Approves Asia Supply Route, Ignores US Route
H/T Eric Worrall and Breitbart – Obama’s inability to make a decision on Keystone has finally yielded a result – Canada has made the decision for him.
Breitbart reports Canada has just approved the Enbridge Northern Gateway Project – a major pipeline to ship Canadian oil to Asia.
The Canadian oil will still be burnt – in Asia, instead of America.
All the jobs and energy security which Canadian oil could have delivered to America, will instead be delivered to Asia.
Rather than purchasing crude from a friendly and allied neighbor, the United States will most likely need to continue its reliance upon hostile sources like Venezuela. Energy analysts had hoped that construction of Keystone could have replaced almost half of the current U.S. daily crude purchases from that volatile, anti-American dictatorship, depriving Venezuela of the resources it relies upon to stay in power and fund its Cuban allies.
You can’t say Canada didn’t give America a chance – they waited years for the American administration to come to their senses. But in the end, they couldn’t wait any longer, and have put the interests of Canadians first.
Below is a helpful timeline of Keystone events, courtesy of Al Jazeera.
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MSM will get a headache ignoring this
Danny V.:
At June 30, 2014 at 7:00 am you ask
They do it to obtain a blend which provides products in proportion to market demand.
A refinery separates crude oil into its component parts for sale. The refinery makes a loss if its obtaining an amount of e.g. petroleum provides too much or too little e.g. benzene. Crude oil from different places contains different proportions of the components. Therefore, blending different crude oils from different places prior to refining can maximize profits from sale of refined products.
Richard
The XL will still get built when Obama leaves office. This just means the Canadian oil will be going to Asia in addition to the US. Don’t forget, there already is an existing Keystone Pipeline that has been pumping oil to us for several years from the same oil sands. The XL will double the amount and then some.
brent says:
June 29, 2014 at 1:12 pm
Look it up yourself. As Willis says, I’m not doing your homework for you. Thankfully, you can no longer get misinformation from “the oil drum”.
By the time any pipeline is built or expanded the flow of crude oil from Alaska to its effective bottleneck in California will be greatly reduced. Thus CA will be competing for Canadian crude oil with the Asians and it will be safer transport than the trains in the mid continent.
A major problem with Trans-Canada pipelines is its dishonesty in using the legal doctrine of “eminent domain”.
That’s an immoral process that violates individual property rights for some claimed common good, but even if it were valid it has been widely abused. (That’s what happends when you give the collective power to initiate force. The Kelo case fought by the Institute of Justice, http://www.ij.org, publicized the process.)
Trans-Canada’s use of that process is one reason their XL expansion of the Keystone pipeline has been blocked.
Er, “Flint, my understanding is that US Gulf Coast refineries want Canadian oil sands crude oil because they are accustomed to processing sands oil from Venezuela, which is politically and economically risky (their production is declining as is inevitable with government control, including because their tech experts are bailing out to places like Calgary).
The challenge with heavy oil is dealing with the bottom of the stack, the heavy components. (There is much work being done in AB to find better ways of processing that bottom. Publisher David Black plans to use a process that produces diesel fuel from that bottom, using natural gas to add hydrogen, for the refinery he wants to build at Kitimat BC.)
As for oil from sands, there is much from an area on the AB/SK border east of Edmonton. It is not as heavy as the Athabaska sands from NNE of Edmonton.
Too many people herein running on assumptions, just like climate alarmists.
Here’s the situation as I understand it:
– The Canadian government approved the Enbridge Northern Gateway project on June 14th.
– TransCanada has not withdrawn its request that the US Administration approve the cross-border segment of Keystone XL.
– The Enbridge pipeline will have to cross First Nations territories to the west, as well as the province of British Columbia. Neither has been a proponent of the project, and approval is not at all guaranteed.
– US gasoline prices are Brent-linked, that is, the international benchmark price based on the output of the UK/Norway North Sea. US gasoline prices are linked to neither WTI (the US benchmark West Texas Intermediate) nor WCS (Western Canadian Select, the Alberta benchmark price). Therefore, neither the construction of the Keystone XL pipeline, nor the failure to do so, is likely to materially influence retail gasoline prices in the US.
