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posted by LaminatorX on Saturday November 15 2014, @11:44PM   Printer-friendly [Skip to comment(s)]
from the totally-still-alive dept.

Tim Mullaney reports at CNBC that as Congress rushes to approve the long-delayed Keystone XL pipeline, it is questionable whether or not the controversial pipeline will make as much of a difference as proponents expect. The so-called "heavy oil" extracted from sand in Alberta, which the proposed pipeline would carry to Nebraska, en route to refineries on the Gulf Coast, will cost between $85 and $110 to produce[PDF] , depending on which drilling technology is used, according to a report in July by the Canadian Energy Research Institute, a nonprofit whose work is often cited by Keystone proponents. But crude oil futures now hover near four-year lows as sustained concerns over a glut in world markets continued to weigh heavily on prices and oil ministers from Saudi Arabia and Kuwait resisted calls to lower production to prevent further price declines. CERI' s analysis squares with the views of other experts, who have pointed to low prices as a sign that economic facts, at least for now, don't match political rhetoric coming from Washington, where Keystone has been a goal for both Republicans and for Senate Democrats from oil-producing states. "Anything not under construction [is] at risk of being delayed or canceled altogether," says Dinara Millington.

The situation is broadly similar to that faced by an earlier proposal to build a natural-gas pipeline from Alaska to the Midwest says energy economist Chris Lafakis. After being approved by then-Alaska Gov. Sarah Palin in 2007, the pipeline was never built, because newly discovered supplies of gas in the Lower 48 states pushed gas prices down by about two-thirds. "If oil were to stay as cheap as it is right now," says Lafakis, "you might very well get that Palin pipeline scenario."

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  • (Score: 0) by Anonymous Coward on Saturday November 15 2014, @11:51PM

    by Anonymous Coward on Saturday November 15 2014, @11:51PM (#116282)

    But they'll make up for it in volume.

  • (Score: 1) by boxfetish on Saturday November 15 2014, @11:57PM

    by boxfetish (4831) on Saturday November 15 2014, @11:57PM (#116283)

    That seems like a pretty good deal.

  • (Score: 2) by takyon on Sunday November 16 2014, @12:20AM

    by takyon (881) <{takyon} {at} {soylentnews.org}> on Sunday November 16 2014, @12:20AM (#116285) Journal

    Democrats overstate the environmental impact, which is probably better and safer than by train shipment, Republicans overstate the amount of jobs that would be created and the need for a pipeline at all.

    --
    [SIG] 10/28/2017: Soylent Upgrade v14 [soylentnews.org]
    • (Score: 2) by FatPhil on Sunday November 16 2014, @12:47PM

      by FatPhil (863) <reversethis-{if.fdsa} {ta} {tnelyos-cp}> on Sunday November 16 2014, @12:47PM (#116382) Homepage
      You recognise leaks on trains quicker than you recognise leaks in pipes.
      It's true in Russia/Kazakhstan, I see no reason for it not to be true in the US.
      --
      I know I'm God, because every time I pray to him, I find I'm talking to myself.
      • (Score: 3, Informative) by FatPhil on Sunday November 16 2014, @01:38PM

        by FatPhil (863) <reversethis-{if.fdsa} {ta} {tnelyos-cp}> on Sunday November 16 2014, @01:38PM (#116398) Homepage
        http://en.wikipedia.org/wiki/List_of_pipeline_accidents_in_the_United_States_in_the_21st_century

        Oh, my, and those are just the ones that people could be bother to type in to wikipedia. Nice to see how many of the fuel companies have done their best to cover up such failures, committing fraud in the process.

        And there are some gems there - guess what happened next here: ``venting gas in a "routine procedure" — during a lightning storm ...''
        --
        I know I'm God, because every time I pray to him, I find I'm talking to myself.
  • (Score: 1) by RedGreen on Sunday November 16 2014, @12:25AM

    by RedGreen (888) on Sunday November 16 2014, @12:25AM (#116286)

    You do not drill it is mined open pit style it is at the surface, hundreds of square kilometres of it. If you think for one minute that the price of oil is going to stay this low well I got bridge in Brooklyn going dirt cheap as well, PM for pricing.

