The TransCanada Keystone XL Pipeline Project is a proposed 1,897km crude oil pipeline connecting Hardisty in Alberta, Canada to Steele City in Nebraska, USA where it will join an already operating pipeline leg to connect it to the refineries at the US Gulf Coast.
This pipeline is designed to deliver up to 730,000 barrels per day (bpd) of Alberta Oil Sands and 100,000 bpd of Shale Gas from Bakken Formation to the refineries at the Gulf Coast. The refineries have been upgraded to refine unconventional bituminous crude.
The Fuss
The total length of existing pipelines in US exceeds 750,000km. The fuss created over this 1,897km is due to its strategic importance and environmental repercussions.
US Energy Policy is clearly driven to reduce its energy dependence on politically tumultuous Middle East and Venezuela which is shifting its attention more towards China. Thanks to the shale revolution, US has witnessed sharp boost in its energy production which now provides 60% of its consumption. 20% of its oil imports come from Canada, 50% of which is Oil Sands. Oil Sand is important to US not only because it accounts for substantial amount of oil imports but also because it is cheap and comes from a friendly neighborhood.
Oil Sand is an unconventional form of oil deposit and emits 10-15% extra greenhouse gases (GHG) during its entire lifecycle. Environmentalists have challenged the building of Keystone which, in their view, would ramp up the production of dirty oil sands.
Oil Sands
Oil Sand is a naturally occurring mixture of sand, clay, water and bitumen.
There are two methods to produce crude from the oil sands:
Alberta's Oil Sands is the third largest proven crude oil reserve in the world, next only to Saudi Arabia and Venezuela. The Athabasca oil sands deposit in Alberta contains 173 billion barrels of proven oil reserve. The total oil sands production in Alberta was 1.9 million barrels of oil per day (mbpd) in 2012 and is expected to reach 3.8 mbpd in 2022.
With greater power, comes greater risk.
Alberta Oil Sand is found in the low lying river valley surrounded by dense forests and lakes. The extraction of sands buried beneath the soil would naturally upset the local flora and fauna. The water based extraction process uses about 2-4 barrels of water for each barrel of oil produced. This results in the accumulation of immense amount of waste water, known as tailings. The waste water management is another environmental challenge.
As with any pipeline, there is always a risk of oil spill which could seep to the underground aquifers and poison the local fresh water supply.
To XL or excel, that is the question
BP has recently published a report which forecasts the global energy consumption to rise by 41 per cent from 2012 to 2035. With the massive potentials of Alberta Oil Sands, it is quite evident that it will eventually make its way to the market. If it cannot pave its path to the US, another oil thirsty nation will step in. In a nutshell, the oil sands won’t be staying in Alberta too long.
Keystone is probably the cleanest and safest way to bring the oil to the US refineries. The railways have been the traditional way to carry oil to the US refineries. The recent accidents in Quebec and North Dakota have jeopardized its potential.
Open to criticism
It is the friction between the opposing forces that tend to produce an optimum, socially acceptable solution to a problem. US has not only the best technology to harness natural resources but also the most aggressive environmentalists in the world. The outcome of contention and inexorability has been rewarding indeed. The energy production in US increased by more than 10% in past five years, but for the same time range its emission reduced by more than 10%.
This trend of accepting criticism by the US is commendable. In response to the latest State Department's SEIS report, Mr. Obama said he would only approve the pipeline if it did "not significantly exacerbate the problem of carbon pollution. The net effects of the pipeline's impact on our climate will be absolutely critical to determining whether this project is allowed to go forward".
The Battle
An affirmative nod, if in case, for the construction of Keystone XL should not be viewed as a battle lost by environmentalists. Their adamancy and commitments by involved industries has provided substantial amount of investment in the budding field of Carbon Capture and Storage (CCS). Their quest has led to re-designing of the pipeline plan and enhanced regulations both in the US and Canada:
Back Down South
It is quite clear that in its quest to become energy independent, US has chosen Canada to be its close friend. However the relationship with its neighbor down south appears to be blurry. Immensely resourceful but plagued by its nationalistic view on its oil, Mexico's oil exports have dropped to trickle. Yet it contributes for more than 10% of US's oil imports.
Enrique Peña Nieto's revolutionary energy reform would definitely lead to drastic increase in the Mexican oil production. The opening up of Mexico's oil sector to foreign investment would uncork much awaited prospects in the Gulf of Mexico and Eagle Ford Extension. This news would be more euphoric to the refineries at the Gulf Coast than the approval of Keystone.
Bibliography
This pipeline is designed to deliver up to 730,000 barrels per day (bpd) of Alberta Oil Sands and 100,000 bpd of Shale Gas from Bakken Formation to the refineries at the Gulf Coast. The refineries have been upgraded to refine unconventional bituminous crude.
