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Are We Fully Understanding the Consequences of Oil Transit Accidents? | Nick Martyn

Are We Fully Understanding the Consequences of Oil Transit Accidents? | Nick Martyn.

Recent events in Canada’s rail transport network have prompted a much-needed national debate about the risks of energy transport and rail safety. No matter our personal stance regarding climate change, we all live in an oil dependant society and until we find another way to power the global economy and our civil society, oil and gas will have to move from where it is found to where it is used. In Canada that largely means it will move either via pipeline or rail. But when a pipeline leaks or oil tankers derail, the risks of oil transit are thrown into stark relief; especially for the residents of communities in the immediate vicinity and the ecosystems affected.

Broadly speaking, risk is thought of as the “possibility of loss.” It is generally viewed as the combination of the likelihood of loss and the consequences of that loss. Likelihood, otherwise known as the “probability of occurrence”, is the foundation of actuarial science; which underpins the insurance industry. Probability suggests that if historical trends continue and the future cooperates with the past, then the likelihood of something occurring can be calculated to a sufficient degree that insurance against the event could be issued with a reasonable chance that it would not have to be paid. In essence a bet is laid against the event. If the event occurs then the insurer has to pay out. If it does not then the insurer makes money.

The Insurance Bureau of Canada declared 2013 the worst year on record for insurance related payouts, meaning that insurers will pay out a lot of money because the future did not cooperate with the past and the unlikely happened. The object lesson here is that while likelihood is interesting, consequences are costly.

As we seek export markets for Canadian energy products, so the volume of those products in transit increases. Eric Sprott, the renowned Canadian resource investor notes in his January 27, 2014 newsletter that by the end of 2013 Canada’s rail industry was shipping 375,000 barrels of oil per day and that figure is expected to each 900,000 barrels per day by the end of 2014. As for a pipeline, Sprott believes the Energy East pipeline will get the go-ahead and will increase Canada’s export capacity by 800,000 barrels. Since Canada has not added significantly to its pipeline infrastructure in decades, there is little choice but to ship it via the rail network, which coincidentally has not been significantly increased in decades. When both the nature and the volume of rail traffic increases on a network that has not appreciably increased in size or capability the “likelihood” of failure events also increases, as do the consequences.

To date consequence has been considered somewhat subjective and therefore less quantifiable than likelihood, partly because each stakeholder sees consequence differently. For instance the Mayor of a community thinks of the consequence of a train derailment and spill in the community in a much different way than the CEO of the rail company or the owner of the shipment. The cold hard reality is that no matter how small the statistical likelihood that derailments will happen, the consequences when derailments happen are significant. As events increase in frequency and it seems severity, it is clearly time to rethink our evaluation of risk in rail transport.

While the probability that a train-load of inappropriately classified oil products would careen down a hill in rural Quebec and explode, killing 47 people and contaminating a fragile lake ecosystem was so infinitesimally small as to be almost incalculable, the consequences were devastating and will be felt for generations. The policies that drive rail system regulation (or any system for that matter) are driven by the likelihood of a failure not the consequences. In part this is because it is difficult to foresee every event and frame a regulation to prevent it, but also because the risk analysis techniques to quantify consequence in a useful way, to date, have not existed.

Risk analysis techniques have improved markedly in recent years, to the point that networked risk analysis tools can fathom the pathways of exposure to risk in models containing thousands of entities. Given the complexity and importance of the energy transport question in Canada and the severe and sometimes tragic consequences of failure, it seems time to revisit the question of energy transport risk with modern tools so that no matter which side of the energy debate we stand on, we have a safer, cleaner Canada to live in and to pass on to our children.

Are We Fully Understanding the Consequences of Oil Transit Accidents? | Nick Martyn

Are We Fully Understanding the Consequences of Oil Transit Accidents? | Nick Martyn.

Recent events in Canada’s rail transport network have prompted a much-needed national debate about the risks of energy transport and rail safety. No matter our personal stance regarding climate change, we all live in an oil dependant society and until we find another way to power the global economy and our civil society, oil and gas will have to move from where it is found to where it is used. In Canada that largely means it will move either via pipeline or rail. But when a pipeline leaks or oil tankers derail, the risks of oil transit are thrown into stark relief; especially for the residents of communities in the immediate vicinity and the ecosystems affected.

Broadly speaking, risk is thought of as the “possibility of loss.” It is generally viewed as the combination of the likelihood of loss and the consequences of that loss. Likelihood, otherwise known as the “probability of occurrence”, is the foundation of actuarial science; which underpins the insurance industry. Probability suggests that if historical trends continue and the future cooperates with the past, then the likelihood of something occurring can be calculated to a sufficient degree that insurance against the event could be issued with a reasonable chance that it would not have to be paid. In essence a bet is laid against the event. If the event occurs then the insurer has to pay out. If it does not then the insurer makes money.