– Lifting the US crude export ban could reduce US gasoline prices. US refineries are primarily geared to process heavy crude, that is, crude from places like Canada, Venezuela and Mexico. Shale oil is very light, and not the right fit for Gulf Coast refineries. Therefore, lifting the crude export ban (of which we see small steps forward recently), would allow light and heavy crude to be processed where it can be done so most efficiently, and this could have the effect of reducing US gasoline prices modestly (Yergin says by up to 8 cents a gallon; figure half that in reality).
While I support the construction of the Keystone XL pipeline, I find this article to be materially misleading, and it should be modified accordingly.
Musobama wants to destroy America and is not interested in its wellbeing. He is much preoccupied to help the islamism and the perverts than to preserve the moral standard of this nation for 200 years. He will go down the history as an anti-American president, an enemy of Christianity and of common sense.
@Alexius, could you shorten that? Too many words for the bumper sticker.
The article is woefully incorrect. It is not Ob*ma’s “indecision.” He’s made his decision years ago:
In January, 2008, candidate Ob*ma said: “Under my plan of a cap and trade system, electricity rates would necessarily skyrocket.”
Impeach the traitor. Everything Ob*ma has ever done has been against America’s interest. Now he’s opened the border so the North American Union can become reality and our freedom and the US Constitution distant memories.
Keith, you are correct and that was my point. The US refineries would get business refining the tar sands crude into various products but the product will be exported. I was responding to many of the comments here that incorrectly assumed that the products would be consumed in the United States.
Fuel for the future?
March/April 2014
The provincial government is pushing the long-term potential of Saskatchewan’s oil sands
Saskatchewan’s Minister of Economy Bill Boyd travelled to London in November to muster European interest and investment in the province’s as yet undeveloped billion-barrel oil sands reserves.
Speaking at the Canada Europe Energy Summit, Boyd pitched the opportunity that the estimated 1.2 to 2.3 billion barrels of oil locked up in the province’s northwest represent for long-term investors.
http://magazine.cim.org/en/2014/March-April/special-report/Fuel-for-the-future.aspx
Hope lives for Saskatchewan oil sands
http://business.financialpost.com/2012/02/13/hope-lives-for-saskatchewan-oil-sands/
by pipeline or by rail going south, north, east or west the Oil Sands oil will get to market. our civilization isn’t powered by happy Green Unicorn farts
Canada’s National Energy Board
Canada’s Energy Future 2013 – Energy Supply and Demand Projections to 2035 – An Energy Market Assessment
http://www.neb-one.gc.ca/clf-nsi/rnrgynfmtn/nrgyrprt/nrgyftr/2013/nrgftr2013-eng.html
Crude Oil and Bitumen Resources
Canada has abundant resources of crude oil, with an estimated remaining ultimate potential of 53.9 109m³ (339 billion barrels) as of December 2012. Of this, oil sands bitumen accounts for 90 per cent and conventional crude oil makes up 10 per cent. Alberta currently accounts for all of Canada’s bitumen resources. Efforts are ongoing to assess bitumen deposits in Saskatchewan, but an official estimate of resource size is not yet available. For conventional crude oil, 72 per cent of the estimated remaining resources are found in the frontier regions that include East Coast offshore, northern Canada and other frontier basins that are still relatively unexplored.[22] The more developed conventional light and conventional heavy oil deposits in the WCSB account for the remaining 28 per cent
Resources become reserves only after it is proven that economic recovery can be achieved. Canada has remaining oil reserves of 27.2 109m³ (171 billion bbls) as of December 2012, with 98 per cent of this attributed to oil sands bitumen, and the remaining to conventional oil sources. According to the Oil & Gas Journal,[23] Canada ranks third globally in terms of proven oil reserves, behind Saudi Arabia and Venezuela
http://www.neb-one.gc.ca/clf-nsi/rnrgynfmtn/nrgyrprt/nrgyftr/2013/nrgftr2013-eng.html#s5_1
http://tinyurl.com/nmnd2yu
With respect, those are two very different and not mutually exclusive projects. This article misrepresents the impact that Gateway will have on the Keystone pipeline.
