We told you so. Willis Eschenbach pointed out weeks ago how pointless and futile the McKibben driven 350.org protests about the XL pipeline were, because they did nothing to alter the fact that the oil would still be used, somewhere. See The Only Choice Is Where It Gets Burned
I mentioned in an essay Friday that:
Dr. Christy ended his essay with the title of this post saying “Don’t demonize energy, because without energy, life is brutal and short”….I thought those were good words to consider, especially since we have activist maniacs like weepy Bill McKibben out to demonize energy on a daily basis. McKibben and his followers, not possessing the intelligence to fully understand what they are doing, think “they won“.
Bottom line: that tar sands oil is going to be burned somewhere, in other countries willing to buy it. Stopping a pipeline has no effect on Canada’s export of the oil, only on American jobs, but McKibben and his 350.org is cluelessly ecstatic over this.
Looks like we were right, only one day later, Canada looks to sell the tar sands oil to China. From Energy Daily:
Canadian Prime Minister Stephen Harper said Sunday that he was looking at exporting more oil to China after the United States delayed a decision on a controversial pipeline.
The conservative Canadian leader, taking part in a summit in Hawaii hosted by Obama said the pipeline decision had produced “extremely negative reactions” and that he discussed oil exports with Chinese President Hu Jintao.
“This does underscore the necessity of Canada making sure that we are able to access Asian markets for our energy products,” Harper told reporters. “I indicated that yesterday (Saturday) to President Hu of China.”
Full story at Energy Daily.
McKibben’s goal of stopping the XL pipeline did nothing but hurt the United States and will have zero a net positive* effect on CO2 emissions from it. He’s not even a useful idiot.
*Update: Commenter Mark W points out that: Actually, this move will increase CO2 production, as it will take more energy to move that oil all the way to China
He’s right.
The irony of a “have” telling the “have nots” why they necessarily should have not was not lost on the people there. Suzuki did the same thing in Vancouver at the occupy rally. Poor judgment and revealing. Dennis Moore? (clue MPFC)
So instead of making a mere $10/barrel now Canada will be able to make above $100/barrel… sounds like good news for Canada.
Anthony,
Thanks for staying on this issue, it needs to be exposed.
As I mentioned before, I worked on the start up of a major oil sands project over 30 years ago and it was a challenge getting all the upgrading units started up not to mention the challenge of minus 40 F.
Minor point, it should be called “oil” sands not tar sands to avoid the negative connotation that the oil haters wish to portray re this massive oil resource.
Don’t worry folks, this is all just strategy on us Canucks part. OK, we’re lucking out here, but we’ll claim it is a strategy. Or at least I will. OK, so its not a strategy at all, its just luck.
1. There’s enough oil in the Canadian oil sands and shale deposits for everyone. We can supply China and the US and Europe too for that matter. Its just a matter of getting it from where it is to where it needs to go.
2. So we’re gonna get China to pay for the pipeline to the coast. Please, don’t any of you tell them that from the coast it has to be put on supertankers to get to China. Of course, if someone else has a supertanker hanging around, and enough cash, we’ll fill that one up too. Ships don’t have to go to China, my understanding of this whole ocean thingy is that they can go anywhere there is a port that can unload them. Where are those refineries in the US again? Any in Texas? Does Texas have any ports?
3. Once China is locked in on paying for our pipeline to the coast, the American 2012 election will be over. If the Obama loses, I’m certain the new President will approve the north-south pipeline in nothing flat. If Obama loses on the other hand…. he’ll wait a few weeks before sucker punching his loyal voters and approve the pipeline.
My only concern is that at the rate the United States is borrowing money from China, will the U.S. have enough credit left to be able to borrow the money from Chiina to build the north-south pipeline. I’ve heard that China is actually in favour of a north-south pipeline that is extended to the coast. Seems they have this idea that the U.S. may want to shut down their refineries because they cause jobs…err, oops, I mean they cause pollution. So, they’ll pick up the oil from Canada, ship it to China to refine it, and then instead of sending empty supertankers back, they can send gasoline instead, offloading it to the pipeline headed for the U.S. and pick up more crude at the same time.
A number of commenters have wondered why Canada exports crude instead of refining it, or using the energy to manufacture finished good.
The reason is the impact of resource exports on foreign exchange rates.
