billion a year.

And if you’re a fed-up Canadian, like Prime Minister Stephen Harper, there’s a bonus: Obama can’t do a single thing about it.

Done Deal

“The best way to get Keystone XL built is to make it irrelevant,” said Frank McKenna, who served three terms as premier of New Brunswick and was ambassador to the U.S. before becoming a banker.

So confident is TransCanada Corp., the chief backer of both Keystone and Energy East, of success that Alex Pourbaix, the executive in charge, spoke of the cross-Canada line as virtually a done deal.

“With one project,” Energy East will give Alberta’s oil sands not only an outlet to “eastern Canadian markets but to global markets,” said Pourbaix. “And we’ve done so at scale, with a 1.1 million barrel per day pipeline, which will go a long way to removing the specter of those big differentials for many years to come.”

The project still faces political hurdles. U.S. and international greens who hate Keystone may not like this any better. In Quebec, where most new construction will occur, a homegrown environmental movement is already asking tough questions.

Special Relationship

Still, if this end run around the Keystone holdup comes to fruition, it would give a lift to Canadian oil and government interests who feel they’re being played by Obama as he sweeps aside a long understood “special relationship” between the world’s two biggest trading partners to score political points with environmental supporters at home.

It will also prove a blow to the environmentalists who have made central to the anti-Keystone arguments the concept that if Keystone can be stopped, most of that polluting heavy crude will stay in the ground. “It’s always been clear that denying it or slowing Keystone wasn’t going to stop the flow of Canadian oil,” said Michael Levi, senior fellow for energy and environment at the Council on Foreign Relations.

Keystone Delays

This Canada-only idea surfaced in the days after Obama’s surprise Nov. 10, 2011, phone call informing Prime Minister Harper that Keystone was on hold. Harper, who had vowed to turn his nation into an energy superpower, responded with a two-track strategy: Get in Obama’s face on Keystone and identify other ways out for Canada’s land-locked oil sands, which, at 168 billion proven barrels, contain the third-largest reserves in the world.

Keystone remains bogged down, awaiting the outcome of litigation in Nebraska. Last year, Obama gave a speech at Georgetown University and said he wouldn’t approve Keystone if it would significantly exacerbate carbon dioxide emissions.

The pipeline to the Pacific, known as Northern Gateway, looks increasingly iffy due to opposition from aboriginal groups.

TransCanada is thus expected to file an application to build Energy East with Canada’s National Energy Board in the coming days, according to people familiar with the plan. Approval may come in early 2016. “This is almost certainly the most important project TransCanada has right now in our portfolio,” said Pourbaix.

Culture Shift

While Republicans continue to make Keystone approval an issue of the mid-term congressional elections, its fate has become less fraught for Canadians. Make no mistake –- they still want it approved under the theory that oil sands reserves are so vast that it will require multiple large pipelines to develop them properly. In the interim, they have already begun to deploy alternatives to get Alberta oil to market, moving 160,000 barrels a day to the U.S. by rail.

Reflecting this new post-Keystone mood, Harper told a British business audience in September that the U.S. “is unlikely to be a fast-growing economy for many years to come” and after a hundred years of trying to maximize exports south, it’s time for “a real shift in the mindset of Canadian business culture.”

Which is what Energy East represents. Yet before it emerged as a standard bearer of this shift, it had to survive a rough gestation. Harper himself was slow to warm to it. Others declared it “stranger than science fiction.”

And then there were the mutual suspicions of the oil producers of the west and the refiners of the east to overcome. The inside story of how this developed into an unusually broad political consensus was put together after interviews with more than 50 industry and government executives who have been in and around the often tense negotiations.

No History

One initial difficulty: The Calgary-based oil patch and New Brunswick’s Irving Oil Ltd., operators of Canada’s largest refinery and 900 service stations in eastern Canada and New England, had virtually no history with each other. Alberta oil had never flowed farther than Montreal. They were petroleum potentates operating in separate spheres who might as well have been in separate countries.

The Calgary crowd had a lot to learn about the Irvings. Besides extensive Canadian holdings ranging from timber to tissues and shipbuilding to radio stations, this clan of aw-shucks billionaires from the poorest region of the country supplies 60 percent of the gasoline in the greater Boston area. They are the fifth-largest private landholder in the U.S., with tracts sufficient to cover four-fifths of Delaware. Their fortune has been calculated by Bloomberg News at more than $10 billion.