@Flint
The primary reason why access to Gulf Coast Refineries is highly desired for Canadian Heavy feedstock (eg Dilbit ) is because Gulf Coast refineries already have substantial bottoms upgrading capability. What unconstrained access for the Canadian feedstock would do is displace heavy crude imports to USGC (eg Venezuelan Heavies).
The situation has evolved that Northern tier refineries are already running as much heavy feed as they can, so that’s why canadian produces want to debottleneck the transportation system. Unfortunately for producers up in Canada (unless one can segregate markets effectively) the incremental bbl sold set the price and depresses returns for all bbls, and this is reflected in current crude discounts.
So that’s why Canada needs other outlets eg Northern Gateway, Energy East to tighten up supply and raise prices to World levels from the currently heavily discounted ones.
That being said, the USCG is still a good fit technically because the bitumen Dilbit is a heavy crude, and USGC refineries are well equipped for heavy feeds.
Good luck getting that pipeline through liberal land British Columbia. Those green liberals hate oil as much as Comrade Obamaski hate coal. There will be a new President in the White House long before that pipeline’s construction permits are ever issued. When all is said and done, a new Republican president will sign the pipeline’s construction permits.
Boydo3 N. Albany says:
June 28, 2014 at 11:22 pm
The oil was never going to be used here anyway
That’s an ignorant post because there is a big difference between the raw commodity and end product. The oil would most definitely be used in Illinois, Oklahoma, or Texas. The crude is used to make an entirely different product, refined products, just like any other raw commodity that is used in manufacturing. The crude is refined into new products that greatly increase the value of the product. The process provides jobs and a tax base where it is refined just like any manufacturing process.
As far as actually selling an appreciable amount of DILBIT to Asia, I’ll believe this when I see it. As far as I know no Asian country has the capacity to refine this much DILBIT and to be able to would take a very large investment. To get this done, not only would Canada need to actually build their Northern Gateway pipeline but they would need to make guarantees to China on supply and sell it at probably an even larger deduction than it is currently sold in the U.S because more and more light crude sources are opening up to China.
Can’t blame Canada at all. They gave the U.S. every opportunity to access this oil and only Obama is to blame!
The President and his billionaire friends can distribute THEIR wealth right now.
But their wealth will increase in the great plan.
It’s the money of the middle class and
poor that they want redistributed upwards towards the financial institutions through an ETS.
There is not a banker, accountant, stock trader, or alarmist environmentalist who does not salivate at the thought of trillions of dollars that once belonged to the poor being stuffed into their pockets.
All of this is being premised on a theory that is so hysterically exaggerated that the brilliant climatologist Kiminori Itoh when commenting on it said will eventually be exposed as a fraud and become the greatest scandal in the history if science.
Kiminori Itoh once worked for the IPPC as an advisor ………. for a short time.
The drivers of this plan will never ever redistribute one cent of their massive wealth.
If the North American price for gasoline and diesel were to rise high enough, could a business case be made for building heavy crude refineries in Alberta and Saskatchewan, with the refined product being shipped by rail either south into the United States or west to ports on the coast of British Columbia?
“First the US think that the oil sands are theirs.”
No, we think of them as belonging to our best, closest, and most sensible friend. And that’s how we thought of Canada even BEFORE the oil was found.
@Beta Blocker
Some for example labour movement in Alberta will from time to time ask why don’t they upgrade more in Alberta and ship product to add more value locally.
One might be able to make a case to ship product to Asia rather than feedstock.
However for the Canada US trade, what I see at present is that USA has more than adequate refining capacity, and in fact US exports of product are going up
So if one already has adequate refining capacity in a region why build more?
Remember that many of the companies operating In Canada are affiliated with the majors. For example Imperial oil is 70% owned by Exxon. Exxon and Imperial oil are both involved in oilsands. Why would they want to build a major heavy crude refinery in Alberta to export product into a market in competition with their own refineries.
It is not capital efficient to build “excess” refining capacity, and these big companies think globally in their capital allocation processes.
Nice work, brent. I have had occasion to chat with many geologists working on this very subject. The estimates you posted are very low, according to everyone that I have spoken to.