Part One – A Summary.
What is the proposed Keystone XL pipeline?
It was the latest project to move DilBit, diluted Bitumen, from Canada to oil refineries in the United States.
What is Bitumen?
Bitumen is tar (think the La Brea Tar Pits) or natural asphalt (it is a key component of the asphalt we drive on). Bitumen after extensive processing and refinement can become a form of fuel oil (gasoline, diesel, jet fuel).
With the high cost (economically and environmentally) of extraction and processing of Bitumen, it has only recently became profitable due to the high price of a barrel of oil.
So why the pipeline?
Canada has one of the world’s largest of deposits tar sands or oil sands, which contain Bitumen. The United States has the refineries to convert Bitumen. It is just a matter of getting it there.
So what’s the deal with Keystone XL?
It is a proposed pipeline to bring DilBit to Texas refineries. In order to cross from Canada into the United States the pipeline must be approved by the President.
What’s the problem?
Earlier President Obama had approved similar cross-border pipelines. The Keystone XL project was slowed to be approved because of its proposed route through the Sand Hills, an environmentally sensitive area. Located in Nebraska, the Sand Hills lies just above the largest source of water in the Midwest. A leak would prove to be an environmental disaster.
In November of last year, after years of battling with environmentalist and Nebraska politicians (the Republican Governor and a Republican Senator), TransCanada, the builders of the pipeline agreed to move the route away from the Sand Hills.
Problem solved, right?
All that was needed now was a review of the new proposed route by the State of Nebraska.
OK, so after this review the President would approve the pipeline?
Most likely the President would have approved the project.
Why didn’t the President approve the project?
In December of 2011 (just days after the agreed change to the route) the Republican Congress passed legislation to require the President to approve or deny Keystone XL as is within 60 days.
On January 18th the President denies the permit citing inadequate environmental examination (the new route through Nebraska).
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Part Two: What You Need to Know about Bitumen
Part Three: The Money and Politics of Tar
Part Four: The Future Collapse of the Oil Industry
Mike James is an irregular contributor to the O.B Rag. Mike began his research on Keystone XL to better understand and address the recent rhetoric surrounding the President’s denial of the project.
{ 5 comments… read them below or add one }
Mike – you might also address who will probably end up using the resulting fuel. I’ve read that it will be shipped out of the U.S. once refined; I’d like to know more about that.
Hey Judy – One of the talking points the Republicans are using is that without Keystone XL that Canada will now send there oil to China. Truth is that for the past two years the Canadians have been trying to get a pipeline to their West Coast so they could ship to China. They are running into opposition and prospects look dim.
So what is the best way to get the oil to China? Get it to Texas and ship from there.
When the Republicans try to get the Keystone XL pushed through again watch carefully. Hopefully the press will ask if they will give insurance that the oil will not exported out of the Gulf Coast.
assurances not insurance :)
It might be noted that in the fourth quarter of 2011, for the first time in US history, exports of petroleum products, mainly in the form of refined gasolines and natural gas, became the number one revenue generating export in our economy. This is a result of having a large refining capacity after Americans cut their fuel use due to the bad economy and high fuel prices. The gasoline is mostly being sold to developing countries.
It’s not clear how many if any US refineries are geared to refining bitumen, there must be some with this capability. A few years ago they weren’t doing it.
Bitumen has a high environmental cost at every stage, particularly the extraction process which requires heating it, creating greenhouse gas emissions. They have to extract the solvents used to liquify it for transportation at our end. Not a pretty picture, and if you want to see ugly on a big scale google “athabasca tailings pond” and select images. Now imagine all the wild waterfowl that come along and land unsuspectingly in that goo.
They’ve polluted the whole region’s water supply as well.
I understand the worry about the potential for environmental damage. I looked up the area of concern where the pipeline is to be run in Hooker County, Nebraska. There is not much there is the way of people. So, it must be about protecting the wildlife.
What really makes me ponder is the fact that in 2012 we are still not focused on safer pipeline technology. I mean there will be damage from construction. That is a given. But it is spills that are the real issue. Why can’t they create affordable but much safer transport pipes?