Obama drags his feet on Keystone XL, again

[dismal]

You are a hard person to agree with apparently. You tend to argue with anyone, even the people who agree with you. Why is this? A troubled childhood? You are so use to being wrong that you can't stand it the few times that you are right? (This is meant as a joke by the way.)

How droll.

 

[SimpleDon]

You are a hard person to agree with apparently. You tend to argue with anyone, even the people who agree with you. Why is this? A troubled childhood? You are so use to being wrong that you can't stand it the few times that you are right? (This is meant as a joke by the way.)

How droll.

As I intended. Good.

 

[Derec]

But why do you think that Venezuela wouldn't impose environmental standards? They are imposed for the benefit of the people of the country. I have built plants all over the world including in the PRC and North Korea. I don't recall anywhere that didn't impose environmental standards along the lines that I said, except that the Asian countries tended to select the US standards or the Japanese ones.

Same reason why the air and water pollution is much worse in China or India than in the West - environmental protection costs money and in developing countries it plays second fiddle. Not that developing countries have no environmental regulations, it's that they are not as strict as those of developed countries and what regulations there are are not enforced very strictly.

I don't know if you have heard, Chavez is dead.

Yeah and Maduro is no better. In fact he is even worse.

I know that they misconstrue a lot, but we are all friends here, right? And it is the truth that corporations are interested in higher prices, not lower ones.

Yet if there is healthy competition prices will stabilize at a lower level than without it.

I agree with that, but more importantly the Canadian company, TransCanadian or something like that, agrees with it. I am not recommending that you buy stock in the company.

Too risky politically I guess. Obama can't be relied to approve the pipeline after the November midterms. The way he's been going the last 6 years he'll find another excuse to delay until after the 2016 elections ...

At the current price of oil their profit margin is low. The Saudis cost of bringing in oil is only about $3 a barrel, a company with costs of $60 to $100 a barrel is exposed to high risk from new discoveries or advancements in recovery technology.

Saudi cost hasn't been $3/bbl for a long time. Still relatively cheap of course, but not quite this cheap. Almost half of their production still comes from Ghawar, which is over 60 years old now and production is maintained at great cost. Another megafield they have is Khurais, which was first developed in the 60s but then abandoned until 2009 when they restarted production using water injection of almost 2 bbl of water (pumped from Persian Gulf over 200 miles away!) for every bbl of oil produced. According to EIA, production cost of Middle Eastern oil was ~$17/bbl in 2007-2009, and is likely significantly higher today with depleting reserves. While they do not provide Saudi-specific numbers they are not very likely to be 6 times lower than the region as a whole.

In any case, global oil price cannot be lower than the cost of production of the most expensive oil necessary to meet demand. That is of course a boon to the producers whose production costs are much cheaper but it also means the oil price cannot go down appreciably unless cost of production of more expensive oil or demand go down appreciably. Also advancements in recovery technology are expected with oil sands as well, so I see no problem with them remaining competitive economically. The biggest threat is politics.

 

[Medicine Man]

Administration again delays Keystone pipeline decision

This pipeline should have been approves years ago. Instead, Obama administration is delaying a decision again, probably to after the midterm elections. Given how critical the Senate is and that the endangered Democrats support the pipeline I fear that he already decided to reject the pipeline but doesn't want to announce it before the elections.

That would be a big mistake. Pipeline transport is safer, cheaper and more energy efficient than rail. So rejecting the pipeline and having to haul the oil sands by rail will actually increase carbon emissions.
And even if ecomenatlists managed to shut down Canadian oil sands completely not even that will decrease emissions because there are other sources of oil sands like Orinoco Belt in Venezuela. Of course compared to Canada Venezuela is further away, has less strict environmental regulations and is rather unstable politically.

Why are you so desperate to pay more for gas and oil?​

'Cause....short-term....no Americans have any plans using this gas/oil, where it's headed....China!​

Nebraskans File New Lawsuits
January 20, 2015

*​

"Nebraska landowners have launched two separate lawsuits that, if successful, could serve to delay or even stop the construction of the controversial Keystone XL tar sands pipeline.

