Pipeline a-bust?

Reports from Reuters and the Wall Street Journal claim that the White House is about to refuse permitting of the Keystone XL pipeline from Alberta to Texas. The reports also state the White House will permit TransCanada to reapply for the permit to a redrawn pipeline avoiding the Nebraska aquifers. Okay unsurprising decision by the Obama administration on this one. Realizing that some of Obama’s donors and staunchest supporters are tree-hugging, scorched-earth theorists hippies, the administration seems to be speeding up the regulatory process in preparation for the up-coming presidential election later this year. Mind you these are un-confirmed reports so far, yet reports we are sure at the very least represent Obama’s views regarding hydrocarbons in general.

Now the public reason for such a potential refusal would be to save the Nebraska aquifers which serve as the tap and drinking water of millions of inhabitants of the region. The political reason for such a refusal is the belief that Canadian Oil Sands, or Tar-Sands as the green mouvement calls them, are the dirtiest oil sources one can find and developing them imperils the global environment. Let’s adress these two issues shall we.

Regarding the fear of contaminated water and soils in Nebraska. I’ll admit that I understand it. I wouldn’t particularly like a big oil pipeline crossing my backyard either, especially given Enbridges pipeline leak in Michigan last year and the Gulf of Mexico Macondo well spill calamity of 2010. Now that would be my gut feeling reflexive reactionary thoughts right there. However my brain would eventually kick in and my train of thought would go somewhere along the lines of: Hey! no pipelines were involved in the GoM oil spill, serious case of apple and oranges comparisons going here. What of the Enbridge pipeline spill in a Michigan river? Well it was one of the first large scale spills in a long time to actually get reported on, why so? Apparently a little research reveals that pipelines have better safety records than airplanes do, who in turn have better safety records than cars. As I eye my own vehicle suspiciously after these thoughts, my mind turns back to the issue at hand. The over 3000 km Keystone XL project was only slated to increase the total US pipeline gride by ~1%. Much of the US pipeline grid is old and in need of replacing. Furthermore it is overstretched capacity is running at maximum on much of the grids routes. I am only speculating here but wouldn’t it be better if we  switched some of the oil flow from old decaying infrastructure to the most up to date technology in pipeline safety design? I’ll let the engineers answer that one but the answer seems quite self-evident.

Now assuming for a moment that the project never goes forward, what would be some of the easily identifiable consequences. One of the gravest consequences from an American perspective that I can think of would be increased dangers of oil spills. What was that? you say. Well, the most rapidly expanding production of oil in North America isn’t actually the Oil-Sands right now, it’s actually the Bakken oil fields in North Dakota. How does the oil from ND make its way to US refineries in the Mid-West or Texas you may ask yourself, the answer is by train. Oil from that region which could have been transported by Keystone XL or an attachment to the latter, is transported by freight-train hauling. If you’d ever looked up the safety record of freight-trains on Google you’d be a hell of a lot more worried than by pipeline trust me. Spilling petrochemicals from freight-train accidents are virtually a yearly norm in Canada where our two main freight-train companies have some of the best safety records in all of the Americas. But hey! suit yourself Obama. (In his defence it’s probably the EPA’s fault for being unable to study collateral benefits and consequences of their decisions)

Now let us look at the issue from a more global perspective, something the greenies claim to do. If Keystone XL doesn’t go through the most likely outcome will be the permitting of Enbridge’s Northern Gateway pipeline to the Pacific port of Kitimat. The result of that wold be simply increased CO2 emissions on a global level. How do we get to that conclusion? Firstly the oil will have to be transported to China or other regional industrial countries by super-tankers. No matter how efficient they’ve become over the years they don’t beat pipeline in terms of efficiency. Especially given that the distance travelled will be twice as long. Now we talk about the US being the biggest polluter in the world and China running a close second. A little detail forgotten quite often is that of efficiency per emissions. For virtually the same consumption of energy and pollutant emissions the US generates roughly three times more output (wealth), let’s not even broach the per capita quagmire. So Canada will have to send  the crude oil to be refined in some of the least environmentally efficient refineries in the world.

All this to say how can the best intentions in the world (save the planet from apparent environmental Armageddon) always lead to a worse outcome (more spills, more emissions and more deadweight loss: less global wealth). Mister Obama please think wisely before caving in to your green lobby please.

P.S. Since I now have to go to class I’ll leave aside talk of Canada’s Oil sands being all that dirty a point I’ll refute next time!

P.P.S. Leave comments, argue, get mad, it’s the internet there are thankfully no fist-fights to be had here 🙂