Falling Out

For Arthur Irving, who gained control of the family oil assets after a falling out among his brothers a few years earlier, word that an eastward pipeline was afoot was a godsend. It held out the promise of a career-capping crowning achievement, not to mention long-term profits -– if only the oil executives from the west saw it his way.

They didn’t. Arthur Irving and his company had quickly sown discord in Calgary with their steadfast resistance to commit to take a set number of barrels from Energy East, according to people with knowledge of the controversy. As far as the oil producers could discern, Arthur wanted the option to take crude at will, as he had done for years in picking the most favorable sources of foreign oil at a given moment. Before they would entertain a decades-long arrangement, the producers insisted Irving would have to put skin in the game.

Even more critical was the terminal, from where much of the pipeline capacity would be exported. The Irvings dominated traffic in and out of the port of Saint John. The Calgary producers bristled that Irving was demanding too much money for putting their crude “the last mile” through his sprawling facility.

More Sway

The oil drillers also worried that Irving Oil, situated alone at the end of the line, would hold too much sway over them. They wanted more than a single outlet. Many preferred stopping the line in Quebec and exporting on smaller ships from there, cutting Irving Oil out altogether, or at least reducing its leverage.

According to people close to the talks who aren’t authorized to speak, Arthur Irving, in turn, was livid that TransCanada, in a bid to pacify the producers, was weighing an export terminal of its own -- right on his home turf. The Irvings depended on the port like no other, loading and unloading about 400 ships a year. Arthur couldn’t stomach the idea of outsiders operating there.

It was in that frame of mind that on June 18, 2013, the then-82-year-old was in Toronto on business with Paul Browning, the new Irving Oil chief executive officer. His frustration burbling away, Irving decided he needed the assistance of one person.

Right Man

When they called that morning, Frank McKenna was at his desk at the Toronto-Dominion Bank headquarters. Irving and Browning hurried over. Irving had come to the right man. McKenna had staked first claim as the project’s philosophical father. On Nov. 28, 18 days after Obama’s call to Harper, McKenna -- stunned like many Canadians at the Keystone delay -- floated the notion of going east in an op-ed in the National Post newspaper. He liked the “nation building” politics of linking Alberta’s prosperity to Atlantic Canada’s potential. “The Keystone XL delay has shocked us,” he wrote. “Hopefully, it has also energized us.”

McKenna, vice chairman of TD, began working the phones. With six years under his belt at Canada’s largest bank and a board seat on one of Calgary’s most successful energy companies, he knew the inner workings of Alberta’s oil patch almost as well as his native New Brunswick. By evening, with advice gleaned from McKenna, Browning boarded a flight to Calgary on a mission to put things back on track.

Shale Boom

Just as Obama’s delays on Keystone was worrisome for the Canadians, so was America’s shale boom. Irving Oil’s CEO at the time of Energy East’s conception, Mike Ashar, and TransCanada’s Pourbaix could foresee the disruption pounding their businesses and had even discussed the concept of shipping oil east.

Pourbaix had come to appreciate that shale gas, by depressing prices, was discouraging new gas investment in Alberta while the Marcellus and Utica formations in Pennsylvania could compete to supply the lucrative Ontario market. Together, these developments would curtail usage of the company’s historic gas mainline from Alberta to Montreal -- an ambitious and controversial nation-building exercise of its own in the late 1950s.

Growth Projections

Energy East offered potential salvation by converting that gas line -- which would comprise two-thirds of the route -- to take advantage of “the incredible growth projections” for the oil sands, said Pourbaix. “Even with Keystone, even with Gateway, it was becoming quite clear that producers probably needed another way to get their oil to market.”

On the other end of the country, Irving Oil fretted that its refinery was starting to be elbowed out by U.S. Midwest and Gulf Coast competitors. Long accustomed to picking and choosing among imported crudes, it now watched as rivals profited from access to cheaper shale and oil sands production from the interior of the continent.

“We went from being an advantaged refiner from a crude supply point of view to being disadvantaged,” Browning, who succeeded Ashar, said in an interview in August. (Two weeks after that interview, he would, without explanation, depart the company after only 16 months on the job.)

The Irvings had a lot on the line. Their empire dated to 1924, when K.C. Irving began building out from the foundation of his father’s general store in Bouctouche, New Brunswick. Soon, he operated filling stations and car dealerships and snapped up timber lands and shipbuilding yards.