Exporting resources drives up the value of your dollar, which drives down the price of goods and services purchased from other countries, making it cheaper to do the value add outside Canada.
Of course, the Canadian Government could offset this natural disadvantage for non resource businesses, by using the export earnings to eliminate domestic taxes – the way they do in the Middle East. But this would mean shrinking the government, ditching vast numbers of useless civil servants, and drastic cutbacks to lazy vote buying policies at election time.
Most Americans are at a loss for words over this decision by our great leader-me too!
Actually China may not want the oil. A huge oil field with ~80 % Saudi Arabia’s initial reserves has been found in the South China Sea with China claiming sovereignty over the majority although significant areas are off Vietnam. Of course at this stage this is probably a gross underestimation.
It is interesting that despite the gloomy forecasts the supply of fossil fuels seems to keep finding ways to surprise us.
First huge resources of gas are being discovered on the back of new technologies as well as new oil discoveries.
Wouldn’t it be interesting if Tommy Gold was right and these aren’t fossil fuels after all but formed in the crust of the Earth where limestone is subjected to heat, pressure and chemical effects ?
It wouldn’t be the first time an intelligent individual was proven right despite the “consensus” dogma – history is littered with examples – otherwise medicine’s finest treatment may still be leaches.
Micro-organisms ? – Don’t be silly.
Its not “tar sands”. They are “bituminous sands”. Oil sands is not correct, either, but much closer than “tar sands”. Tar is a totally diferent chemical composition, and made from totally different sources.
CO2 may NOT go up, sending the oil to China. To transport by large tanker takes about 0.2 HP per net tonne. For rail, its 2.5 HP. Pipelines have similar HP needs, but as the traffic on a pipeline is only one way, it would be less than rail (the train usually goes back empty, doubling the miles travelled). By water is cheaper, as long as the distance is less than 10 times the length of the pipeline. At a guess, with a pipeline to BC and the extra handling and other factors, the CO2 made transporting to China will be about the same as going to Texas, or maybe a little more.
But the problem will be Pipeline capacity will be at its limit in 2014 or 2015. This will drop the price of Canadian oil by up to $10/bbl, or more, that can’t get in the pipeline. This will equate to nearly 10 billion dollars out of the Alberta economy per year.
Supply and demand drops the price of the oil. Not S&D of the oil, but supply and demand of pipeline space. Lack of space causes an increase in supply of oil at the pipeline intake. The greater the supply, the lower the price. Not at the outlet, of course, just at the inlet. The outlet price will still be the global price. The pipeline company gets the difference.
But, at 10-20 bucks a bbl, it becomes economical to use trains. To ship 600,000 bbls a day via trains, you will need about 10 unit trains (100 cars with 60,000 bbls total cargo). But, you will need 3 trains there, as it takes two days to get there, and a day to unload and turnaround. So you will have 3 trains there, and 3 coming back, times 10. 60 trains will be needed, to get 600,000 bbls per day moving.
So, yes, CO2 will go up, way up, by a factor of two, but the oil will still get to Texas.
Well done, Weepy Bill, well done.
ps- And the cost of everything else shipped by rail will go up, due to lack of space on the rails. As just about everything travels by rail, that means the price on everything will increase. But only in North America.
But rail equity stocks will be a good investment. And pipeline companies.
Eric Worrall says:
November 14, 2011 at 12:32 pm
Yeah, I don’t see those middle-east oil exporting countries complaining that they must not sell their oil in order to keep their government jobs.
davidmhoffer:
What you have said does make a lot of sense… EXCEPT… it implies, someone very intelligent is really running things. I just don’t see how that can possibly be!! GK
Canadians are quite happy to export the oil – it is just foreign exchange after all. At least the Chinese are solvent and they won’t make us take Bomark missles in exchange for it.
The decision against the Sarnia plant, traditional home to value-added oil in Canada, was crazy. It would have put the entire pipeline inside Canada and almost all the jobs. Are spooks and green fronts agitating the locals? Who knows. It’s geo-oil-politics.
It could have followed the same route as the other pipes so no whining about where it goes and what it crosses. Turns out we even know how to make steel pipe! Who-da thought… Next thing you know we will be making welding rods and cars.
