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Natural Gas, Keystone XL Pipeline Won’t Save the U.S. Economy | New Republic

Natural Gas, Keystone XL Pipeline Won’t Save the U.S. Economy | New Republic.

Economist Kenneth Boulding famously said, “Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist.” But it’s not just economists who believe that anymore. Such ideas are still widely accepted by thought leaders, journalists, and politicians who, together, form a strong consensus that the U.S. recovery should be bolstered by natural gas exploration and production. The McKinsey Global Institute claims in a recent report that a natural gas boom is one of the most important “game changer” ideas for U.S. economic growth, while The Economist writes, “Become a champion of a global fracking revolution, Mr. Obama, and the world could look on America very differently.” And in his recent State of the Union address, President Barack Obama said “I’ll cut red tape” for factories that use natural gas, and that “Congress can help by putting people to work building fueling stations that shift more cars and trucks from foreign oil to American natural gas.”

But the belief that natural gas can be a “bridge fuel,” allowing us to grow rapidly in the age of global warming, is fit for a madman.

The current consensus is that if global temperatures rise more than 2 degrees Celsius above preindustrial levels, the consequences would be catastrophic (the Arctic melt would raise sea levels by tens of meters). So scientists have proposed a “carbon budget”: the total amount of carbon dioxide that can be released into the atmosphere without raising temperatures by 2 degrees. Using a conservative carbon budget of 450 parts per million—which has been endorsed by the International Energy Agency and Britain’s Stern Review—economists Humberto Llavador, John Roemer, and Joaquim Silvestre have thrown cold water on the idea that natural gas is our nation’s economic savior. In a forthcoming paper, they argue that given that budget, the world’s two largest CO2 emitters, the U.S. and China, must keep GDP growth within the threshold of 1 percent and 2.8 percent of GDP per year, respectively, for the next 75 years.

These results may sound surprising, but they are in line with a growing body of research on stranded carbon assets, which are assets such as fossil fuels (oil, coal and natural gas) that will lose their value well before they’re expected to. This can happen as a result of, say, market disruption (rapid advances in green technology like wind and solar polar or divestment) or government regulation (a carbon tax or stricter fuel economy standards). That latter is more likely because, even now, we have found way more fossil fuels than we could possibly burn without inviting long-term environmental disaster.

The Intergovernmental Panel on Climate Change’s carbon-budget model, widely considered the most reliable, puts the budget for 2012-2100 at between 886 and 1119 gigatons of CO2. Total known fossil fuel reserves in the world, if burned, would add 2860 gigatons of CO2 to the atmosphere. Thus, simple math indicates that almost two-thirds of all known fossil fuel reserves must remain unburned if global temperatures are to remain habitable. And these are optimistic estimates. James Hansen of the Columbia Earth Institute and other leading scientists and economists argue that all extraction of coal and other unconventional fossil fuels, like the Canadian Tar Sands, must cease immediately and the extraction of conventional fossil fuels, like oil and natural gas, must be significantly pared down.

Projects like the Keystone XL pipeline and other attempts to revive the U.S. economy based on fossil-fuel extraction are the equivalent of running up billions in debt and then running off to borrow more. The international community is already blowing through its carbon budget; the IPCC predicts that given “business as usual,” we’ll burn 1,000 gigatons of CO2 between 2012 and 2033, depleting the more conservative budget entirely and nearing the upper bound. We’ve already seen the consequences of temperatures growing by less than one degree Celsius, yet we’re on track to see themrise by more than six degrees by 2100. Our current trajectory tempts ecological and economic collapse, and yet, many are arguing that we accelerate the process.

Part of the problem is that our measure of growth, GDP, does not take into account the costs or sustainability of growth. One billion dollars of growth in the production of solar energy is not the same as $1 billion produced by coal in terms of ecological harm and sustainability, but GDP counts them equally. Instead we should measure progress using more extensive metrics like the Genuine Progress Indicator, which factors the impact of greenhouse gas emissions into its calculations. Further, we should institute a carbon tax, preferably an international one. Some companies currently price carbon internally—meaning that they put a price on the carbon produced by their projects, and subtract that from any expected returns—but do so at widely varying rates. A Carbon Disclosure Project study finds that nine of the largest energy companies in the United States internally price carbon dioxide emissions, at a cost ranging from $15 per ton (Devon) to $60 per ton (ExxonMobil). Governments should consider the social and environmental cost of carbon dioxide when they are making infrastructure and research investments, regulating extractive industries like fracking and offering tax incentives. Against the EPA’s recommendation, the State Department decided not to consider the social cost of carbon in its analysis of the Keystone pipeline.