Chevron Partner

In 1960, he opened a refinery on the Saint John waterfront in a partnership with Standard Oil Co. of California, a predecessor of Chevron Corp. The Irvings took full ownership of the facility in 1988, investing heavily over the years in expanded capacity and state-of-the-art technology.

In 2000, Arthur handed the controls to his son Kenneth, a 17-year veteran of Irving Oil. Kenneth, now 53, built a liquefied natural gas import terminal on the Saint John waterfront with Repsol SA and announced plans in 2006 for a second refinery, with BP Plc coming aboard as a partner in the C$8 billion project.

After the recession hit in 2008, the Irving world changed radically. The brothers fell out and divvied up the family assets, the refinery expansion was shelved and, in 2010, Kenneth took stress leave and checked into a Boston hospital, people close to the family said.

Strong Patriach

In short order, he was banished from Irving Oil and deprived of contact with the father he worshipped, ending up, according to documents on file in the Supreme Court of Bermuda, on the losing end of a Shakespearean court fight in which he sought a greater share of the Irving trust. Chief Justice Ian Kawaley described it as a battle between “a strong patriarch and an equally strong-willed son...infused with deep-seated emotions of an intensity rarely seen outside of familial relationships.”

Kenneth Irving didn’t comment for this story and Arthur Irving declined an in-person request for an interview and didn’t respond to follow-up calls and an e-mail.

Negotiations with Arthur Irving were bound to be interesting. He was a man known for his idiosyncrasies. Finding something inappropriate about FM radios, he agitated to have them removed from company vehicles, said a person familiar with the company. He constantly griped about a convenience-store chain operating out of Irving service stations because he believed the chain didn’t clean bathrooms to Irving standards.

Moon Shot

With his son in exile, Arthur promoted Ashar, previously recruited by Kenneth from industry stalwart Suncor Energy Inc., as CEO. Ashar’s bona fides in Calgary made him the perfect guy to advocate for an eastern pipeline.

It’s almost 5,000 highway kilometers from the eastern edge of Alberta to the western edge of New Brunswick and as far as many Albertans were concerned, it might as well be the distance to the moon, so little was their knowledge. Ashar set about educating them.

He promoted Saint John’s deep-water, ice-free port, Irving Oil’s long experience in handling huge volumes of crude coming into the country and the fact any energy project in Saint John could make use of environmental permits left over from the scrubbed refinery.

India Link

And there was yet something else, once again counter-intuitive. Saint John was closer in shipping days than Vancouver to India’s refinery row, where incipient interest was being expressed about Alberta’s oil. When challenged at one meeting in Calgary, New Brunswick Energy Minister Craig Leonard pulled out a map to prove the point. Harper’s own Natural Resources Minister at the time, Joe Oliver, was still dubious and ordered his officials to check for themselves before he would believe it.

The Indians turned out to be better informed than the Albertans. When various Canadian cabinet ministers visited Indian oil companies such as Reliance Industries Inc. and Indian Oil Corp. they were astounded by the depth of knowledge about Energy East, including its shipping advantages, according to those who were there.

At one such meeting, a Reliance executive assured the Canadians his refinery could handle Alberta’s tarry bitumen. How could he be so sure? The company had already procured a tanker of the stuff from a terminal in Burnaby, British Columbia, and ran it through the facility. Both Ashar and Browning have visited the Indian refiners and Indian Oil has since signed a letter of intent with an Alberta supplier, assuming Energy East will be built.

Jobless Rate

The politics were also lining up. Energy East would become the only major pipeline proposal to win the support of all of Canada’s major political parties.

The province of New Brunswick, though home to an anti-fracking movement, found economic reasons to back the project. Its unemployment rate, at almost 9 percent, runs chronically higher than most of the rest of Canada. Many breadwinners regularly commute across the country to work in the oil sands.

Former New Brunswick Premier David Alward -- voted out in elections last month in part because of his pro-fracking stance -- joined as an early and strong force in favor of Energy East and, with the help of McKenna, brought along his Liberal Party opponents. He understood firsthand the frustrations of those flying in and flying out of Alberta. His 24-year-old son, Ben, spends two of every three weeks working as a pipe fitter around the oil-sands hub of Fort McMurray.