Newfies in Alberta: Yeah dat’s a some fine wage you got up dere and you look good in a Pook Toque too! Real Canadians working really hard and we t’anks ya for it.
You don’t want our oil? Fine. You are our friends, so we gave you first dibs, but if you don’t want it, someone else will. Hope we have some for you when you need it…
We in Canada are getting tired of American Eco-Imperialists trying to force their policy options on us. Now that Keystone is at least delayed, these same folks will turn to trying to kill the Northern Gateway proposal to move that oil to the West Coast for shipping to Asia. They will use the Tides Canada foundation to fund the protesters and will supply organizational assistance. Tides Canada gets its funding from billion dollar American foundations set up by tycoons who have already made their riches.
if you take Mckibbens on face value, he and his ilk make no sense. They vilify even those trying to be green! But if you look beneath their rhetoric to their real motives it makes a lot of sense. They are not out to make the planet better – they are out to erradicate man as a part of the planet.
Took me about two minutes to find a great example of a typical extraction site.
See here in google maps: http://g.co/maps/bxpd7
You may need to switch to satellite mode to see it.
Of course I *was* looking in Virginia not Alberta. And it is Coal not Tar Sands…
this post seems to be saying that if your neighbor wants to dump his slop in your yard you should let him because if you don’t he’s just going to let it run into the street, and then someone loses the opportunity to get paid for doing the dumping, and the slop is going to end up in your water supply no matter what.
Thankfully, as foreseen by the (C)AGW prophesiers, the Arctic Ocean will soon be free of sea ice, at least for most of the year. Thus no long pipelines are needed, they can just ship it to China in supertankers across the open Arctic waters, and soon the Chinese will be releasing lots more carbon emissions to continue transforming the Earth into a warm and slightly-wetter paradise, courtesy of Canada and McKibben. What could go wrong?
Jeff Grantham says: November 14, 2011 at 2:03 pm
“Slop”? That is probably the most assinine analogy to have ever been posted here.
Upgrading or refining in Alberta has some merits, but as a rule of thumb is twice as expensive as doing it in the US (brownfield expansion), and four times as expensive as building in Asia (witness recent Reliance refinery in India). tough to spend the extra several billion and wait five plus years, for little added return.
So the idea of the greens is that we will only use renewable energy.
Ok then so we have electric cars and trucks.
How are these machines to be lubricated?
Whale oil anyone?
http://www.canada.com/business/Grasslands+activism+helped+shoot+Keystone+saddle/5698317/story.html
Note the mercantilist approach of pushing people around, the activist methods, and the name McKibben.@ur momisugly
An interesting note about transporting Alberta crude to the west coast ports…
The major shareholder in Canadian National Railway is now BILL GATES who holds a controlling interest.
One wonders if he invested in order to control the possibility that Canada would begin to sell Alberta Oil Sands petroleum to China. Getting oil to China you need a pipeline to the West Coast or… trains hauling oil.
It is not just this delay to Keystone, it is the idea that next year there will be another delay, and another …
As Harper said, it “underscores” Canada’s requirement to secure non-US customers for our oil. More tankers will run aground etc. because Hansen, Gore and Suzuki have been successful in protecting an acquifer that wasn’t in danger, and pure prairie vistas for the cowboys in Ford trucks.
NIMBY is at the bottom of it all.
But Canada will gain, ultimately, as availability of alternate customers always drives up the price of a product.
The US needs a Stupid tax for anyone on Hansen’s/Gore’s distribution lists.
Patrick, the Tides Foundation has been active for some years in BC, spreading around the baksheesh. In the most recent municipal elections, they bought themselves the Mayor of Vancouver. Tides was his largest campaign contributor.
And they’ve been dumping money into the Dene alliance for years. That’s a key reason why the Dene, alone among the aboriginal groups, held out in opposition against the McKenzie pipeline.
So yes, we are all getting a bit tired of US eco-imperialism. Our own home grown fanatics are troublesome enough (come on down Dizzy Lizzy May).
The Chinese are laughing at America’s stupidity. The lunacy in the U.S. is almost as ridiculous as the German pledge to shut down their nuclear fleet. Vladimir Putin wants to know where Europe is going to get the firewood they’re eventually going to need to stay warm in the winter. If McKibben and the nutjobs keep it up, they’ll have half of New England burning wood for heat.