The State Department also didn’t consider the very likely possibility that the pipeline will become a stranded asset. We can only hope it will—because that would mean we’ve finally learned that if we don’t live within our carbon budget, the long-term ecological and economic harm caused by our relentless extraction and burning of fossil fuels will obviate any short-term benefits to the economy. If we build our recovery on natural resources that need to remain underground to keep global temperatures stable, then we’ll be like the foolish builder in the Gospel of Matthew “who built his house on sand. The rain came down, the streams rose, and the winds blew and beat against that house, and it fell with a great crash.”

Lew Daly is the director of policy and research at Demos. Sean McElwee is a researcher at Demos.

Natural Gas, Keystone XL Pipeline Won't Save the U.S. Economy | New Republic

Natural Gas, Keystone XL Pipeline Won’t Save the U.S. Economy | New Republic.

Economist Kenneth Boulding famously said, “Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist.” But it’s not just economists who believe that anymore. Such ideas are still widely accepted by thought leaders, journalists, and politicians who, together, form a strong consensus that the U.S. recovery should be bolstered by natural gas exploration and production. The McKinsey Global Institute claims in a recent report that a natural gas boom is one of the most important “game changer” ideas for U.S. economic growth, while The Economist writes, “Become a champion of a global fracking revolution, Mr. Obama, and the world could look on America very differently.” And in his recent State of the Union address, President Barack Obama said “I’ll cut red tape” for factories that use natural gas, and that “Congress can help by putting people to work building fueling stations that shift more cars and trucks from foreign oil to American natural gas.”

But the belief that natural gas can be a “bridge fuel,” allowing us to grow rapidly in the age of global warming, is fit for a madman.

The current consensus is that if global temperatures rise more than 2 degrees Celsius above preindustrial levels, the consequences would be catastrophic (the Arctic melt would raise sea levels by tens of meters). So scientists have proposed a “carbon budget”: the total amount of carbon dioxide that can be released into the atmosphere without raising temperatures by 2 degrees. Using a conservative carbon budget of 450 parts per million—which has been endorsed by the International Energy Agency and Britain’s Stern Review—economists Humberto Llavador, John Roemer, and Joaquim Silvestre have thrown cold water on the idea that natural gas is our nation’s economic savior. In a forthcoming paper, they argue that given that budget, the world’s two largest CO2 emitters, the U.S. and China, must keep GDP growth within the threshold of 1 percent and 2.8 percent of GDP per year, respectively, for the next 75 years.

These results may sound surprising, but they are in line with a growing body of research on stranded carbon assets, which are assets such as fossil fuels (oil, coal and natural gas) that will lose their value well before they’re expected to. This can happen as a result of, say, market disruption (rapid advances in green technology like wind and solar polar or divestment) or government regulation (a carbon tax or stricter fuel economy standards). That latter is more likely because, even now, we have found way more fossil fuels than we could possibly burn without inviting long-term environmental disaster.

The Intergovernmental Panel on Climate Change’s carbon-budget model, widely considered the most reliable, puts the budget for 2012-2100 at between 886 and 1119 gigatons of CO2. Total known fossil fuel reserves in the world, if burned, would add 2860 gigatons of CO2 to the atmosphere. Thus, simple math indicates that almost two-thirds of all known fossil fuel reserves must remain unburned if global temperatures are to remain habitable. And these are optimistic estimates. James Hansen of the Columbia Earth Institute and other leading scientists and economists argue that all extraction of coal and other unconventional fossil fuels, like the Canadian Tar Sands, must cease immediately and the extraction of conventional fossil fuels, like oil and natural gas, must be significantly pared down.

Projects like the Keystone XL pipeline and other attempts to revive the U.S. economy based on fossil-fuel extraction are the equivalent of running up billions in debt and then running off to borrow more. The international community is already blowing through its carbon budget; the IPCC predicts that given “business as usual,” we’ll burn 1,000 gigatons of CO2 between 2012 and 2033, depleting the more conservative budget entirely and nearing the upper bound. We’ve already seen the consequences of temperatures growing by less than one degree Celsius, yet we’re on track to see themrise by more than six degrees by 2100. Our current trajectory tempts ecological and economic collapse, and yet, many are arguing that we accelerate the process.