High Fives

Alward, during an interview, spoke as a father when he said that while a job in the oil sands afforded his son an “incredible opportunity... we’ve got a little farm at home and his passion is here, it’s not in Alberta.” About 20,000 New Brunswick workers are in the same situation, he said. Once, on the way home from an Alberta trip promoting Energy East, Alward found himself getting high-fived in the aisle of the plane by a group of these itinerant workers excited the project could create jobs and allow them to go to work in the morning and home to their families at night.

Harper himself was initially non-committal on Energy East, eager for an alternative around Obama’s Keystone foot-dragging but uncertain that the project was technically and economically feasible. He didn’t want to put his prestige on the line if the oil patch and Irving couldn’t make it work.

Build Consensus

With eight of New Brunswick’s 10 seats in the House of Commons, Conservative Party members of parliament pushed him to get out front. Noel Kinsella, the speaker of the Senate and a Saint John native, hosted a meeting around the dining room table of his Ottawa chambers. The province’s Conservative Party contingent drafted a private March 22 letter to Harper urging “a proactive approach” that would “build a consensus with the governments in the six provinces the pipeline will span.”

Though not a man prone to cross-province consensus-building, Harper liked this turn of events. Before assuming office, he had critiqued what he labeled “a culture of defeat” in New Brunswick and Canada’s Atlantic region as a whole. Provinces there, he thought, were far too dependent on government programs. Suddenly, here was a market-based plan to generate economic activity that would benefit New Brunswick, where his father had grown up, as well as his own home province of Alberta, according to those who know his thinking.

Secret Meetings

As he moved toward supporting Energy East, Harper had his office arrange a secret meeting for April 11 with oil patch executives, Arthur Irving and others with an interest in Energy East. The stakes were high, he told the group. Keystone was faltering and the Northern Gateway would be a tough sell. Setting out what sounded like a challenge to get Energy East moving, he asked what can be done to get this oil to market, said Andrew Dawson, an Atlantic Canadian trade union official who attended the meeting.

Jason MacDonald, Harper’s director of communications, said the government supports the “diversification of markets for our resources.” Harper declined to comment for this story.

Others shared Harper’s original reticence, notably Calgary’s biggest energy producers for whom transporting Alberta oil cross-country to Saint John was testing imaginations. Many preferred terminating the line in Quebec, where they had long operated, and then assessing later if it made sense to proceed to the Atlantic coast.

This sentiment drove McKenna to distraction. As premier of New Brunswick from 1987 to 1997, he had watched neighboring Quebec’s modus operandi up close. Once the pipeline paused there, he argued, the province would hold enough leverage to ensure it never went beyond. You couldn’t cross a chasm in two bounds.

Edwards View

Executives of Canadian Natural Resources Ltd., the nation’s largest heavy oil producer, were among those who wanted to go no further than Quebec City. Chairman Murray Edwards, who wields great influence among his oil patch peers, warned at one meeting that he’d be watching to make sure Irving Oil didn’t get too greedy, according to a person in the room that day.

Edwards, in response to a Bloomberg News query, said he said no such thing. Rather, he argued that both Quebec and New Brunswick needed to realize tangible benefits from the line and that the best way to ensure shipments “will not be held hostage to the Irving refinery” was to make sure they had export options.

“From Day 1, I’ve always been of the view these issues had to be addressed -- benefits to the provinces the pipeline terminates in and that barrels are not held to ransom,” he said.

McKenna just happened to sit on the board of Edwards’s company. In the end, Canadian Natural agreed that it would commit equal amounts of Energy East oil to Quebec and Saint John.

Ah-ha Moment

The best argument in favor of going to Saint John turned out to be going to Saint John. The Irving facilities were spotless and nothing like the stereotypical 1950s-style belchers of noxious fumes. For Alison Redford, Alberta’s premier at the time, the ah-ha moment came watching from a helicopter as a moored supertanker unloaded its shipment into a buoy connected to underwater pipes that carried the crude ashore. Irving Oil has capacity to store six million barrels and handle the world’s biggest ultra-large crude carriers.

“To see that, I knew that was essentially the key to Alberta being able to unlock a competitive price for its oil,” she said.

Irving Influence

By the time Arthur Irving dropped in on McKenna in June, the Energy East game was into late innings –- and still in danger of falling apart. TransCanada had reached its official deadline the previous day on a so-called open season during which it sought long-term commitments from producers. Arthur Irving had removed one hurdle by consenting to take a minimum 50,000 barrels a day for his refinery (a figure Irving Oil would later increase.)