The Fuss
The total length of existing pipelines in US exceeds 750,000km. The fuss created over this 1,897km is due to its strategic importance and environmental repercussions.
US Energy Policy is clearly driven to reduce its energy dependence on politically tumultuous Middle East and Venezuela which is shifting its attention more towards China. Thanks to the shale revolution, US has witnessed sharp boost in its energy production which now provides 60% of its consumption. 20% of its oil imports come from Canada, 50% of which is Oil Sands. Oil Sand is important to US not only because it accounts for substantial amount of oil imports but also because it is cheap and comes from a friendly neighborhood.
Oil Sand is an unconventional form of oil deposit and emits 10-15% extra greenhouse gases (GHG) during its entire lifecycle. Environmentalists have challenged the building of Keystone which, in their view, would ramp up the production of dirty oil sands.
Oil Sands
Oil Sand is a naturally occurring mixture of sand, clay, water and bitumen.
There are two methods to produce crude from the oil sands:
- In Situ - Accounting for almost 50% of total oil sands production, it uses Steam Assisted Gravity Drainage (SAGD) whereby superheated steam is injected underground leading the bitumen to ooze out of the well.
- Surface Mining - Heavy machineries are used to crush the sand which is then mixed with heated water to wash out the bitumen. The crude thence produced is heavy and extremely viscous. Thus, it needs to be diluted before it is sent over to the refineries.
Alberta's Oil Sands is the third largest proven crude oil reserve in the world, next only to Saudi Arabia and Venezuela. The Athabasca oil sands deposit in Alberta contains 173 billion barrels of proven oil reserve. The total oil sands production in Alberta was 1.9 million barrels of oil per day (mbpd) in 2012 and is expected to reach 3.8 mbpd in 2022.
With greater power, comes greater risk.
Alberta Oil Sand is found in the low lying river valley surrounded by dense forests and lakes. The extraction of sands buried beneath the soil would naturally upset the local flora and fauna. The water based extraction process uses about 2-4 barrels of water for each barrel of oil produced. This results in the accumulation of immense amount of waste water, known as tailings. The waste water management is another environmental challenge.
As with any pipeline, there is always a risk of oil spill which could seep to the underground aquifers and poison the local fresh water supply.
To XL or excel, that is the question
BP has recently published a report which forecasts the global energy consumption to rise by 41 per cent from 2012 to 2035. With the massive potentials of Alberta Oil Sands, it is quite evident that it will eventually make its way to the market. If it cannot pave its path to the US, another oil thirsty nation will step in. In a nutshell, the oil sands won’t be staying in Alberta too long.
Keystone is probably the cleanest and safest way to bring the oil to the US refineries. The railways have been the traditional way to carry oil to the US refineries. The recent accidents in Quebec and North Dakota have jeopardized its potential.
Open to criticism
It is the friction between the opposing forces that tend to produce an optimum, socially acceptable solution to a problem. US has not only the best technology to harness natural resources but also the most aggressive environmentalists in the world. The outcome of contention and inexorability has been rewarding indeed. The energy production in US increased by more than 10% in past five years, but for the same time range its emission reduced by more than 10%.
This trend of accepting criticism by the US is commendable. In response to the latest State Department's SEIS report, Mr. Obama said he would only approve the pipeline if it did "not significantly exacerbate the problem of carbon pollution. The net effects of the pipeline's impact on our climate will be absolutely critical to determining whether this project is allowed to go forward".
The Battle
An affirmative nod, if in case, for the construction of Keystone XL should not be viewed as a battle lost by environmentalists. Their adamancy and commitments by involved industries has provided substantial amount of investment in the budding field of Carbon Capture and Storage (CCS). Their quest has led to re-designing of the pipeline plan and enhanced regulations both in the US and Canada:
- limitation on the amount of water to be withdrawn from the Athabasca River
- better waste water disposal plan
- enhanced recycling of water
- robust disaster recovery plan
- efficient use of land and better reclamation measures
- to pay $15 per tonne of CO2 extra emitted over a fixed reduction target
Back Down South
It is quite clear that in its quest to become energy independent, US has chosen Canada to be its close friend. However the relationship with its neighbor down south appears to be blurry. Immensely resourceful but plagued by its nationalistic view on its oil, Mexico's oil exports have dropped to trickle. Yet it contributes for more than 10% of US's oil imports.
Enrique Peña Nieto's revolutionary energy reform would definitely lead to drastic increase in the Mexican oil production. The opening up of Mexico's oil sector to foreign investment would uncork much awaited prospects in the Gulf of Mexico and Eagle Ford Extension. This news would be more euphoric to the refineries at the Gulf Coast than the approval of Keystone.
Bibliography
- The Quest - Daniel Yergin
- National Geographic Magazine
- Alberta Oil Sands
- TransCanada Keystone
- Department of State - Environmental Impact Statement