The lawsuits, filed last week, represent Nebraska property owners’ second attempt to challenge the constitutionality of a law that gave the Keystone XL pipeline a legal route through the state and, by extension, their property. The landowners claim that TransCanada — the Canadian company that wants to build Keystone XL — made direct threats to use eminent domain and seize their land if they did not consent to having the pipeline run though it.

“We stand with landowners to protect property rights and a constitutional pipeline routing process,” said Jane Kleeb, director of Bold Nebraska, a group that has been at the center of the state’s Keystone XL opposition movement. “While we fight to ensure TransCanada and the state of Nebraska do not run roughshod over farmers and ranchers, we also call upon President Obama to reject Keystone XL now.”

 

[Derec]

Holy thread resurrection Medicine Man!
Please take a look at a map concerning relative positions of Athabasca oil sands, the terminus of Keystone XL and China.

 

[fromderinside]

Medicine Man, please take a look at a map concerning relative positions of Athabasca oil sands, the terminus of Keystone XL and China.

Well its passing through the US. Since our production capacity for derivatives of oil are saturated and China is the main customer for all oil resources it is reasonable to claim that China is the target of the tar sand oil from Canada. Besides it has to be refined and where but Venezuela in the western hemisphere can it be refined?

Piping to Vancouver does no good at all since that requires it be piped over the Rockies and through regions where construction is very difficult unlike the nice warm path down to the gulf.

 

[Nice Squirrel]

You also need to make sure that oil go to a Flint Hills Resources refinery.

Hence one of the reasons the oil isn't going to Superior WI like the other pipelines being upgraded.

 

[Derec]

Well its passing through the US.

Which puts it on the wrong side of the American continent to get to China.

Since our production capacity for derivatives of oil are saturated and China is the main customer for all oil resources it is reasonable to claim that China is the target of the tar sand oil from Canada. Besides it has to be refined and where but Venezuela in the western hemisphere can it be refined?

This doesn't make any sense. First off, who says our refining capacity is saturated in the first place?
Second, you seem to think Canadian oil sands will be exported to China (incredibly by way of Venezuela if I understand you perfectly) while US will still import heavy Venezuelan oil to refine in Gulf refineries to be sold on the domestic market. That doesn't make any sense at all and just shows how desperate anti-Keystone people have become.
What will happen instead is US will refine Canadian oil sands and use it domestically and cut Venezuelan imports. If there is spare refinery capacity we may import additional Veneuzelan oil for processing and export of value-added refined products. The Venezuelans are then free to sell their heavy oil to China (mostly to service their increasing levels of debt to China)

Piping to Vancouver does no good at all since that requires it be piped over the Rockies and through regions where construction is very difficult unlike the nice warm path down to the gulf.

There is a pipeline going to Vancouver already (Kinder Morgan Trans Mountain) that is slated to be expanded and there is a plan for another western pipeline to called Enbridge Northern Gateway planned to terminate further north at Kitimat, BC which is unfortunately currently being blocked by BC politicians and local Indians. But it makes all sense in the world to have a western pipeline for export to Asia because that's where Asia is, not down by the Gulf of Mexico.

 

[bilby]

Which puts it on the wrong side of the American continent to get to China.

Unless they ever get around to building that canal across the Isthmus of Panama...

 

[Arctish]

Which puts it on the wrong side of the American continent to get to China.

Since our production capacity for derivatives of oil are saturated and China is the main customer for all oil resources it is reasonable to claim that China is the target of the tar sand oil from Canada. Besides it has to be refined and where but Venezuela in the western hemisphere can it be refined?

This doesn't make any sense. First off, who says our refining capacity is saturated in the first place?
Second, you seem to think Canadian oil sands will be exported to China (incredibly by way of Venezuela if I understand you perfectly) while US will still import heavy Venezuelan oil to refine in Gulf refineries to be sold on the domestic market. That doesn't make any sense at all and just shows how desperate anti-Keystone people have become.
What will happen instead is US will refine Canadian oil sands and use it domestically and cut Venezuelan imports.