On June 19, Irving’s Browning sat down with TransCanada’s Pourbaix to work through the final sticking point -- the inordinate influence Irving could exercise through its control of the end of the line. Should anything go wrong at the terminal, the refinery would become the only conceivable buyer and could force distressed pricing on them.

TransCanada -- much to Arthur Irving’s annoyance –- had worked around him by quietly winning the provincial government’s assurance of land if it proved necessary to build its own terminal, according to people familiar with the plan. At that June 19 meeting, the company backed off, agreeing to form a 50-50 joint venture with Irving Oil, with Irving as the operating partner. In exchange, TransCanada won an assurance that the producers would not be held ransom.

Open Season

Open season was closed. TransCanada had made it known that the pipeline needed 500,000 to 600,000 barrels a day to be viable. Commitments grew to 900,000 barrels, including oil that would exit the pipeline at Quebec.

As TransCanada readies to file its regulatory application, challenges still exist. Quebec, as a hydro-electric superpower, has developed a strong green mindset even as it stands to benefit most from Energy East’s new construction, gain refinery jobs and turn inward shipments of imported oil from places like Algeria and Angola into exports up the St. Lawrence River. The oil sands at the other end of the line are alien to its political culture.

Quebec would get a small export terminal out of the deal. Environmentalists are warily eyeing TransCanada’s proposed location as well as the need for the line to cross the St. Lawrence, a major source of drinking water, recreation and commerce. A Quebec judge temporarily shut down TransCanada’s exploratory work on the terminal site until beluga whales clear the area in mid-October.

Slam Dunk

“It would be wrong to think this will be a slam dunk for TransCanada and that the Quebec government will just rubber stamp it,” said Steven Guilbeault, senior director of the Montreal-based environmental group, Equiterre.

For its part, TransCanada, slow to respond to Nebraskan concerns that the route crossed a sensitive aquifer, is paying attention to such matters this time. When the northern New Brunswick city of Edmundston complained the proposed eastern line put its drinking water supplies at risk, TransCanada quickly moved the route by four kilometers.

Back in Saint John, Arthur Irving, now 84, stands on the threshold of the regulatory review for a project with political, economic and environmental hurdles to clear without the counsel of his son or Mike Ashar or now Paul Browning. Irving Oil is without a CEO.

Nation Building

Despite such personal and commercial complications, the Irvings, builders of businesses for nearly a century, could see their under-appreciated East Coast assets become Canada’s chief outlet for its largest energy resource, reaping Irving Oil a stream of profits while providing substance to Stephen Harper’s eight-year-old energy superpower promise.

“It’s serendipitous,” said McKenna, matching “eastern refiners with western producers and is a great nation-building exercise.” If it also pokes a stick in the eyes of the Obama administration, so be it.

True to form, the Irvings aren’t talking. In early June, the wives of K.C. Irving’s two living and one deceased sons were honored for their works at a Rotary Club dinner at the Saint John Hilton.

As the event wrapped up, a reporter approached Arthur to ask if he would discuss Irving Oil’s Energy East role. “Ah, we’re just little guys up here,” he said as he turned back to his table.



http://www.bloomberg.com/news/2014-10-08/keystone-be-darned-canada-finds-oil-route-around-obama.html

 

[trysail]

The Current Pipeline

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https://www.flickr.com/photos/photos_by_laurence/12063636895/



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[trysail]

This is the current Keystone XL pipeline


If you set out to intentionally utilize the least safe and the least energy efficient method to transport Athabaskan and Bakken petroleum—

this is what you'd come up with.​

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https://www.flickr.com/photos/photos_by_laurence/12063636895/



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[Conager]

Seen them. Great long trains of tankers pulled by up to six locomotives. If that ever derails that is a bad day.

 

[trysail]

The Athabaskan Oil Sands process.
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http://www.npr.org/news/graphics/2012/08/tar-sands/gr-tar-sands-948.gif



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[JohnnySavage]

The capital cost of the equipment required to mine the sands and haul it to processing is a major consideration in starting production. The NEB estimates that capital costs raise the total cost of production to C$18 to C$20 per barrel for a new mining operation and C$18 to C$22 per barrel for a SAGD operation. This does not include the cost of upgrading the crude bitumen to synthetic crude oil, which makes the final costs C$36 to C$40 per barrel for a new mining operation.

linky

Is it any surprise that the Saudis are pushing the price on the world market to about that level?