The Insurance Bureau of Canada declared 2013 the worst year on record for insurance related payouts, meaning that insurers will pay out a lot of money because the future did not cooperate with the past and the unlikely happened. The object lesson here is that while likelihood is interesting, consequences are costly.

As we seek export markets for Canadian energy products, so the volume of those products in transit increases. Eric Sprott, the renowned Canadian resource investor notes in his January 27, 2014 newsletter that by the end of 2013 Canada’s rail industry was shipping 375,000 barrels of oil per day and that figure is expected to each 900,000 barrels per day by the end of 2014. As for a pipeline, Sprott believes the Energy East pipeline will get the go-ahead and will increase Canada’s export capacity by 800,000 barrels. Since Canada has not added significantly to its pipeline infrastructure in decades, there is little choice but to ship it via the rail network, which coincidentally has not been significantly increased in decades. When both the nature and the volume of rail traffic increases on a network that has not appreciably increased in size or capability the “likelihood” of failure events also increases, as do the consequences.

To date consequence has been considered somewhat subjective and therefore less quantifiable than likelihood, partly because each stakeholder sees consequence differently. For instance the Mayor of a community thinks of the consequence of a train derailment and spill in the community in a much different way than the CEO of the rail company or the owner of the shipment. The cold hard reality is that no matter how small the statistical likelihood that derailments will happen, the consequences when derailments happen are significant. As events increase in frequency and it seems severity, it is clearly time to rethink our evaluation of risk in rail transport.

While the probability that a train-load of inappropriately classified oil products would careen down a hill in rural Quebec and explode, killing 47 people and contaminating a fragile lake ecosystem was so infinitesimally small as to be almost incalculable, the consequences were devastating and will be felt for generations. The policies that drive rail system regulation (or any system for that matter) are driven by the likelihood of a failure not the consequences. In part this is because it is difficult to foresee every event and frame a regulation to prevent it, but also because the risk analysis techniques to quantify consequence in a useful way, to date, have not existed.

Risk analysis techniques have improved markedly in recent years, to the point that networked risk analysis tools can fathom the pathways of exposure to risk in models containing thousands of entities. Given the complexity and importance of the energy transport question in Canada and the severe and sometimes tragic consequences of failure, it seems time to revisit the question of energy transport risk with modern tools so that no matter which side of the energy debate we stand on, we have a safer, cleaner Canada to live in and to pass on to our children.

Proposed Energy East Pipeline Could Exceed Keystone XL in GHG Emissions, Finds Report | DeSmog Canada

Proposed Energy East Pipeline Could Exceed Keystone XL in GHG Emissions, Finds Report | DeSmog Canada.

Fri, 2014-02-07 10:08INDRA DAS

Indra Das's picture

Proposed Energy East Pipeline Could Exceed Keystone XL in GHG Emissions, Finds Report

Climate Implications of the Proposed Energy East Pipeline: A Preliminary Assessment

A new report from Pembina Institute says that the proposed TransCanada Energy East pipeline could generate up to 32 million tonnes (Mt) of additional greenhouse gas (GHG) emissions from the crude oil production required to fill it. Thirty-two million tonnes of carbon emissions is the equivalent of adding 7 million cars to Canada’s roads, exceeding the projected emissions of the Keystone XL pipeline proposal.

The Keystone XL pipeline, in comparison, would generate 22 Mt of additional GHG emissions through oilsands production, according to a previous report by Pembina. The estimated emissions impact of Energy East is “higher than the total current provincial emissions of five provinces.”

The $12 million Energy East pipeline, proposed by TransCanada in August 2013, would have the capacity to transport 1.1 million barrels per day (bpd) of oilsands and conventional crude oil from Alberta to New Brunswick. According to the report, the volume of new oilsands production associated with Energy East would represent up to a 39 per cent increase from 2012 oilsands production levels.

Figure 1: Greenhouse gas emissions associated with Energy East compared to those of selected
provinces. Climate Implications of the Proposed Energy East Pipeline: A Preliminary Assessment. The Pembina Institute, 2014.

Oilsands production is currently Canada’s fastest growing source of GHG emissions, and is set to nearly triple between now and 2030, according to Environment Canada. Report authors Clare Demerse and Erin Flanagan told DeSmog Canada that this growth is “the single largest barrier to achieving [Canada’s] 2020 climate target.”

Given that Canada is set to miss its 2020 emissions reduction target by 122 Mt with current measures, Demerse and Flanagan see the Energy East proposal’s potential to add a new source of GHGs from the oilsands as “significant and troubling.”