Part of the problem is that our measure of growth, GDP, does not take into account the costs or sustainability of growth. One billion dollars of growth in the production of solar energy is not the same as $1 billion produced by coal in terms of ecological harm and sustainability, but GDP counts them equally. Instead we should measure progress using more extensive metrics like the Genuine Progress Indicator, which factors the impact of greenhouse gas emissions into its calculations. Further, we should institute a carbon tax, preferably an international one. Some companies currently price carbon internally—meaning that they put a price on the carbon produced by their projects, and subtract that from any expected returns—but do so at widely varying rates. A Carbon Disclosure Project study finds that nine of the largest energy companies in the United States internally price carbon dioxide emissions, at a cost ranging from $15 per ton (Devon) to $60 per ton (ExxonMobil). Governments should consider the social and environmental cost of carbon dioxide when they are making infrastructure and research investments, regulating extractive industries like fracking and offering tax incentives. Against the EPA’s recommendation, the State Department decided not to consider the social cost of carbon in its analysis of the Keystone pipeline.

The State Department also didn’t consider the very likely possibility that the pipeline will become a stranded asset. We can only hope it will—because that would mean we’ve finally learned that if we don’t live within our carbon budget, the long-term ecological and economic harm caused by our relentless extraction and burning of fossil fuels will obviate any short-term benefits to the economy. If we build our recovery on natural resources that need to remain underground to keep global temperatures stable, then we’ll be like the foolish builder in the Gospel of Matthew “who built his house on sand. The rain came down, the streams rose, and the winds blew and beat against that house, and it fell with a great crash.”

Lew Daly is the director of policy and research at Demos. Sean McElwee is a researcher at Demos.

Keystone XL Nebraska Route Approval Struck Down By Judge

Keystone XL Nebraska Route Approval Struck Down By Judge.

AP  |  Posted: 02/19/2014 4:14 pm EST  |  Updated: 02/19/2014 11:59 pm EST

keystone xl nebraska

WASHINGTON – Not even the U.S. president can save the Keystone XL pipeline project now — at least not by himself.

The long-delayed plan suffered a major setback Wednesday when a Nebraska district judge ripped up a state law that could have forced landowners to allow the pipeline through their property.

The ruling opens up the prospect of more regulatory hurdles, complicated negotiations with landowners, legal fights and fresh delays, regardless of whether or not Barack Obama ever approves the controversial project.

Lancaster County Judge Stephanie Stacy declared unconstitutional a law that had given Nebraska Gov. Dave Heineman the power to push the project through private land.

Unless the law is reinstated by a higher court, Calgary-based pipeline builder TransCanada Corp. could be forced to either draw up a new route or seek permission from every last landowner on the current one.

Additional lawsuits seem almost inevitable in the ongoing fight over a project designed to increase the pipeline capacity for Canadian oil into the U.S. by about one-quarter — a pitched battle that has already lasted for years.

Stacy insisted her ruling had nothing to do with the merits of the pipeline and everything to do with Nebraska’s constitution.

“TransCanada’s Keystone XL pipeline has become a political lightning rod for both supporters and opponents of the pipeline, but the issues before this court have nothing to do with the merits of that pipeline,” she wrote.

“The constitutional issues before this court will not require consideration of the current pipeline debate, nor will the decision in this case resolve that debate.”

State officials who defended the law will appeal to the Nebraska Supreme Court. Nebraska lawmakers may have to pass a new pipeline-siting law to allow the third-party Public Service Commission to act.

If they do, it’s not yet clear how long the five-member commission might take on the issue or whether it would approve the pipeline.

TransCanada, meanwhile, said it was disappointed and disagreed with the decision, but would analyze it before deciding on its next steps.

As it stands, TransCanada has settled with landowners in five of six U.S. states through which the pipeline is supposed to pass, as well as with more than two-thirds of the affected landowners in Nebraska.

But a minority have kept fighting, despite skyrocketing offers of compensation.

Jeanne Crumly and her husband have seen offers for use of their land surge from $8,900 to $61,977.84. But they don’t want the pipeline on their family farm at any price.

Crumly, who lives in the tiny Nebraska town of Page, about 300 kilometres northwest of Omaha, said she had to read the ruling a couple of times to believe it. She made celebratory phone calls to her husband and children once it sank in.

“It felt great,” Crumly said. “There’s some justice and it’s not just money running the show.”

The company had been upping the ante for access to people’s property, presumably to settle all possible disputes in the event Obama approved the pipeline.

TransCanada, which has complained it’s been losing money as the pipeline equipment sits idle, had been hoping to start building during this year’s construction season.

That plan now seems like a distant long shot.