And yet, Republicans have refused to make that promise part of the deal:

Republicans have been trying to convince the American people that the Keystone XL pipeline will reduce our dependence on foreign oil and that it will create American jobs. Yet on Tuesday they voted to table an amendment introduced by Sen. Edward Markey (D-MA) and Sen Tammy Baldwin (D-WI) that would have required keeping the pipeline oil in the United States for domestic use. Republicans unanimously rejected bringing up the amendment to a floor vote. So much for reducing America’s dependence on foreign oil. As critics have repeatedly pointed out, the proposed Keystone XL pipeline will not reduce U.S. dependence on foreign oil because the oil will be exported, after it passes through America’s midsection. Republicans proved that point by explicitly voting down any efforts to keep the pipeline oil here.<link>, <link>.

Back in the 1970s when plans for the Trans-Alaska Pipeline were being finalized, promises were made that the oil would be reserved for domestic use only. But those promises were coming from people who had rea$on$ to lie, so a sizable constituency pressured Congress into making it an actual law. As soon as the oil began to flow, Republicans started work on bypassing or overturning the law, and eventually they succeeded. The oil from an American oil field being piped across American wild lands that was supposed to be for the American market wound up being shipped to our economic rivals in China.

Now we see the same empty promises being made wrt Keystone. They say the oil will be used right here in the USA, but in reality it could be shipped anywhere and sold to anyone. We take the risk (to an extremely important aquifer), and the Canadian producers get all the rewards. IMV, it's not worth it. Let the Canadians figure out a way to get their oil to market. <*hint* refine it and sell the end product right there in the Upper Midwest.>

 

[Ford]

Back in the 1970s when plans for the Trans-Alaska Pipeline were being finalized, promises were made that the oil would be reserved for domestic use only. But those promises were coming from people who had rea$on$ to lie, so a sizable constituency pressured Congress into making it an actual law. As soon as the oil began to flow, Republicans started work on bypassing or overturning the law, and eventually they succeeded. The oil from an American oil field being piped across American wild lands that was supposed to be for the American market wound up being shipped to our economic rivals in China.

Now we see the same empty promises being made wrt Keystone. They say the oil will be used right here in the USA, but in reality it could be shipped anywhere and sold to anyone. We take the risk (to an extremely important aquifer), and the Canadian producers get all the rewards. IMV, it's not worth it. Let the Canadians figure out a way to get their oil to market. <*hint* refine it and sell the end product right there in the Upper Midwest.>

As a wise man once said, "fool me once...shame on...shame on you. Fool me...you can't get fooled again."

 

[bilby]

Oil is a commodity. It is nonsensical to talk about this oil or that oil going to US consumers, while the other oil goes to China.

It makes as much sense as talking about which of the dollar bills in the bank vault are the ones that belong to you, as a depositor. It doesn't matter; It isn't rational to even think about it in those terms.

X barrels are produced in North America, and Y barrels are produced in the rest of the world; the stuff is shipped around the place, refined, blended, shipped around some more, and then the refined output generated from Z barrels are consumed in the US, and the refined output generated from (X+Y)-Z barrels are consumed elsewhere in the world. Every barrel produced reduces the price worldwide; An additional barrel of production in North America benefits all oil consumers around the globe. You can't ring-fence the benefit and keep it in North America, and even if you could, it would be a truly stupid idea to try.

 

[Arctish]

Oil is a commodity. It is nonsensical to talk about this oil or that oil going to US consumers, while the other oil goes to China.

It makes as much sense as talking about which of the dollar bills in the bank vault are the ones that belong to you, as a depositor. It doesn't matter; It isn't rational to even think about it in those terms.

X barrels are produced in North America, and Y barrels are produced in the rest of the world; the stuff is shipped around the place, refined, blended, shipped around some more, and then the refined output generated from Z barrels are consumed in the US, and the refined output generated from (X+Y)-Z barrels are consumed elsewhere in the world. Every barrel produced reduces the price worldwide; An additional barrel of production in North America benefits all oil consumers around the globe. You can't ring-fence the benefit and keep it in North America, and even if you could, it would be a truly stupid idea to try.