The authors stress that the report, titled Climate Implications of the Proposed Energy East Pipeline, only assesses the pipeline’s upstream, “Well-to-Refinery Gate” emissions impact, rather than the downstream, “Well-to-Wheel” emissions of the crude oil being transported, which would include emissions released by its combustion in vehicle engines. The actual climate impact of Energy East would therefore be even greater than figures in the report.

“The oilsands are already Canada’s fastest-growing source of carbon pollution and the Energy East pipeline would help to accelerate production. Any regulatory review should include not only the impact of the pipeline itself, but also the impact of producing the crude that would flow through it,” said Demerse, Federal Policy Director at Pembina.

Figure 2: Change in GHG emissions by economic sector, 2005-2020. Climate Implications of the Proposed Energy East Pipeline: A Preliminary Assessment. The Pembina Institute, 2014.

Demerse and Flanagan hope that the report will urge the National Energy Board (NEB) to undertake a more thorough appraisal of Energy East’s environmental impact than its review of Enbridge’s Northern Gateway proposal, saying that they wanted to submit their findings “before the National Energy Board decides on the format of its review.”

The authors note that “many Canadians asked for consideration of the impacts of oilsands production in the Northern Gateway hearings,” so if the NEB chooses a “more complete and balanced review of the Energy East proposal – one that looks at the environmental impacts of filling the pipeline as well as the pipeline infrastructure itself – I think the regulators would simply be catching up to where Canadians already are.”

TransCanada is set to submit its regulatory application for Energy East to the NEB later this year.

The report recommends that the NEB “include the pipeline’s full upstream impacts in the scope of its review, and that the federal government should end its delays and adopt strong emissions regulations for the oil and gas sector.”

The report mentions that carbon capture and storage (CCS) technologies have been found to lower oilsands production emissions, but adds that “Canada lacks the kind of stringent climate policies that would provide a strong incentive for those kinds of investments,” especially considering the high cost of such technology.

ICO2N, a group of energy companies invested in developing CCS technology, estimates that a carbon price of $125/tonne is necessary to justify capture of approximately 15 per cent of oilsands CO2.

The authors believe that approving projects like Energy East and Keystone XL could “see less emphasis on, and less encouragement of, clean energy investment in Canada” when the country needs to be “starting the transition to a clean energy future.”

“The oilsands industry plans to triple production by 2030 and building new pipelines is necessary to realize those ambitions. We need to look at the full scope of impacts when evaluating pipelines,” said Flanagan.

In its 2013 World Energy Outlook, the International Energy Association (IEA) modelled a scenario where countries take the action required to keep global warming below 2 degrees C, and found that global demand for oil would likely peak in 2020 and fall thereafter. Demerse and Flanagan suggest that Canada needs to “keep that kind of long-term picture in mind when we’re considering a pipeline proposal that could last for 30, 40 or 50 years.”

What the TransCanada Pipeline Will Really Cost Us | Carl Duivenvoorden

What the TransCanada Pipeline Will Really Cost Us | Carl Duivenvoorden.

Carl Duivenvoorden

Sustainability consultant

 What the TransCanada Pipeline Will Really Cost Us
Posted: 02/06/2014 5:30 pm

As the Energy East Pipeline dominates ever more headlines, editorials, ads and press conferences in my home province of New Brunswick and elsewhere, I’m reminded of an interview given by Calgary Mayor Naheed Nenshi on the CBC Radio’s The House in February 2013.

Mayor Nenshi said:

We’ve got a resource that is valuable to us and to our kids and to our grandkids, and we know that someday it’s not going to be that valuable; someday we’ll have a low carbon world. And I think it would be deeply irresponsible for us to leave that resource in the ground so that it will be worthless for future generations.

Ponder that statement and you get to the heart of the current lust for pipelines out of Alberta, whether south, west, north or east. You get to the heart of why the Energy East Pipeline, a project barely contemplated just a year ago, has quickly received nearly universal adulations and blessings, and seems on an ultrafast track to reality.

But before we place our chips on the pipeline, perhaps the costs and benefits are worth closer scrutiny.

Economic gains

Almost every assessment of the pipeline stresses the economic gains it will provide to New Brunswick. A recent report by Deloitte and Touche (commissioned, interestingly, by TransCanada, the company building the pipeline) suggests our province will earn about $700 million in tax revenues over 40 years. That sounds like a lot, but, in context, it’s roughly $20 million per year in a province with an annual budget of about $8,000 million, or about 0.25 per cent of our budget. Not exactly a windfall.

The same report suggests NB would see about 1550 direct jobs as a result of the pipeline. That sounds tempting too. But over 90 per cent would be temporary, lasting three years at most. In context, NB’s construction industry presently provides 27,000 jobs, or nearly 20 times as many.