The southern leg of the pipeline is already operational. But oil must still be transported by rail from Alberta through the northern U.S. before it can be sent by pipeline to refineries on the Gulf of Mexico.

The issue came up at a North American leaders’ summit in Mexico, where Prime Minister Stephen Harper pressed Obama to provide some clarity on his intentions.

Officials said Obama’s message remained unchanged: there’s a regulatory process underway, and he doesn’t control it.

There’s a 90-day period during which U.S. government departments can raise concerns about the pipeline, before the State Department makes a final recommendation to the president.

However, administration officials have made it clear that there is no set deadline for either State or the president to make the final call.

Obama did add during a news conference later that he and Harper spoke about the need to work together on dealing with greenhouse-gas emissions.

There is some speculation in Washington that Obama might want to delay the politically sensitive decision until after November’s midterm elections.

This Is Not the Keystone Decision That You Think It Is – Bloomberg

This Is Not the Keystone Decision That You Think It Is – Bloomberg.

By Tom Randall  Jan 31, 2014 2:00 PM ET

Photographer: Daniel Acker/Bloomberg

Construction of the Gulf Coast Project pipeline in Prague, Oklahoma, on March 11, 2013…. Read More

The U.S. State Department is about to release its long-awaited report on the Keystone XL oil pipeline, which would connect the Alberta Oil Sands to the gulf of Mexico. If you think it’s time to break out the shovels, this is not the Keystone decision that you think it is.

The environmental impact report says the pipeline won’t greatly boost oil sands or have a significant climate impact, according to congressional aids briefed on the study who spoke to Bloomberg News. It calls for additional safety measures to prevent and deal with spills, but it’s generally being received as a thumbs up for the project. Whether you find yourself disappointed or delighted, the Keystone fight is far from over. Here are three of the biggest hurdles that remain:

Hurdle 1: More Government Reviews

Today’s report will start a 90-day clock for eight U.S. federal agencies to weigh in. That includes the Environmental Protection Agency and the Department of Interior, which have both expressed reservations about the pipeline in the past. It was the EPA’s objections to the State Department’s draft assessment in March that prompted this new report in the first place. If the EPA objects again, it will pressure the final referee, President Barack Obama, to make a tough call.

 

Hurdle 2: Contractor Controversy

Today’s assessment was conducted by Environmental Resources Management (ERM), a U.K. company that environmentalists later criticized for potential conflicts of interest. The scrutiny is about to get heated.

Two environmental groups, Friends of the Earth and the Checks and Balances Project, accused ERM in July of lying about its ties to TransCanada, the Calgary-based company that wants to build the pipeline. Specifically, they charged that ERM claimed not to have worked with TransCanada for at least three years, when in fact they had worked together more recently on a pipeline project in Alaska.

The allegations are being investigated by the State Department’s Inspector General. In December, 25 members of the U.S. House of Representatives sent a letter to Obama asking for the final impact study to be delayed pending the outcome of that probe. That didn’t happen, but the conflict, if true, could conceivably lead to a do-over, which is not without precedent.

Hurdle 3 (the big one): The President’s Pen

Ultimately, this decision is for Obama to make. The State Department’s assessment is just one of many things he’ll need to consider, including pressure from his political base, public opinion, opinions of other scientific advisors, relations with Canada and energy security.

 

The Keystone report is a Friday afternoon news dump of Super Bowl proportions. By Sunday, even many Americans who oppose Keystone will be more concerned with the Denver Broncos and the Seattle Seahawks than the Canadian tar sands. Maybe that’s just as well, because the real Keystone decision is yet to come.

6 Reasons Canada Won’t Share America’s Economic Growth in 2014 | Diane Francis

6 Reasons Canada Won’t Share America’s Economic Growth in 2014 | Diane Francis.

Consensus is forming that 2014 will be the economic turning point for the United States and that is, traditionally, good news for Canada. But is it?

Most rosy is the forecast by UBS that U.S. GDP will grow by about 3 per cent in 2014 and in 2015 then beyond. The IMF has also just raised its U.S. forecast.

“There has been good action taken by Congress to eliminate the fear about the budget and to reduce the sequestration. We see the Fed having taken some very well-communicated action concerning the tapering of the program, and those are good signs — in addition to which we see some good numbers: Growth is picking up and unemployment is going down,” head of the IMF Christine Lagarde said this week. “So all of that gives us a much stronger outlook for 2014, which brings us to raising our forecast.”

