On October 30, TransCanada filed a plan to build a new pipeline from the oil sands projects in Alberta east to St. John, New Brunswick.  Even though the company says otherwise, Transcanada’s Energy East’s pipeline, with a capacity of 1.1 million barrels of oil per day, provides a direct substitute for the XL extension to the Keystone pipeline which has be in political limbo for 3 years.

Energy-East-Pipeline

The $12 billion pipeline construction project will involve the conversation of an existing natural gas pipeline as well as construction of approximately 900 miles of new pipeline.  Along with the pipeline, a new deepwater terminal for export will be constructed at St. John.

Most important for Transcanada, since the project is wholly contained within the borders of Canada, the project cannot be delayed or used as a political football by US politicians.  So, what’s happened is exactly what markets and economics cause to happen; the XL project has been delayed by US politicians for the benefit of themselves so long that Transcanada has developed a more expensive, but likely more certain alternative that provides a market for crude produced from the oil sands in Alberta.

The lesson here, at least for us?  It is long past time for us to adopt a comprehensive energy policy around weaning ourselves from heavy hydrocarbons and developing more sustainable cleaner fuels to power our future.  The XL pipeline debacle should be another one of those moments in time with which we are occasionally presented that should be used to change our national direction.  Perhaps, one day, we’ll actually take advantage of those opportunities to improve the future for our kids, grandkids, and their kids.

If only that was at the front of our collective consciousness.

 

 

Loren Steffy, formerly with the Houston Chronicle, is now writing for Forbes.  He’s just published an article laying out the case for building the Keystone pipeline, with which I agree.  The key points are:

  • Oil from the pipeline will not be exported, which is actually illegal under federal law.
  • Refined products, like gasoline, are being exported, but for economic reasons, due to sagging demand in the US.  It’s either export, or lay off workers.  I’ll take export, which has the side benefit of reducing our trade deficit.
  • The pipeline is essentially insurance against OPEC.  I would rather have the US control more supply, not less.

Great article by Loren.

Source: US State Department

Over the last several months, the controversy over the Keystone XL pipeline extension has grown to such fevered pitch that several weeks ago, the Obama administration, fearing alienation of its own environmentalist base, punted a decision on its border crossing permit for another year of further “study” of the pipeline project. Proposed by pipeline company Transcanada, The Keystone XL extension consists of over 1,600 miles of 36″ pipe that would move oil from the oil sands projects in Alberta, Canada, through Saskatchewan, into Montana, then crosscountry, using portions of the existing Keystone pipeline, extending all the way to refineries on the Texas Gulf Coast.  When completed, the pipeline system is expected to have capacity to transport up to 1.1 million barrels of oil per day, or about 6 percent of our total oil consumption per day in the US. Read the rest of this entry