Finally, because Alberta oil is landlocked and therefore traditionally sold below world prices, it’s been suggested that bringing it east will lower energy prices for us. As rosy as it might be to imagine that world oil prices will suddenly drop because Alberta crude has arrived in Atlantic Canada, it’s probably more realistic to expect that Alberta crude will get more expensive as soon as a pipeline links it to us, and the world market.

So — economic glitter perhaps, but not necessarily economic gold.

Environmental costs

It’s interesting, and perhaps telling, that the Deloitte and Touche study specifically excluded any assessment of the environmental aspects of the pipeline project. So has much of the official conversation. That’s like ignoring elephants in the room.

First, there’s the issue of pipeline integrity and the potential for spills. Pipelines have a long and mostly successful history, so it’s probably fair to assume that if they are well engineered, constructed, maintained and operated, the risk of ruptures is small. A spill is possible, but it’s probably the baby elephant in the room.

The jumbo elephant, quietly ignored in most of the conversation so far, is climate change. No matter what any of us may wish to believe, burning oil produces greenhouse gases, and greenhouse gases are warming our planet and disrupting our weather. The Energy East Pipeline, the Keystone XL Pipeline, the Northern Gateway Pipeline and the hinted Beaufort Sea option – all are big, new drinking straws stuck into that bituminous milkshake called the oil sands, serving it up to an addicted world that needs to break its addiction.

The International Energy Agency, a leading global authority, has stated that if we are to put the brakes on climate change, most of our known global fossil fuel reserves must remain untouched in the ground. Kudos to Mayor Nenshi for implicitly acknowledging that; but shame on those who interpret it as a signal to get as much oil to market as quickly as possible while it’s still worth something. Hence the pipeline bonanza in which we are being asked to partake.

Our choice

Jobs come and go but climate change is permanent. Years from now, our grandkids will look back on the decision we are facing today. I can’t imagine them being very sympathetic or understanding if we choose to trade away their long term climate stability for our short term prosperity. But that’s the very trade we’re contemplating as we consider the Energy East pipeline.

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.

David Suzuki: Rail versus pipeline is the wrong question : thegreenpages.ca

David Suzuki: Rail versus pipeline is the wrong question : thegreenpages.ca.

Photo: Rail versus pipeline is the wrong question

The question isn’t about whether to use rail or pipelines. It’s about how to reduce our need for both. (Credit: Dieter Drescher via Flickr)

By David Suzuki with contributions from Ian Hanington, Senior Editor

Debating the best way to do something we shouldn’t be doing in the first place is a sure way to end up in the wrong place. That’s what’s happening with the “rail versus pipeline” discussion. Some say recent rail accidents mean we should build more pipelines to transport fossil fuels. Others argue that leaks, high construction costs, opposition and red tape surrounding pipelines are arguments in favour of using trains.

But the recent spate of rail accidents and pipeline leaks and spills doesn’t provide arguments for one or the other; instead, it indicates that rapidly increasing oil and gas development and shipping ever greater amounts, by any method, will mean more accidents, spills, environmental damage — even death. The answer is to step back from this reckless plunder and consider ways to reduce our fossil fuel use.

If we were to slow down oil sands development, encourage conservation and invest in clean energy technology, we could save money, ecosystems and lives — and we’d still have valuable fossil fuel resources long into the future, perhaps until we’ve figured out ways to use them that aren’t so wasteful. We wouldn’t need to build more pipelines just to sell oil and gas as quickly as possible, mostly to foreign markets. We wouldn’t have to send so many unsafe rail tankers through wilderness areas and places people live.

We may forgo some of the short-term jobs and economic opportunities the fossil fuel industry provides, but surely we can find better ways to keep people employed and the economy humming. Gambling, selling guns and drugs and encouraging people to smoke all create jobs and economic benefits, too — but we rightly try to limit those activities when the harms outweigh the benefits.

Both transportation methods come with significant risks. Shipping by rail leads to more accidents and spills, but pipeline leaks usually involve much larger volumes. One of the reasons we’re seeing more train accidents involving fossil fuels is the incredible boom in moving these products by rail. According to the American Association of Railroads, train shipment of crude oil in the U.S. grew from 9,500 carloads in 2008 to 234,000 in 2012 — almost 25 times as many in only four years! That’s expected to rise to 400,000 this year.

As with pipelines, risks are increased because many rail cars are older and not built to standards that would reduce the chances of leaks and explosions when accidents occur. Some in the rail industry argue it would cost too much to replace all the tank cars as quickly as is needed to move the ever-increasing volumes of oil. We must improve rail safety and pipeline infrastructure for the oil and gas that we’ll continue to ship for the foreseeable future, but we must also find ways to transport less.