Interestingly, if the United States grows by 3 percent that will virtually match China’s growth, in absolute dollars. (Lest we forget the math. A 3 percent rate in the U.S. is based on a nominal GDP of US$17-trillion and China’s equally rosy forecast of 7.5 percent is based on a nominal GDP of less than US$8-trillion.)
The turning point has come due to the energy boom in the U.S., the housing recovery, the health of its manufacturing sector and productivity rates, banking stability, job growth, low consumer debts and an improved fiscal situation due to the spending cuts imposed by sequestration.

Canada, unfortunately, has some headwinds that, until addressed, will likely decouple Canada’s growth from its neighbour’s in the short and medium term.

Here they are, not necessarily in order of importance:

— Canada lives beyond its means as an economy, with trade and export deficits, despite the benefits of high commodity prices in the past few years.

— Canada’s productivity lags U.S. rates considerably, representing a negative metric that makes export growth difficult. The reasons are varied and include the fact that the Canadian economy is balkanized into political spheres of influence, variant tax and labour laws, non-tariff barriers internally and disparate worker credentials because it lacks a national trade agency to insure the fair flow of workers, goods and services or an over-arching Inter-provincial Commerce Commission. There is no free trade within Canada.

— Canada’s dollar is headed to as low as 88 cents U.S. this year, according to some projections, which is a symptom of problems but also, ironically, somewhat helpful in exports if sustained but not helpful concerning the following issue.

— Canada’s federal and Western provinces are pitch-perfect when it comes to debt levels, spending and investment. Their Triple A or high AA credit ratings reflect that.

But Eastern Canada, on the other hand, is a problem, a clearly defined have-not part of the country with high unemployment rates, high underemployment rates and spendthrift provinces led by Ontario which has the biggest debt of any sub-national government globally. In 2003-4, debts were C$140-billion and in 2013-14 are expected to reach $260-billion and heading higher.

So this means that as the Canadian dollar falls, repayments to foreigners increase as does the need for the Bank of Canada to begin increasing interest rates. The only solution is to bite the bullet, something that vote-hungry politicians have failed to address in the past.

In light of that realization, Goldman Sachs and others are shorting the Canadian dollar.

— Consumer debt is Canada is worrisomely high. The housing bubble in Ontario, condo craziness, has forced prices for all real estate upwards, and increased borrowing, with the result that Canadians now have switched places with the Americans as holders of the highest consumer debt. (Americans were forced to shed their borrowing after the 2008 meltdown but Canadians continued the tradition.)

(This debt overhang will slow consumer spending in Canada, but the newly lower debt levels south of the border are expected to enhance U.S. growth in the next few years.)

— Canada’s cornerstone exports are facing declines. Natural gas is being replaced by U.S. shale gas production. Crude oil, Canada’s most valuable export, is expected to drop in price $20 a barrel due to increasing supplies: the U.S. shale oil boom, Canada’s increasing production, a relaxation of the embargo against Iran if it fulfills its pledges on the nuclear portfolio and Mexico’s invitation to foreign oil companies to help increase production for its moribund national oil giant.

The one bright spot would be approval, finally, of the Keystone Pipeline, with its 800,000 barrels a day of exports. Another would be the Northern Gateway proposal to the B.C. coast.

But both are political footballs for different reasons and may not happen for years, if ever.

The Iranian diplomatic deal, if successful, could enhance world peace but would unleash much oil onto the market. The embargo has limited exports from 2.5 million barrels per day to one million.

The other important export driver in Canada is Ontario’s auto industry but this year the province was overtaken, in terms of production, by the state of Michigan for the first time in a decade. And Ward’s Automotive forecasts a steady decline in Ontario production.

On a positive note, most of Canada’s problems are soluble if electorates, and their public servants, agree to old-fashioned belt-tightening.

Most importantly, Canada has to stop signing free trade agreements with countries that don’t offer reciprocity in terms of export or investment opportunities, such as China and/or the European Union, and forge a Canadian Free Trade Agreement among its provinces and territories. And the US-Canada bi-national issues should be fixed and talks about a development partnership in the North should become policy.

But those are long-term solutions that have eluded Ottawa for generations.

In the meantime, just curbing the excessive growth and overheads of the entire Canadian public sector, and creating a healthy, fair market at home for the Canadian private sector, are bottom-line essentials that any nation-state must enact in order to protect and grow.

 

Enbridge Northern Gateway Approved By Review Panel

Enbridge Northern Gateway Approved By Review Panel.

TORONTO – A panel reviewing a proposed pipeline to the Pacific Coast that would allow Canada’s oil to be shipped to Asia is recommending the Canadian government approve the project.

