February 11, 2015

Needed: A "grand bargain" on #KeystoneXL

I'm on record on this blog as opposing the Keystone pipeline as a stand-alone piece of legislation. I have posted about the myths of job creation that won't happen, and other things.

At the same time, I'm also on record about the fact that Canada's going to export tar sands oil from Alberta (as long as its profitable, and there's debate about the break-even oil price for it), and if it doesn't do it by pipeline into the U.S., it's going to do it by rail. That's even more carbon-negative, and, although pipelines still leak now, it's also potentially worse on spill effects, if there is a train crash. It also ties up U.S. rail lines, delaying harvested crops in the summer, manufactured goods and more.

I just heard somebody from the National Resources Defense Council (a Gang Green environmental group), Susan Casey-Lefkowitz, claim on NPR that no tar sands oil is coming from Canada by rail. Well, we know that fracked oil from Canada — and at least a bit of tar sands oil — is entering the US by rail. And, that's from 360Yale, very respected in the environmental world.

Will the US Dept. of Transportation succeed in replacing old
DOT-111 tank cars with better ones? Rick Wilking/Reuters
Now, per that link, whether this means "resistance is futile" or not is an open question. It does mean that at least one Gang Green group isn't being totally honest.

The rest of that link is good reading. It notes that tar sands/bitumen has to be treated either for tank car or pipeline shipping. It notes that this means that the amount of tar sand oil via rail is limited right now, and that this bottleneck (article is a bit over a year old) depresses tar sands oil prices.

But, if more tank cars are built, and of a theoretically safer upgraded version of the DOT-111, that bottleneck may at least be lessened. Since oil prices are so depressed in general right now, contra that December 2013 article, it's really no big deal if it takes another 12-18 months from today for a lot of new tank cars to come online.

And, the US Department of Transportation, in conjunction with Canadian counterparts, has released a new safety proposal. Stand by to see if this becomes an official requirement.

Related: The explosive West Virginia train derailment last week involved newer, safer tank cars. Update: So did an early March accident in Illinois.

More here, on a specific project for tar-sands rail transport. This story, from just last October, also documents snafus and problems. But, per the Yale piece, while not saying resistance is futile, the environmental world should consider at least the possibility that, when oil prices rebound, the rail bottleneck will be at least a little bit lessened, and that oil companies will work on lessening it more.

Anyway, yes, it's not a lot. It's not a lot more than a blip. But it's more than nothing, and Ms. Casey-Lefkowitz specifically said "nothing" and also claimed that Marsha McNutt, a member of the National Academy of Sciences, who had changed her stance on KeystoneXL because of the rail issue, was flat-out wrong.

Ms. Casey-Lefkowitz owes an apology, but probably won't be forthcoming.

Also contra her and some other last-ditchers, one intra-Canadian pipeline, to greater Montreal, has already gotten Canadian approval. And, TransCanada is pushing ahead with plans to build a pipeline going the other way from Keystone — connecting Bakken oil to a trans-Canadian line.

And, our own Dear Leader approved Keystone South back in 2012, and it opened for business last year. To some degree, per that link, continuing to fight KeystoneXL now is an issue of barn doors and horses.

Such bending of honesty, along with Gang Green groups themselves adding to the carbon problem through things such as massive passing out of made-in-China stuffed plushes, is why I stopped giving them money.

I discussed some of this (with less detail, and with skepticism about President Obama's backbone) two months ago.

That said, per the graphic at left, right now, it's definitely unprofitable to mine for tar sands. And, contra former Texas Speaker of the House Tom Craddick, and perhaps contra claims that $45 is the break-even point here in Texas, as I previously blogged, right now, it's borderline unprofitable to be producing oil here in Texas, unless it's what's left in conventional plays.

That graphic comes from "the letter O" in an A-to-Z encyclopedia of the current oil situation from Canada's newsmagazine, Maclean's. The whole encyclopedia is well worth a read.

Finally, even before Paul Krugman tumbled on to it, I said in these spaces that, as I understood it, World Trade Organization rules allowed a carbon tariff on imports from other countries, as long as a country had a carbon tax on domestic manufacturing, shipping, etc., that was at least as high. Click the carbon tax tag if you don't believe me about how long I've been mentioning it; my first post with the phrase was back in 2009.

Well, now that the new House has joined the Senate and passed a Keystone bill with a large, yet still veto-short majority, here's that grand compromise.

Obama tells Congress, after vetoing this bill, that he's sign a Keystone bill that's got a carbon tax and tariff attached.  And, since tar sand oil is more carbon-dirty than some other oils, this puts an extra price on it, and probably more of an extra price than what's paid now with shipping it by rail instead of pipe.

That said, the hypocrisy of Texas Gov. Greg Abbott supporting Keystone XL because it will provide not just jobs, but UNION jobs has to be in the neighborhood of a new hypocrisy high from him. We all know that it will only provide a few dozen permanent jobs, and even the temporary jobs will likely be far short of the 42,000 the State Department predicts.

Hey, Greg, if you really about union jobs, why don't you discuss worker safety at refineries — refineries that will be handling Keystone oil, among others?

Of course, this is Washington DC. Most of the House GOP and a fair amount of the Senate GOP are wingnuts, while Obama wouldn't know a bold political idea if it hit him in the face. (Or hit his TelePrompTer — snark alert.)

Meanwhile, short of, and shortly after, Obama's presumed veto, what will be happening on oil prices? See the poll at right to cast your vote on where you think West Texas Intermediate will be on March 31.


Bill Hurley said...

You might want to think about helping the Citizens Climate Lobby (in San Antonio, contact billhurley33@gmail.com or psmorehouse@yahoo.com) - that national organization has tryed to pass the Climate Fee & Dividend (pretty much what you favor) since 2007 (think...))

Anyway, we're meeting at BIll Hurleys on March 12 if you're interested...

Gadfly said...

I'd like to be there ... I am about 300 miles away though ...