The economic arguments for massive oil sands and liquefied natural gas development and expansion aren’t great to begin with — at least with the way our federal and provincial governments are going about it. Despite a boom in oil sands growth and production, “Alberta has run consecutive budget deficits since 2008 and since then has burned through $15 billion of its sustainability fund,” according to an article on the Tyee website. The Canadian Taxpayers Federation says Alberta’s debt is now $7 billion and growing by $11 million daily.

As for jobs, a 2012 report by the Canadian Centre for Policy Alternatives shows less than one per cent of Canadian workers are employed in extraction and production of oil, coal and natural gas. Pipelines and fossil fuel development are not great long-term job creators, and pale in comparison to employment generated by the renewable energy sector.

Beyond the danger to the environment and human health, the worst risk from rapid expansion of oil sands, coal mines and gas fields and the infrastructure needed to transport the fuels is the carbon emissions from burning their products — regardless of whether that happens here, in China or elsewhere. Many climate scientists and energy experts, including the International Energy Agency, agree that to have any chance of avoiding catastrophic climate change, we must leave at least two-thirds of our remaining fossil fuels in the ground.

The question isn’t about whether to use rail or pipelines. It’s about how to reduce our need for both.

Related articles

The Kochs Have Bet Big That The Earth Is Doomed | Eric Zuesse

The Kochs Have Bet Big That The Earth Is Doomed | Eric Zuesse.

The Kochs have bet big that the earth is doomed. (And Obama is fighting for them to win that bet).

Forbes magazine noted, way back in 2006, that though the Koch brothers – David and Charles – could sell Koch Industries and live happily ever after (on the proceeds from selling what was then the world’s largest private company), Charles, who actually runs the firm, told them straight out, that selling it would be “literally over my dead body.”

In other words: they won’t do that.

What, then, is such an extraordinary business plan, that keeps them from simply retiring as two of the world’s richest people? The answer seems clear:

Petroleum has been their firm’s base, ever since their dad, Fred Koch, started Koch Industries in 1940 (on the proceeds he had earned mainly during 1929-32 from helping Stalin build the Soviet Union’s crucial oil-infrastructure). However, Koch Industries has been diversifying recently. In 2004, they paid $4.2 billion for Dupont’s fibers businesses, including Dacron and much else. Then, in 2005, they paid $21 billion for Georgia-Pacific, the paper and wood-products manufacturer.

But their chief business continues to be petroleum: not just the pipelines to transport it, but increasingly also the raw oil in the ground, and the dirtier the oil the better. They now own two-thirds of the world’s dirtiest oil: Alberta Canada’s tar sands. And they are lobbying and propagandizing heavily for President Obama to allow construction of the Keystone XL Pipeline (which pipeline they would own 25%) in order for that deeply land-locked Canadian oil to be transported to two of their own Texas refineries, which have been especially adapted for the purpose. Not only would they be deriving about $1 billion per year from operating the pipeline, but they would also be marketing the tar sands, two thirds of which are on land that is owned by Koch Industries. That’s the two-thirds of Alberta’s tar sands oil that the Kochs actually own.

However, one of the world’s biggest banks, HSBC, came out with a study, on 25 January 2013, “Oil & Carbon Revisited: Value at Risk from ‘Unburnable’ Reserves,” which reported that in order for this planet to have even as much as a 50% chance of avoiding the climate’s going haywire, “only around 1,000 Gt [Gigatons] or a third of current proven reserves can be ‘burned’.” Furthermore, “Embedded ‘carbon’ in coal is three times the amount bound in oil and over four times that in gas.” This report acknowledged that, “It is clear that reduced usage of coal [whose usage is soaring in China and already causing massive health-problems in Chinese cities] is the key to stabilising and eventually reducing annual carbon emissions. However, we believe that reductions in oil demand … can be delivered more quickly than coal through improvements in transport fuel economy.” In other words: forcing a reduction in oil-use is absolutely essential, in order for our descendants not to lose the planet quickly.

On page 16 of that report was a stunning calculation, titled “Break-evens for selected high-cost oil projects,” and the researchers actually calculated there the price that a barrel of oil would need to fetch on the global market in order for each type of petroleum to be able to be produced without the sellers losing money on that oil. For “Deepwater” projects, it ranged from $49.40 up to $64.00. On “Heavy oil,” it was $54.70. And on “Oil sands” (Alberta’s oil, the dirtiest in the world), it was $75.50.

In other words, the Koch brothers (via their private firm) own two-thirds of the world’s dirtiest petroleum, which consequently is so costly to process, that it becomes utterly worthless at a global per-barrel price of $75.50. All other oil would still be profitable at that price, but not the oil that now constitutes the biggest speculative (and by far the riskiest) portion of the Koch brothers’ (or of Koch Industries’) massive investment portfolio.

