Despite environmentalist protests, President Obama is about ready to approve the “jobs creating” Keystone XL pipeline. TransCanada Corporation, the project owner, estimates that 20,000 jobs can be created from the pipeline itself over the two-year project development period. There are other jobs associated with development of the resource in Canada that have economic impacts on U.S. employment. So, with that in mind, let’s look at the Keystone XL pipeline, and at Canadian oil sands.
The Keystone XL Pipeline Project
The State Department is responsible for issuing permits for cross-border pipelines. Oil sands opponents, however, are pressuring the State Department to oppose the proposed Keystone XL pipeline, and are encouraging residents along its intended route to oppose the project based on unrelated issues, such as eminent domain and potential impact to aquifers. The Keystone XL pipeline will ensure a supply of Canadian crude to U.S. refineries on the Gulf Coast. Only refineries in the Midwest and Rocky Mountain regions rely upon Canadian crude. This link provides a map of the Keystone XL pipeline and its proposed expansion.
Measures restricting the use of oil sands products would not limit oil sands production, but cause output to be diverted to more distant markets. For example, China, with a growing appetite for oil, is ready to spend the dollars for a piece of Canada’s oil sands. Alberta, Canada, has more oil than Russia or Iran. Only Saudi Arabia and Venezuela have more. Canada’s only major oil export market is the U.S., but with oil sands and pipeline delivery to the U.S. under environmental objections, and with Asian demand growing, Canada wants to diversify its market, and China is eager to oblige. Sinopec, a Chinese state-controlled oil company, has a stake in a $5.5 billion plan drawn up by the Alberta-based Enbridge company to build the Northern Gateway Pipeline from Alberta to the Pacific coast province of British Columbia. Besides having a stake in the $5.5 billion in the Northern Gateway pipeline plan, Sinopec paid $4.6 billion for a nine percent stake in Syncrude, Canada’s largest oil sands project. And in 2009 PetroChina, Asia’s largest oil and gas company, bought a $1.7 billion stake in Athabasca (also in Canada) Oil Sands Corp.
In a further, political wrinkle, the Koch brothers are poised to reap big profits if the Keystone XL pipeline is approved. The Koch brothers have been accused of “waging a war against Obama.” They have financed the Tea Party movement, climate change skepticism and right-wing think tanks, such as the Cato Institute, the Heritage Foundation, the Competitive Enterprise Institute and the National Center for Policy Analysis. BTW, Rich Mitchell at CDN sarcasticlly had this to say about Obama and the Koch brothers: “Oh Mr. Collinson (which would be such a great name if your first name was Collin), you can’t blame Libya on Obama, clearly the Koch brothers, Bush, or George Washington are to blame.” And from a CDN press release we learn, “Chief among those who are pushing conservatives in Congress to drop their support for the NAT GAS Act are the Koch brothers. Charles Koch has been loudly vocalizing his opposition to the misguided suggestion that the natural-gas industry should receive enormous new subsidies.”
Canadian Oil Sand, its Extraction, and its Refining
Oil sand is a naturally occurring mixture of sand, clay or other minerals, water and bitumen (a mixture of hydrocarbons, often together with their nonmetallic derivatives that occur naturally), which is a heavy and extremely viscous oil that must be treated before it can be used by refineries to produce usable fuels such as gasoline and diesel. This link provides a picture of oil sand, as well as further information.
From the government of Alberta, Canada, we learn:
- There are 170.4 billion barrels of recoverable oil in the oil sands deposits of Northern Alberta. There are 315 billion barrels of potentially recoverable oil in the oil sands.
- Roughly 500 km of the 140,000 km oil sands deposit in Northern Alberta is currently undergoing surface mining activity. Oil sands within 75 meters of the surface are mined using electric and hydraulic shovels. “In situ” (in the natural or original position or place) recovery is used for bitumen deposits buried too deeply for mining to be practical. Most in situ bitumen and heavy oil production comes from deposits buried more than 350-600 meters below the surface. Steam, solvents or thermal energy make the bitumen flow to the point that it can be pumped by a well to the surface. Cyclic steam stimulation (CSS) and steam-assisted gravity drainage (SAGD) are effective in situ recovery methods.
- About two tons of oil sands must be dug up, moved and processed to produce one barrel of synthetic crude oil (SCO).
- The process of reclaiming the land differs depending on what types of activity took place on the land. For mined sands, sand and sediment from tailings ponds (sand, clay, etc.) must be returned to the pit in order to even out contours in the land that resulted from the removal of oil sand deposits. Overburden (soil and organic material) that was stored at the beginning of the operation is placed over the sand and sediment layer. Special care is taken to ensure that overburden is not contaminated during the storage period so that it can be replaced as soon as the mining operation concludes. For in suti operations which do not disturb the environment, reclamation activities are often faster and easier. Once reclamation is complete, projects undergo a strict regulatory and environmental review that can take a significant amount of time in order to ensure that the land has been returned to its original state. When the site satisfies the regulatory bodies, a Certificate of Reclamation is issued by Alberta Environment.
Canada’s oil sands is called dirty oil because of the huge volumes of natural gas required to extract and refine it About 1,000 cubic feet of natural gas is burned for every barrel of bitumen produced from an in situ project. After that, another 400 cubic feet is put through a steam methane reforming process to produce hydrogen, which is required to upgrade the bitumen into a kind of synthetic crude that shares the same characteristics of conventional light oil. For every single unit of energy that goes in, most of it in the form of natural gas, you get only five units of energy out. Conventional oil, by comparison, gives an energy return of more than 10 to 1. For this reason, the carbon footprint of oil sand-based petroleum products is much larger compared to conventional oil, and it is called dirty oil.
BTW, for your reading pleasure, Jazz Shaw at Hot Air has written an excellent three piece post on Canadian oil sands. Part 1 Part 2 Part 3
Does National Security and Lifestyle Trump Environmental Concerns?
From Robert Kilpatrick at CDN, we learn: “So even if we all drove electric cars, the demand for “to make the hundreds of thousands of products that come from oil” would still be great. Does this administration even have a clue that literally hundreds of thousands, if not millions of jobs are dependent on oil? I don’t think so. Remember, most liberals have this low common-sense I.Q. issue. I don’t even believe our present President understands the consequences of eliminating oil from the American scene!”
Today, over 60% of the oil we consume is imported. Oil, coal and natural gas account for more than 85% of the energy consumed in the U.S. today. Oil accounts for nearly 40% of all energy utilized today. The U.S. currently imports about 23% from Canada, this country’s largest source. Mexico (11.4%), Saudi Arabia (11%), and Venezuela (10.1%) are our next three sources of imported oil – none of these sources are friendly and/or reliable. So the Keystone XL pipeline IS a big deal, from both a strategic national security perspective as well as from a lifestyle perspective. Now that you are armed with (my view of the) facts, you can make up your own mind!
But that’s just my opinion.