    --
    "I modded down, down, down, and the flames went higher." -- Sven Olsen
    • (Score: 2, Interesting) by j-stroy on Sunday November 16 2014, @12:45AM

      by j-stroy (761) on Sunday November 16 2014, @12:45AM (#116288)

      Aside from the massive groundwater pollution from the massive pits ( think strip mining more than open pit) then the tar sand is heated by fracking produced LNG and the petroleum extracted in a process that is both wasteful of energy & requires even more water which is thereafter contaminated. It's the dirtiest of fuels and causes pollution of the air and water just to produce, before it is even transported or used.

      • (Score: 2) by GungnirSniper on Sunday November 16 2014, @03:09AM

        by GungnirSniper (1671) on Sunday November 16 2014, @03:09AM (#116302) Journal

        If that is the case, then why doesn't the environmentalist Left provide some alternate solutions? Wind and solar aren't ready to take the spot of oil, so what are our options? Putting on a sweater isn't the answer. Maybe new, fail-safe nuclear plants are it?

        • (Score: 0) by Anonymous Coward on Sunday November 16 2014, @04:54AM

          by Anonymous Coward on Sunday November 16 2014, @04:54AM (#116315)

          > If that is the case, then why doesn't the environmentalist Left provide some alternate solutions?

          Lol. You sure think you are brilliant.

        • (Score: 0) by Anonymous Coward on Sunday November 16 2014, @11:17AM

          by Anonymous Coward on Sunday November 16 2014, @11:17AM (#116365)

          As a general rule, "Have you got a better idea?" is rarely a compelling argument. Any idea worth its salt doesn't need that illogical retort to support it.

          • (Score: 0) by Anonymous Coward on Sunday November 16 2014, @11:32PM

            by Anonymous Coward on Sunday November 16 2014, @11:32PM (#116533)

            So in simple terms - No you don't have a better idea and you are just whining on principal.

            • (Score: 0) by Anonymous Coward on Wednesday November 19 2014, @08:09AM

              by Anonymous Coward on Wednesday November 19 2014, @08:09AM (#117559)

              In even simpler terms, one doesn't have to have a better idea in order to point out that a particular idea is crap.

      • (Score: 0) by Anonymous Coward on Sunday November 16 2014, @11:39AM

        by Anonymous Coward on Sunday November 16 2014, @11:39AM (#116369)
        it's a good thing the fracking companys don't have to comply with the Clean Air & Clean Water laws.

        or that whole dirty thing might be a problem.
  • (Score: 1) by Hartree on Sunday November 16 2014, @12:56AM

    by Hartree (195) on Sunday November 16 2014, @12:56AM (#116290)

    Many of those who oppose the pipeline want the oil to stay in the ground, thus creating higher prices and further discouraging oil use in favor of renewables. IMHO, that's unlikely to happen. It will just get exported elsewhere via pipelines to ports within Canada that politically can be built, or via rail which is unlikely to be greatly restricted.

    At the moment we have quite low prices for oil, which is a problem for those wanting greater renewable adoption, so we hear that the pipeline is uneconomical and therefore must not be built, regardless that the price of oil will almost certainly rise. It's artificially low at the moment. (Else, the predictions of peak oil that are also used as arguments against oil would be false.)

    Likewise, the same people who didn't want the Alaska gas pipeline were also in the main opposed to the massive expansion of gas production (via fracking) in the lower 48 states.

    For the most part, the basis for the opposition is not directly economic as this argument tries to portray, but rather desiring the phase out of fossil fuels in favor of other energy.

    Bottom line: People from all parts of the political spectrum will use whatever argument they can to push the policy they want for other reasons. (Look at the anti-abortion people. They're a wonderful example. If they can restrict abortion availability via a technical regulation, then they can argue that since it's not easily available, it can be outlawed without much impact on people. Sorta like the kid who kills his parents and then requests mercy for being an orphan.)

  • (Score: 0) by Anonymous Coward on Sunday November 16 2014, @01:35AM

    by Anonymous Coward on Sunday November 16 2014, @01:35AM (#116292)

    ...they build a brothel and nobody cums?

    • (Score: 0) by Anonymous Coward on Sunday November 16 2014, @03:45AM

      by Anonymous Coward on Sunday November 16 2014, @03:45AM (#116308)

      They offer 2-for-1 coupons

    • (Score: 0) by Anonymous Coward on Sunday November 16 2014, @05:20AM

      by Anonymous Coward on Sunday November 16 2014, @05:20AM (#116319)

      if you build it, they will cum

  • (Score: 2) by mendax on Sunday November 16 2014, @05:28AM

    by mendax (2840) on Sunday November 16 2014, @05:28AM (#116321)

    First, the price of oil is not going to stay this low. The Saudis and others who still pump the oil the cheap to get to are going to come to their senses eventually and start reducing their output.