Whereas other oil companies have focused on the lowest-cost petroleums to get to market, the Kochs have focused instead on the highest-cost petroleum to get to market. They bought it cheap, because it’s so dirty and land-locked.

Their business-plan (other than diversifying into non-petroleum industries) is simple: Drive their costs to produce their filthy oil down from the existing $75.50 per barrel, in order to make it more competitive (since they own two-thirds of the estimated 874 billion barrels of this stuff).

How can they drive that cost down? Right now, President Barack Obama is negotiating, behind the scenes, through his U.S. Trade Representative, to get Europe to weaken its anti-global-warming standards, so as to enable the world’s dirtiest oil to become more price-competitive.

On 24 September 2013, Kate Sheppard at Huffington Post bannered “Michael Froman, Top U.S. Trade Official, Sides With Tar Sands Advocates,” and she reported that the Obama Administration was threatening Europe with retaliation at the World Trade Organization if Europe didn’t eliminate its distinction between high-CO2 oil and regular oil – between tar-sands-derived oil, and ordinary petroleum. The U.S. Trade Representative told Congress that the issue he had here didn’t concern climate change, but only “inadequate transparency and public participation in the European Commission’s regulatory process.” Then, Sheppard herself asked one of his aides, who simply reiterated that by saying, “The United States shares the EU’s objective of reducing greenhouse gas intensity, but we have raised concerns with respect to inadequate transparency and public participation in the European Commission’s regulatory process.” Sheppard, at least as far as her news report indicated, asked no follow-up question, such as: “‘inadequate’ in what way; and how can you even be talking about that since the issue here is global warming?” So: the President and his Representative have not been confronted publicly on this matter.

Barack Obama’s public statements against global warming were belied by his actions in private, and yet his hirees, such as the U.S. Trade Representative, Michael Froman, formerly a Managing Director of Citigroup, were turning the table and accusing the EU of “inadequate transparency” – as if the future of this planet weren’t the issue, and a vastly more important one.

If President Obama can force Europe to lower their anti-global-warming standards in order to enable the Kochs to export their super-dirty oil to Europe via the Kochs’ Corpus Christi Texas refineries, then a significant portion of the existing cost-disadvantage of the Kochs’ super-dirty oil (as compared to cleaner oil) will be absorbed ultimately by the planet itself, in the form of added global warming. “These refineries have a combined crude oil processing capacity of about 300,000 barrels per day. While one potential purpose of the KXL Pipeline for Koch Industries could be to provide access to Canadian tar sands for its Corpus Christi refineries, this benefit appears relatively insignificant compared to their massive potential profits from producing tar sands crude oil.” (See page 11 there.) In other words: President Obama is negotiating behind the scenes in order to transfer these harms onto everyone else, so that the benefits will go to the Kochs for their having paid dirt-prices for each and every one of the two million acres of tar sands they own. (That’s on page 7.) Consequently, there would be, for the Koch brothers (as stated in the report’s Executive Summary), “$100 billion in potential profits due to KXL.” Their destroying this planet would thus be very profitable for them.

Apparently, this is the business plan that they are so eager to pursue that it’s more attractive to them than simply retiring: Instead of their being each tied with the other as being the6th-wealthiest person on this planet, they’d probably be by far the wealthiest two people of all individuals on Earth. (The report estimates that their joint existing fortune of roughly $80 billion will be enhanced by yet another $100 billion, for a total of $180 billion, or $90 billion apiece.) Apparently, the Kochs are doing this for sheer status. (They couldn’t possibly consume all their wealth even if they wanted to.) It thus seems that their motivation is basically similar to that of their father’s great benefactor, Stalin. His status was based on communist values; theirs is based on fascist values; but the motivation is status, just the same.

And Barack Obama, against whom the Kochs bundled more campaign cash than any other two people, for Mitt Romney and for Republicans in Congress and in the state houses, is fighting against the European Union, in order to assist the Kochs to achieve this, their dream. Perhaps that’s the only thing in this story that doesn’t make sense, but it is certainly the case, up till now. And (if there is another thing that doesn’t make sense) the massively ignorant American public wants them to win.

Obama’s excuse for trying to force Europe to buy the Kochs’ filthy oil might be called ludicrous. However, since this excuse proves that he is a hypocritical liar, and the stakes that are involved here are enormous for the entire world, it is, instead, tragic, if is not outright catastrophic.

Perhaps Obama, too, is chiefly driven by status. Then, all of this insanity on the part of the elite might make sense – in an insane sort of way. Maybe status-addicts are actually the type of people who most tend to rise to the top, anywhere. Hitler, Stalin, Capone, Koch, Obama, Bush: what’s the difference, really, other than their “personality”?