On Thursday, the three-person review panel recommended approving the pipeline with 209 conditions.

Natural Resource Minister Joe Oliver said the government will thoroughly review it and consult with affected aboriginal groups before making a decision on the contentious pipeline.

There is fierce environmental and aboriginal opposition and court challenges are expected.

Prime Minister Stephen Harper has staunchly supported the pipeline after the U.S. delayed a decision on TransCanada’s Keystone XL pipeline that would take oil from Alberta to the U.S. Gulf Coast.

The Northern Gateway pipeline would be laid from Alberta to the Pacific to deliver oil to Asia, mainly energy-hungry China.

 

Keystone XL Fork in the Road: TransCanada’s Houston Lateral Pipeline | DeSmogBlog

Keystone XL Fork in the Road: TransCanada’s Houston Lateral Pipeline | DeSmogBlog.

Keystone XL Fork in the Road: TransCanada’s Houston Lateral Pipeline

Only Barack Obama knows the fate of the northern half of TransCanada’s Keystone XL tar sands pipeline.  But in the meantime, TransCanada is preparing thesouthern half of the line to open forcommercial operations on January 22.

Yet, there’s a fork in this controversial pipeline system that has largely flown under the radar: TransCanada’s Houston Lateral Pipeline, which serves as a literal fork in the road of the southern half of Keystone XL’s route to Gulf Coast refineries.

Rebranded the “Gulf Coast Pipeline” by TransCanada, the 485-mile southern half of Keystone XL brings a blend of Alberta’s tar sands crude, along with oil obtained viahydraulic fracturing (“fracking”) from North Dakota’s Bakken Shale basin, to refineries in Port Arthur, Texas. This area has been coined a “sacrifice zone” by investigative journalist Ted Genoways, describing the impacts on local communities as the tar sands crude is refined mainly for export markets.

But not all tar sands and fracked oil roads lead to Port Arthur. That’s where the Houston Lateral comes into play. A pipeline oriented westward from Liberty County, TX rather than eastward to Port Arthur, Houston Lateral ushers crude oil toHouston’s refinery row.

“The 48-mile (77-kilometre) Houston Lateral Project is an additional project under development to transport oil to refineries in the Houston, TX marketplace,”TransCanada’s website explains. “Upon completion, the Gulf Coast Project and the Houston Lateral Project will become an integrated component of the Keystone Pipeline System.”

Image Credit: TransCanada

Boon for Houston’s Refinery Row

Houston’s LyondellBasell refinery is retooling itself for the looming feast of tar sands crude and fracked oil bounty that awaits from the Houston Lateral’s completion.

“The company is spending $50 million to nearly triple its capacity to run heavy Canadian crude at the Houston refinery, to 175,000 bpd from 60,000 bpd,”explained a March article in Reuters.

LyondellBasell admits TransCanada’s Houston Lateral project is a lifeline ensuring its Houston refinery remains a profitable asset.

“Over time, heavy Canadian oil is going to be extremely important to this refinery,” the company’s spokesman David Harpole said in a February interview withBloomberg. “It’s not all getting down there today but as time goes on, that will become more and more powerful to an asset like we have.”

But LyondellBasell’s not the only company with skin in the game. Valero — whose refining capacity is currently overflowing with fracked Eagle Ford shale oil — is also considering expanding its capacity to refine more tar sands crude.

Not “What If,” But “Right Now”

A financially lucrative asset to refining companies like LyondellBasell and Valero, Houston’s refineries are an issue of life or death for those living within the vicinity.

“In a December 2010 report, the Sierra Club linked tar sands refinery emissions to prenatal brain damage, asthma and emphysema,” a March Huffington Post article explained. “A recent Houston-area study found a 56 percent increased risk of acute lymphocytic leukemia among children living within two miles of the Houston Ship Channel, compared with children living more than 10 miles from the channel.”

Like Port Arthur, Houston — the headquarters for some of the biggest oil and gas companies in the world — is a major “sacrifice zone” for front-line communities, with many people suffering health impacts from the city’s four petrochemical refineries.

Photo Credit: Gulf Restoration Network

“Much of the debate around the Keystone XL pipeline has focused on the dangers of extracting and transporting the tar sands,” DeSmogBlog contributor Caroline Selle wrote in a May 2013 article. “Left out, however, are those in the United States who are guaranteed to feel the impacts of increased tar sands usage. Spill or no spill, anyone living near a tar sands refinery will bear the burden of the refining process.”