I'm not so sure about that.

The Trans Alaska Pipeline was built following the 1973 Oil Crisis when the Arab members of OPEC nearly quadrupled the price per barrel. The deal was that we Americans would allow oil production and the transportation of crude in our most pristine wilderness areas in exchange for a secure supply. It was our oil and we wanted to make sure it was there for us in case OPEC decided to screw with us again. That might not be how commodity markets actually work, but it is how politics work, and building pipelines that cross valuable, vulnerable areas like the Ogallala aquifer are highly political endeavors.

 

[bilby]

Oil is a commodity. It is nonsensical to talk about this oil or that oil going to US consumers, while the other oil goes to China.

It makes as much sense as talking about which of the dollar bills in the bank vault are the ones that belong to you, as a depositor. It doesn't matter; It isn't rational to even think about it in those terms.

X barrels are produced in North America, and Y barrels are produced in the rest of the world; the stuff is shipped around the place, refined, blended, shipped around some more, and then the refined output generated from Z barrels are consumed in the US, and the refined output generated from (X+Y)-Z barrels are consumed elsewhere in the world. Every barrel produced reduces the price worldwide; An additional barrel of production in North America benefits all oil consumers around the globe. You can't ring-fence the benefit and keep it in North America, and even if you could, it would be a truly stupid idea to try.

I'm not so sure about that.

The Trans Alaska Pipeline was built following the 1973 Oil Crisis when the Arab members of OPEC nearly quadrupled the price per barrel. The deal was that we Americans would allow oil production and the transportation of crude in our most pristine wilderness areas in exchange for a secure supply. It was our oil and we wanted to make sure it was there for us in case OPEC decided to screw with us again. That might not be how commodity markets actually work, but it is how politics work, and building pipelines that cross valuable, vulnerable areas like the Ogallala aquifer are highly political endeavors.

That politics ignores the facts of the commodity markets, simply demonstrates that politicians are stupid, and/or that politicians think that the voters are stupid. Neither of these facts should be surprising to anyone who has been paying even the slightest attention.

OPEC didn't increase prices by going out with a price gun and changing the labels on the barrels of oil in their store. They did it by reducing production, which has the effect of increasing prices globally. Countering this by increasing production reduces prices globally; the location of the increased production is not important at all. Only if the international market in oil breaks down - for example because world war three breaks out - does the location of the oil wells become particularly important. Securing local supplies of oil (or other strategic materials) was not about OPEC; it was about the Soviet Union.

 

[Arctish]

I'm not so sure about that.

The Trans Alaska Pipeline was built following the 1973 Oil Crisis when the Arab members of OPEC nearly quadrupled the price per barrel. The deal was that we Americans would allow oil production and the transportation of crude in our most pristine wilderness areas in exchange for a secure supply. It was our oil and we wanted to make sure it was there for us in case OPEC decided to screw with us again. That might not be how commodity markets actually work, but it is how politics work, and building pipelines that cross valuable, vulnerable areas like the Ogallala aquifer are highly political endeavors.

That politics ignores the facts of the commodity markets, simply demonstrates that politicians are stupid, and/or that politicians think that the voters are stupid. Neither of these facts should be surprising to anyone who has been paying even the slightest attention.

OPEC didn't increase prices by going out with a price gun and changing the labels on the barrels of oil in their store. They did it by reducing production, which has the effect of increasing prices globally. Countering this by increasing production reduces prices globally; the location of the increased production is not important at all. Only if the international market in oil breaks down - for example because world war three breaks out - does the location of the oil wells become particularly important. Securing local supplies of oil (or other strategic materials) was not about OPEC; it was about the Soviet Union.

^^ This is even less reason for people in Nebraska to want the Keystone pipeline. You are basically saying they will get nothing out of it that a Trans-Canada pipeline won't provide. So they won't go for it. Let the Canadians build their own pipeline to a blue water port, and leave the Ogallala aquifer out of it.

