Just Say no to Keystone XL Pipeline www.transcanada.com Canadians says Tim Fisher Bakken Energy Service www.bakkenenergyservice.com co-host Energy Matters Radio Show www.iheart.com.
Why Canadians should fight the Keystone XL pipeline.
In the past I have interviewed decision makers from TransCanada who want to build the Keystone XL pipeline. Their goal is to take Canadian oil and send it to a US refinery in Cushing Oklahoma. The Oil sands in Alberta are oozing with high sulfur oil and they want to charge oil companies for the rights to send their oil down TransCanada’s pipeline.
I stated on last week’s Energy Matters radio show that I felt the building of the Keystone XL pipeline is simply a bad idea as it will take the place of at a minimum 700,000 barrels per day of US harvested crude. Why would we want to do this?
We talk about American Energy Independence but in the same breath we allowed Saudi Arabia to purchase the largest refinery in the USA blocking 800,000 barrels of US produced crude http://www.motivaenterprises.com/motiva-business/port-arthur.html from being refined and now we want to eliminate another 700,000 barrels per day/ Why?
We had a big celebration when North Dakota hit 1 million barrels of oil per day but if we took all the oil produce d in the bakken we would not equal all the American oil we take off the market by allowing so much foreign oil to come into the USA.
Now I understand we still import 7.5 million barrels of oil per day but why would we close off markets to the USA as we produce more. Where I come from that is simply called “STUPID”.
The other issue is the Cushing Refinery is less like a refinery and more like a switching station. Cushing used to have approximately 50 million barrels of inventory on hand but now it has plunged 40% down to 34 million barrels.
The pipeline industry has worked feverishly to reorient the country’s oil pipelines around new sources of domestic crude production in the middle of country. New pipes have been built and old ones reversed to get more crude out of places such as North Dakota and Oklahoma and into refining hubs along the Gulf Coast. That’s essentially the opposite of what they were intended to do, when increasing imports needed to be piped from the coasts to the interior of the country.
Here is the question I do not hear being asked? Why doesn’t Canada build a refinery next to the oil sands? I understand they have one being built that will handle 55,000 barrels but that is so small compared to their needs.
In Canada as of January 12th 2015 they average price per gallon of gas (yes I know they purchase in liters but I did the math conversion 3.78541 liters per gallon) is $3.40 per gallon. In the USA is $2.27. What this tells me if we really care about our friends to the north we would make them keep their oil, suggest they build a refinery thus lowering their national fuel costs. By allowing the oil sands to come to the USA it will actually hurt the average Canadian citizen.
The Providence of Alberta has been fighting to get a refinery built to produce the much needed diesel but their government would much rather have the US expand our refineries than build their own? Why would this be? It is estimated it would cost approximately $12 Billion Canadian Dollars to build a refinery which means thousands of good Canadian jobs.
The bottom line I feel is Canada is practicing the NIMBY principle Not In My Back Yard. Canada feels it is okay for the USA to handle the product but Canada is too environmentally conscious to have this dirty tar sand refined in their pristine ecosystem.
So here is my summary for Canada. Currently every barrel of oil produced from the oil sands is losing money but because of the private investments of over $271 Billion yes Billion with a B the investors must continue to process the sands or default.
An additional combination $60 billion in new projects have been delayed or cancelled. It is very simply “Follow the Money”. The lobbyist in Washington paid for by the major investment interests in Canada are working overtime to bend the ears of Congress. So far they are 6 for six on the ears North Dakota Congressmen and one Congresswoman.
I will close with two seldoms:
The first seldom is – Seldom do we hear company names like Suncor Energy Inc. www.suncor.com/ , Total E&P Canada Ltd. www.total-ep-canada.com , and Canadian Oil Sands Ltd.’s www.cdnoilsands.com but these are private companies who are lobbying the US Congress like their financial lives depend on it.
My second seldom is – Seldom do I agree with President Obama on energy policy but when it comes to Keystone XL I do agree it should not be approved. My saving grace is The President states it is environmental I say it is economics.
My solution: let’s build a pipeline from right down Highway 85 while rebuild 85 into a four lane from Williston right to the SD boarder. At the boarder take a turn west and connect into the Keystone pipeline less the part that would cross into Canada.
Since it would start in Montana, Montana could add 50,000 barrels per day, North Dakota could add 400,000 barrels per day and the other 250,000 barrels from Nebraska Niobrara , Wyoming Powder Ridge basin and Colorado’s DJ Basin. This cuts our rail by 50% and keeps US Oil in US pipelines.
And that’s my take.
Tim Fisher Founder of Bakken Energy Service www.bakkenenergyservice.com can be heard on iheart radio www.kfyr.com on Energy Matters each Tuesday 550 AM.