    Second, Obama was being disingenuous in a speech I heard on the radio yesterday when he said:

    Understand what this project is: it is providing the ability of Canada to pump their oil, send it through our land, down to the Gulf, where it will be sold everywhere else. It doesn't have an impact on U.S. gas prices.

    .
    Hogwash! The Canadians want to sell it to American refineries. American refineries have already geared up to refine tar sand oil. Canada has its own coast line and it's not exactly a difficult proposition for them to build a pipeline and oil terminal. If they were interested only in selling it elsewhere they wouldn't need the Keystone pipeline. And it would have a moderate effect on U.S. fuel prices because Canadian oil is cheaper than imported Mexican or Venezuelan oil because of the reduced shipping costs.

    Third, the Canadians are going to sell this oil somewhere and it is going to burned. There is nothing American environmentalists can do to prevent that whatsoever.

    The pipeline ought to be built and it will be used.

    --
    It's really quite a simple choice: Life, Death, or Los Angeles.
  • (Score: 1) by khallow on Sunday November 16 2014, @05:34AM

    by khallow (3766) Subscriber Badge on Sunday November 16 2014, @05:34AM (#116323) Journal
    First, the Keystone XL expansion has already been partially completed with oil running from Alberta to Louisiana right now. The missing leg would take a shorter path to Steele City, Nebraska, increasing the volume of Alberta oil reaching the US Midwest while simultaneously, pulling oil from North Dakota and eastern Montana as well. I think that goes a long way to explaining both the support and opposition to the pipeline.

    Second, not all Alberta or North Dakota oil is equally expensive to extract. There will still be some incentive to use the pipeline even if low oil prices don't sustain full use of the pipeline. For example, the story notes one oil producer claiming they can bring some Alberta oil to market at $35 to $65 per barrel. Obviously, there's some volume threshold below which the pipeline is no longer financially viable to run, but that doesn't happen to be 100% use of the pipeline.
  • (Score: 2) by emg on Sunday November 16 2014, @06:32AM

    by emg (3464) on Sunday November 16 2014, @06:32AM (#116329)

    If the global economy ever recovers, the price of oil will skyrocket again, and everyone will be asking why the pipeline was never built.

    And that's assuming that Obama starting another war in the Middle East doesn't do the job.

    • (Score: 2) by VLM on Sunday November 16 2014, @12:27PM

      by VLM (445) Subscriber Badge on Sunday November 16 2014, @12:27PM (#116377)

      Another clause to the "if" is as depletion continues, eventually either civilization will collapse or all oil/gas will be pumped. It may not be pumped now but it will be eventually or we'll have a collapse and not care. If we're pumping it eventually then zoning and research and blueprints for a pipeline to be built in a decade make sense, especially the zoning (may not want to build a public school or a hydroelectric dam right on top of the pipeline route, etc, so make a greenspace corridor or something. If civilization collapses we won't care. Either way it makes sense to do everything with the project from geology to blueprints to zoning and then perhaps not break ground for a decade...

      There are economic effects where prices only go up, income inequality only goes up, etc, such that civilization might not collapse, but we might not need the pipeline or might not be able to afford to build it in the future. What I'm getting at is wiping out the middle class gets rid of a lot of oil demand, and we're doing a great job of it. Or you can only build a pipeline like that by burning a million barrels of $80/barrel oil (mostly in the form of diesel trucks, I guess) but you can't economically pull it off the construction if you start when oil is $120/barrel. The latter might be a good argument for building it today, pressurizing it with nitrogen, and sealing it off for a decade or so.

  • (Score: 1) by Entropy on Sunday November 16 2014, @07:03PM

    by Entropy (4228) on Sunday November 16 2014, @07:03PM (#116461)

    Enough to build a competing pipeline to export it to China... So it's a pretty safe bet that they'll be extracting that oil and it'll go SOMEWHERE. How many years ago was it not economically feasible to extract much of the oil we use today? It isn't just the price of oil--It's technology.