 

[bilby]

That politics ignores the facts of the commodity markets, simply demonstrates that politicians are stupid, and/or that politicians think that the voters are stupid. Neither of these facts should be surprising to anyone who has been paying even the slightest attention.

OPEC didn't increase prices by going out with a price gun and changing the labels on the barrels of oil in their store. They did it by reducing production, which has the effect of increasing prices globally. Countering this by increasing production reduces prices globally; the location of the increased production is not important at all. Only if the international market in oil breaks down - for example because world war three breaks out - does the location of the oil wells become particularly important. Securing local supplies of oil (or other strategic materials) was not about OPEC; it was about the Soviet Union.

^^ This is even less reason for people in Nebraska to want the Keystone pipeline. You are basically saying they will get nothing out of it that a Trans-Canada pipeline won't provide. So they won't go for it. Let the Canadians build their own pipeline to a blue water port, and leave the Ogallala aquifer out of it.

Indeed. From the point of view of reducing gasoline and oil prices, all that really matters is to get oil to ports from which it can be shipped to wherever in the world it is needed. The best option is the one with the most ship, and the least truck/rail/pipeline transport. Pipelines are cheaper than trains, which are cheaper than trucks. But ships are the cheapest of all ways to move oil about; so building a pipeline to the nearest blue-water port is usually the best option, where cost alone is a concern. And as oil is a commodity, cost probably is the main concern.

At least until one of your ships hits a rock and dumps its load in a wildlife preserve.

 

[Derec]

^^ This is even less reason for people in Nebraska to want the Keystone pipeline. You are basically saying they will get nothing out of it that a Trans-Canada pipeline won't provide. So they won't go for it. Let the Canadians build their own pipeline to a blue water port, and leave the Ogallala aquifer out of it.

The landowners along the path will be compensated for their easements. Nebraska will also get transit fees from TransCanada. And it's not like Ogallala aquifer is not traversed by pipelines already, including Keystone Classic.

 

[Derec]

Indeed. From the point of view of reducing gasoline and oil prices, all that really matters is to get oil to ports from which it can be shipped to wherever in the world it is needed. The best option is the one with the most ship, and the least truck/rail/pipeline transport. Pipelines are cheaper than trains, which are cheaper than trucks. But ships are the cheapest of all ways to move oil about; so building a pipeline to the nearest blue-water port is usually the best option, where cost alone is a concern. And as oil is a commodity, cost probably is the main concern.

While oil is indeed a fungible commodity and the prices commanded are going to be world price adjusted for things like transport cost and quality of oil. But the main reason Keystone XL goes to a blue water port is not to export it but because heavy oil capable refineries and a large customer base (served by product pipelines like the Colonial Pipeline) are there. They have been served by imports through the ports (mostly from Venezuela whose oil is also heavy) and thus the pipeline would merely replace the source of oil from Venezuela et al to Canada. It makes zero logistical or otherwise sense to export Canadian oil sands through the port while continuing to import Venezuelan oil through the same port for sale on "the world market". Instead, oil sands will reduce or eliminate imports from other places like Venezuela (who can ship oil to China to service their sizable debts). If there is excess, it can be exported, but domestic market served by Gulf refineries will be served first. What is likely going to happen is that if there is excess capacity on refineries additional oil from Venezuela can be imported and refined product exported. But that is not what anti-Keystone activists mean with their "all the oil sands will be exported to China" nonsense.

 

[Nice Squirrel]

Securing local supplies of oil (or other strategic materials) was not about OPEC; it was about the Soviet Union.

This. It was a huge national pride issue. (And very little of that oils actually reaches the US market, most goes to Asian economies like South Korea and Japan.)

 

[Nice Squirrel]

^^ This is even less reason for people in Nebraska to want the Keystone pipeline. You are basically saying they will get nothing out of it that a Trans-Canada pipeline won't provide. So they won't go for it. Let the Canadians build their own pipeline to a blue water port, and leave the Ogallala aquifer out of it.

The people of Nebraska will get little if any benefits. "Petropenuers" will be the big winners.