With Keystone XL’s southern half currently being injected with oil and with TransCanada counting down the weeks until it opens for commercial operations, those living in front-line refinery neighborhoods face a daunting “survival of the fittest” task ahead.

“With toxic chemical exposure nearly certain, it is unclear what the next step will be for residents [living in refinery neighborhoods],” Selle wrote in her May article. “[T]his is a life or death struggle more immediate than the ‘what-if’ of a pipeline spill. And it’s not a ‘what-if, [but rather] the fight is ‘right now.'”

 

U.S. Oil Production To Grow Faster Than Thought, Threatening Oilsands

U.S. Oil Production To Grow Faster Than Thought, Threatening Oilsands.

Domestic U.S. oil production is expected to grow much faster than was thought just a few months ago, according to a new report from the U.S. federal government, placing an even larger question mark on the future of Canada’s oilsands.

The U.S. Energy Information Administration’s preliminary outlook for 2014 predicts U.S. oil imports next year will be one million barrels per day less than previously forecast.

By way of illustration, Alberta’s total oil exports to the U.S. were 1.3 million barrels per day in 2011.

With growth in both oil and natural gas production, we see the U.S. moving closer toward self-sufficiency, and there are some very interesting economic and geopolitical implications to all that,” EIA head Adam Sieminski said at a briefing, as quoted at Inside Climate News.

One of those “geopolitical implications” could be that President Barack Obama feels less pressure to approve the Keystone XL pipeline, the news site reported.

The news comes as Keystone builder TransCanada prepares to start operating the southern leg of the pipeline, which runs from an oil terminal in Cushing, Okla., to Gulf Coast ports in Texas.

At the same time, Canada’s oil industry is facing another competitive threat: The opening up of Mexico’s state-controlled oil industry. Mexico’s Congress recently passed a bill allowing foreign investment in the oil industry, whose production has been controlled by state-run Pemex for decades. It’s expected new investment will boost Mexican oil production.

Adding Mexico’s oil and gas resources to world markets, given the U.S.’s tight oil and gas and Canadian oil sands, could have dramatic implications in the medium and long term,” Barclays analyst Michael Cohen wrote in a note to clients quoted at the National Post.

Between booming oil production from unconventional domestic sources, the oilsands and now Mexican oil exports, the U.S. will be spoiled for choice when it comes to sources of oil in the coming years.

Canadian oil has been selling at a “discount” in the U.S. for years, sometimes trading for 30 per cent below U.S. crude oil prices. Keystone backers say the pipeline will fix that by giving Canadian oil access to new markets, but the EIA’s report makes that less certain.

If there’s a bright spot for Canadian oil exporters in this, it’s that the U.S.’s oil boom won’t last that long. The EIA forecasts that domestic production will start leveling off in 2016, and then start declining in 2020.

The share of oil and other liquid fuels that comes from imports will fall to 25 per cent in 2016, the EIA said, but will then start to climb, reaching 32 per cent by 2040.

But natural gas production will continue to climb for decades after that, and that — combined with greater fuel efficiency for cars — means the U.S. will continue to become less reliant, overall, on energy imports through 2040, the EIA said.

Opponents of the Keystone XL pipeline were quick to seize on the report.

“We simply don’t need this tar sands pipeline,” Anthony Swift of the Natural Resources Defence Council — a major Keystone opponent — told Inside Climate News.

Shawn Howard, a spokesman for Keystone builder TransCanada, begged to differ.

“Our customers have signed long-term commercial contracts because they understand the need for the oil that Keystone XL will bring to U.S. refineries,” he said. “We have a waiting list of customers interested in securing capacity on Keystone XL if it becomes available.”

Not all Keystone XL customers feel this way anymore. Harold Hamm, the CEO of Continental Resources, which signed up to use the Keystone XL, said this week the pipeline is no longer needed.

But Continental Resources is betting that oil-by-rail, rather than pipelines, will be the solution going forward. Many observers have argued, in the wake of the Lac-Megantic disaster, that pipelines are a safer option than rail for transporting oil.

Oil And Gas Lobbying In Canada Overshadows All Other Pressure Groups: Polaris Study

Oil And Gas Lobbying In Canada Overshadows All Other Pressure Groups: Polaris Study.

OTTAWA – Heavy lobbying by the oil and gas industry has far outstripped any other interest group seeking to influence the Harper government over the last four years, according to a new study that examined the lobbyist registry.