———-

Investigative historian Eric Zuesse is the author, most recently, of They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010and of CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.

Keystone XL southern leg opens – Business – CBC News

Keystone XL southern leg opens – Business – CBC News.

The main portion of the Keystone XL still requires approval from the Obama White House.The main portion of the Keystone XL still requires approval from the Obama White House. (The Associated Press)

The southern portion of TransCanada’s Keystone XL pipeline officially opened on Wednesday, pumping oil from the distribution hub of Cushing, Okla., to refineries on the American Gulf Coast.

Calgary-based TransCanada announced the news on its website Wednesday. At about 10:45 a.m. central time, the Gulf Coast Project began delivering crude oil to the pipeline company’s refining customers.

“This is a very important milestone for TransCanada, our shippers and Gulf Coast refiners who have been waiting for a pipeline to supply oil directly from Cushing,” TransCanada CEO Russ Girling said.

The 783-kilometre stretch of pipeline in the American South cost $2.3 billion to develop and construct. The 36-inch pipeline that can transport as much as 830,000 barrels of oil per day​.

More opposition

The shorter leg will begin transporting on average about 300,000 barrels of oil daily and should end the year at an average of about 520,000 barrels, TransCanada’s Alex Pourbaix said.

TransCanada was trumpeting the opening of the pipeline as a watershed moment on Wednesday, but the company still faces numerous hurdles getting the rest of the Keystone XL pipeline approved.

The remaining portion of the pipeline is still seeking final approval from the U.S. government. When and if it’s completed, it will ship Canadian oil more than 1,800 kilometres from Hardisty, Alta., through six U.S. states to the Gulf of Mexico for refining and export.

Environmentalists have rallied against the project, urging U.S. President Barack Obama to stop its construction. But it’s backers say it will be an economic boom for both countries and reduce North America’s dependence on foreign oil from more hostile parts of the globe.

Jane Kleeb, of Bold Nebraska, a group that has opposed the Keystone pipeline, said the Gulf Coast segment presented a “huge risk” to people along the route noting problems flagged by the federal pipeline regulator during construction.

“Citizens are watching this pipeline like a hawk,” Kleeb vowed.

Oil prices rose

Oil prices were boosted by the opening of the southern leg of the Keystone pipeline.

Benchmark West Texas Intermediate crude for March delivery rose $1.76, or 1.9 per cent, to close at $96.73 US a barrel on the New York Mercantile Exchange. Oil last closed above $96 a barrel on Dec. 31.

Brent crude, used to set prices for international varieties of crude, gained $1.54, or 1.4 per cent, to US$108.27 on the ICE Futures exchange in London. Meanwhile, natural gas futures shot up almost six per cent as temperatures in many parts of the U.S. Northeast dropped well below freezing and strong demand tapped the region’s supplies of natural gas.

Northern Gateway pipeline report draws lawsuit – British Columbia – CBC News

Northern Gateway pipeline report draws lawsuit – British Columbia – CBC News.

A coalition of B.C. environmentalists is worried about the pipeline's impact on the northern environment, and says the Joint Review Panel report recommending approval for the pipeline is flawed.A coalition of B.C. environmentalists is worried about the pipeline’s impact on the northern environment, and says the Joint Review Panel report recommending approval for the pipeline is flawed. (CBC)

A coalition of environment groups has filed a lawsuit in Federal Court alleging serious flaws with the Joint Review Panel’s final report that recommended the pipeline be approved because “Canadians will be better off with this project than without it.”

The group is seeking a court order to prevent the federal cabinet from acting on the panel’s report to approve the proposed pipeline.

Ecojustice lawyers representing ForestEthics Advocacy, the Living Oceans Society and the Raincoast Conservation Foundation allege the Joint Review Panel’s 419-page report contains legal errors and that its approval is based on insufficient evidence.

“The JRP did not have enough evidence to support its conclusion that the Northern Gateway pipeline would not have significant adverse effects on certain aspects of the environment,” said Ecojustice staff lawyer Karen Campbell, in a statement released on Friday.

“The panel made its recommendation despite known gaps in the evidence, particularly missing information about the risk of geohazards along the pipeline route and what happens to diluted bitumen when it is spilled in the marine environment.”

Serious flaws alleged

In its lawsuit, the environmental coalition says the panel concluded that diluted bitumen is unlikely to sink in an ocean environment even though it says a federal study released earlier this week suggests otherwise.

The lawyers say the review panel did not consider the federal recovery strategy for Pacific humpback whales, whose critical habitat overlaps with the proposed tanker route, or identify mitigation measures for caribou populations.

