GAIA
The Keystone XL
Pipeline will, in all likelihood, not be built.
Pressure from US environmentalists is growing by the day as small leaks
in existing pipelines hit the media and irrational panic sets in.
I too am against the
XL line, but for different, nationalistic reasons.
I am Canadian and wish
for Canada’s oil industry to continue – not die out with a whimper in 5 to 10
years!
Yes, the Alberta tar
sands hold an estimated 169 billion barrels of recoverable oil – the second
largest pool on earth at present, but our prime customer, the USA, will soon be
self-sufficient without any need for outside oil, and it will become a net
exporter.
When that happens – in
the next 5 years or so -- an XL pipeline
will no longer bring Albert’s heavy and still unprocessed crude to the southern
USA refining hub, but the reverse will take place: refined and MUCH CHEAPER US oil would flow
northward on the XL and other, already existing lines.
The laws of economics
would rule, and Canadian oil distributors would automatically choose the
cheaper, already processed US product!
So any oil industry
benefit to Alberta – even if the XL were built quickly within 2 years – would
have a ‘lifetime’ of no more than 3 years or so. Thereafter, the oil will flow upstream!
If you think I am
exaggerating and just repeating what I said in an earlier blog, yesterday’s
news clinches it.
According to the Globe
and Mail, April 17, B1&B9 “The new heart of U.S. oil renaissance
– and one more threat to the oil sands” Texas is awash in new oil.
West Texas, which has
been pumping oil since the 1920s and is the industry’s standard price setting benchmark --i.e., sweet/light
crude which is readily – and cheaply – converted into gasoline, has just made
public that it holds another 70 billion barrels of recoverable oil using
new technology. And according to the
Globe source, that oil would be profitable at US$70.00!
That is well below
what West Texas crude has been selling for in years!!!
So what should Canada
and Alberta and the tar sands people do out of self-interest and long term
survival?
1. Abandon the fight
on the XL. It would make money for its
builders but not long for the above three parties who do not do pipe building for
a living.
2. In partnership, the
tar sands companies, Alberta government and Canadian government should build a
complete refining hub in Alberta, so that our tar/oil is not dependent on US
plants to make the material into something useful to sell. If we still need to send the semi-processed
tar half a continent away, oh how costly it would become. US refineries would
easily be at full capacity with local US crude and we would have to make it ‘worth
their while’ to bump us into the line.
3. Forget a pipeline
to the British Columbia coast. The newly
elected BC government is made of tree huggers and many native tribes along any
proposed route are similar luddites.
4. Hook Alberta into
the pipelines of Eastern Canada and the refineries of Sarnia and further east
-- at least in the short term. East of the Manitoba border we respect cars, trucks,
commuting, asphalt (oil based) roads, synthetic plastics and material (made
from crude oil) and manufacturing jobs; and are willing to make a reasonable
(low risk) trade off to maintain our high standard of living and future.
5. If Global Warming
is for real, then in 5 years time or so it will be viable to ship oil, natural
gas, etc. from Canada’s north to willing customers in East Asia such as Japan, China
and India. So, plan to upgrade our
Arctic ports.
NOTE: While it has become politically correct to
call Alberta tar sands “oil sands”, I beg to differ and keep the original wording
used for decades, the one that is chemically correct. You need to do a lot of chemical processing
to turn that black, sticky goo into ‘crude oil’.