The left-leaning Polaris Institute contends that the more than 2,700 meetings between oil and gas lobbyists and federal office holders since 2008 have helped turn Canada into a “petro state.”

Prime Minister Stephen Harper has been promoting Canada as an emerging “energy super power” since coming to office in 2006.

And in the last 18 months, pipeline politics have become an Ottawa preoccupation as major public policy debates erupted in both Canada and the United States over the proposed TransCanada Keystone XL pipeline to the Gulf Coast and Enbridge’s proposed Northern Gateway pipeline to Kitimat, B.C.

Research by the Polaris Institute suggests that industry lobbying efforts have been gaining steam in lock step.

Using the federal lobbyist registry to track meetings, the study shows that since 2008 oil and gas interests dwarfed contact by other major industry groups, including the mining industry, car makers and the forestry industry.

The 734 contacts by the Canadian Association of Petroleum Producers and the Canadian Energy Pipeline Association almost doubled the 412 communications by two major mining associations, and almost tripled the 245 contacts by the major forest industry groups. Two groups representing auto manufacturers had 157 recorded contacts over the same four-year period.

A spokesman for Natural Resources Minister Joe Oliver made no apologies for meeting with industry lobbyists.

“The minister considers it appropriate to meet with a variety of groups, including those from industry, to keep himself informed on issues related to his ministerial responsibilities,” Chris McCluskey said in an email.

Those lobbying efforts redoubled last year. The Canadian Association of Petroleum Producers (CAPP) had 190 contacts with government officials in 2011, up from 86 in 2010.

“This rapid increase in officially recorded lobbying by CAPP coincides with a major public relations push in print, television and online advertising designed to counter increasing opposition to the tar sands,” says the Polaris report.

In addition to industry advertising, this fall the Conservative government also launched a major television ad campaign, with a budget of $9 million, to pitch Canadians on “responsible resource development.”

Since achieving a majority in the May 2011 election, the Conservative government has been rewriting or repealing laws governing environmental assessments, navigable waterways and other measures it says are an impediment to major resource developments.

The Polaris study contends oil industry lobbyists are behind the policy changes.

“The amount of face time the oil industry gets in Ottawa in personal meetings and other correspondence greatly exceeds the time afforded other major industries in Canada,” Daniel Cayley-Daoust, one of the report’s authors, said in a release.

“No one doubts the hold the oil industry has on this current government, but it is important Canadians are aware that such a high rate of lobbying to federal ministers has strong policy implications.”

The study claims environmental groups have been all but shut out by the Conservative government, judging by lobbyist registry contacts.

That’s not true, said McCluskey, who noted his minister met last week with a coalition of environmental groups representing five different organizations.

He said the Polaris study is based solely on meetings that are reported to the commissioner of lobbying.

“While industry associations report their meetings to the commissioner, in many cases environmental groups do not,” said the government spokesman.

“The minister will continue to assess invitations to meet environmental groups and the natural resources industry — which directly employs 800,000 Canadians and indirectly employs 800,000 more.”

 

 

Canadian Federal Lobbying: Oil, Banking Dominate

Canadian Federal Lobbying: Oil, Banking Dominate.

Oil, gas and mining industry groups were far and away the most active lobbyists in Ottawa over the past year, according to an analysis from Macleans.

The Canadian Association of Petroleum Producers (CAPP), the country’s principal lobby group for oil and gas, made 58 lobbying efforts with the federal government over the past 12 months, the most of any group. In second place is the Mining Association of Canada, with 48 lobbying efforts.

The numbers are based on the federal lobbyist registry, which tracks communications between lobbyists and federal government departments, but offers no detail on how a lobbying effort was received by government officials.

The banking industry has also been prominent in its lobby efforts. The Canadian Bankers Association lobbied the Department of Finance 42 times in the past year, and Royal Bank of Canada alone made 27 efforts.

Check out the Macleans infographic here.

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Most Active Lobbyists In Canada

THE CANADIAN PRESS/Larry MacDougal

Among groups that lobbied the Prime Minister’s Office directly, the Mining Association of Canada came first, with 11 efforts, according to Macleans.

The Federation of Canadian Municipalities and Keystone XL pipeline builder TransCanada tied for second, with 10 lobby efforts each. The Small Guys Tobacco Group came in fourth, with nine lobbying efforts.

report from the left-leaning Polaris Institute last year said oil and gas interests outstripped all others when it came to lobbying in Canada in recent years. The analysis of lobby registry entries found more than 2,700 meetings between the industry and government officials — a fact the Institute used to argue Canada is becoming a “petro state.”

 

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