The lawsuit also alleges the panel refused to consider the environmental impacts of upstream oilsands development and permits Enbridge to assess landslide risks during instead of before construction.

Northern Gateway pipeline politicsPipeline construction is currently awaiting cabinet approval, which is expected sometime within the next six months. (CBC)

Ecojustice says the battle over Northern Gateway is about more than just one pipeline project. Campbell says it’s the epicentre of the debate over Canada’s energy future and Canada needs to get it right.

“There is simply too much at stake. Any decision about Northern Gateway must be based on the best available science. That’s why the panel’s incomplete and flawed report cannot stand as the final word on whether Northern Gateway is in the national interest,” says Campbell in the release.

A cabinet decision on whether to accept the panel’s recommendation and approve the pipeline is expected sometime in the next six months.

Under the new environmental assessment framework contained in the 2012 spring omnibus budget bill, cabinet has final decision-making power over Northern Gateway but is bound by the 209 conditions laid out in the Joint Review Panel report.

Time for Obama to make up his mind on Keystone XL, Baird says – Politics – CBC News

Time for Obama to make up his mind on Keystone XL, Baird says – Politics – CBC News.

Foreign Affairs Minister John Baird used the first day of a Washington visit to repeatedly call for a prompt decision on the Keystone XL pipeline.
Foreign Affairs Minister John Baird used the first day of a Washington visit to repeatedly call for a prompt decision on the Keystone XL pipeline. (Fred Chartrand/The Canadian Press)

Nanos Number: pipeline politics

Nanos Number: pipeline politics 6:52

In an attempt to press the Obama administration on its own turf, Foreign Affairs Minister John Baird used the first day of a Washington visit to repeatedly call for a prompt decision on the Keystone XL pipeline.

He buttressed his case by making public appearances Wednesday with two pro-Keystone Democratic senators, who both expressed frustration with how long the administration has dragged out the decision.

Baird offered a snappy reply when asked if there’s anything pro-Keystone politicians on either side of the border could still say or do to influence a debate that has been going on for years.

“One politician — the president of the United States — can say yes to a great project to create jobs on both sides of the border, help with energy independence and energy security,” Baird replied, drawing a chuckle from the lawmaker next to him, Democratic Sen. Heidi Heitkamp of North Dakota.

“Decision time is upon us.”

He repeated the “decision time” phrase on three separate occasions at two public appearances Wednesday, making increasingly clear the Canadian government’s frustration over the prolonged approval process.

Baird held a half-dozen meetings on Capitol Hill and several other get-togethers throughout the day.

His two media appearances — both with pro-Keystone lawmakers from the president’s party — allowed them to air their own feelings.

It’s in our economic, national security & energy interests to approve #KeystoneXL & continue to build an#alloftheabove energy strategy

— Sen. Heidi Heitkamp (@SenatorHeitkamp) January 15, 2014

“I will tell you the frustration that many of us have,” said Heitkamp.

“It has taken us longer to make a decision than it took us to defeat Hitler in the Second World War.”

‘Weeks’ until environmental review

Prime Minister Stephen Harper said Canada would not take “no for an answer” until the Alberta-to-Texas pipeline is approved, last fall in New York. More recently, he suggested the U.S. president had “punted” a politically uncomfortable dilemma by adding additional steps to the regulatory process.

When asked how soon he expected a decision, Baird said the ongoing environmental review by the State Department could be completed and released “in the coming weeks,” soon after this month’s state of the union address.

After that, he said, a decision could be announced quickly.

He delivered a similar message during a meeting with Louisiana’s Mary Landrieu, touted as the likely next chair of the Senate energy committee.

#KXL is the right thing for our economy and strengthens our energy security. I’ll continue to push Admin to approve#Keystone pipeline

— Senator Landrieu (@SenLandrieu) January 15, 2014

With media invited into the meeting, she sympathetically placed a hand on Baird’s as she shared her regrets about how long the process had taken.

Landrieu, who faces a difficult re-election fight, said the project was popular in her state.

They used that public meeting to inform U.S. reporters that Canada has the same greenhouse-gas standards as the U.S., the same vehicle-emissions standards, and has done more to phase out coal.

Baird also met with U.S. Senator Bob Corker who posted a picture of his meeting with the foreign affairs minister after his approval of the controversial Keystone XL pipeline.

#KeystoneXL will create jobs, expand access to North American energy and strengthen ties with Canada, our largest trading partner. -BC

— Senator Bob Corker (@SenBobCorker) January 15, 2014

During his three-day trip, Baird also has meetings with Secretary of State John Kerry, National Security Advisor Susan Rice and several think-tanks.

He’s also scheduled to speak Thursday to business leaders.

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