Thursday, November 10, 2011

Yup, It's Dead -- The Keystone XL 1.0 -- Now, Keystone XL 2.0 Is Dead -- Looking Forward to Keystone XL 3.0 -- The Bakken, North Dakota, USA

Keystone XL 1.0: first iteration; killed by Obama's State Department
Keystone XL 2.0: 2nd iteration; thought experiment; no application
Keystone XL 2.0S: TransCanada's southern leg, Cushing to the Gulf (completed, late 2013)
Keystone XL 2.0N: TransCanada's cross border pipeline, through Nebraska (on hold; State Department's SEIS says no environmental impact, February 1, 2014)
US State Dept wants "do-over" on Enbridge Alberta Clipper (February, 2014) 
Keystone XL officially killed (November 6, 2015)

Updates

November 6, 2015: Keystone officially killed

September 30, 2015: hope springs eternal; TransCanada continues to pursue this pipeline, now described as an $8-billion-pipeline.

August 30, 2014: not enough pipeline to handle US glut of oil
The North Dakota Industrial Commission oil production in June, the last full month for which data are available, was 1.09 million barrels per day, a record for the state and a 4.8 percent increase from the previous month.the amount of crude oil and refined petroleum products moved by rail, the primary alternative to pipelines, increased 9 percent during the first seven months of the year.
The environmentalists shot themselves in the foot with regard to the Keystone, unless they like to move oil by rail.

February 17, 2014: a "sure thing," the Alberta Clipper (Enbridge pipeline from Hardisty, Alberta, to Wisconson; 800,000 bopd; green-lighted in 2009; now US State Dept wants a "do-over"; will delay (if not permanently halt) this pipeline.

February 13, 2014: See nice essay, dated February 7, 2014, at the very bottom of this page.

February 1, 2014: all the arguments are resolved, off the table, but one -- whether the Keystone XL 2.0 North will actually increase global CO2. The US State Department: nope. Now, we wait for John Kerry and then President Obama to announce a decision. I'm not holding my breath. [I posted that earlier today; a few hours later Don sent me the Billings Gazette link with the same story: President Obama running out of "excuses" to deny the Keystone XL 2.0 North.

December 31, 2013: Keystone XL 2.0 South (Cushing to the Gulf Coast) should start flowing January 22, 2014. Construction began in August, 2012.

December 21, 2013: billionaire Tom Steyer is the reason the Keystone XL was stopped and the reason it won't be approved by President Obama. 

October 17, 2013: the southern leg of the Keystone XL, from Cushing, OK, to the Gulf Coast should come on-line in November, 2013. Cushing has storage capacity for 35 million bbls; the Keystone will draw 5 million bbls on initial fill, and will draw 5 million bbls each week after that.

June 12, 2013: earliest date it could be completed, if approved in 2013, is now 2016 -- RBN Energy.

April 26, 2013: TransCanada pushes in-service date for Keystone XL back to end of 2015.

March 4, 2013: despite draft report from State Department and a flurry of press releases and news stories, the bottom line is that the State Department says at least another 45 days will be needed to make a recommendation. [Technically, this is Keystone XL 3.0  -- the State Department rejected Keystone XL 1.0 on November 10, 2011, requiring a new route through Nebraska; then on February 18, 2012, apparently promising to come up with a new route -- although the story becomes unclear -- the President clearly stated he denied the permit -- see below for the link. -- which I referred to as Keystone XL 2.0. But since most Americans think that was still the "same" permit, I will go back to calling the current permit under discussion, "Keystone XL 2.0." 

February 3, 2013: US State Department says at least six more months before a decision is made. Canadians are seething.

January 29, 2013: Warren Buffett will build first-ever multi-grade crude oil rail loading terminal in the Rockies; his answer to the killing of the Keystone.

January 22, 2013: DOA. If I were a betting man, I would bet that the Keystone XL is not disapproved before March 31, 2013.

January 22, 2013: CNBC is reporting that the Nebraska governor approved the "new" improved, environmentally safe, Keystone XL. The governor might not have used all those words to describe the pipeline route. Nebraskans might be getting tired of all those unit trains running through Omaha every day. 

January 4, 2013: 2,000-page report of the proposed "new" route through Nebraska is "in the mail," sent to the governor. He has 30 days to review the proposed plan.

January 1, 2013: Three individuals have brought a lawsuit to stop the Keystone XL pipeline through Nebraska. The state sought to have the lawsuit dismissed. The state failed. A court says the lawsuit can proceed.
In the lawsuit, the three — Randy Thompson, of Martell; Susan Dunavan, of McCool Junction; and Susan Luebbe, of Stuart —say the law that established the review process is unconstitutional because it doesn't allow for judicial review and doesn't spell out what criteria should be considered when a pipeline project is being evaluated.
December 15, 2012: pipeline to nowhere? Montana to sell easements. Nice graphic. The pipeline does not go through North Dakota.

December 11, 2012: a section of Keystone XL 2.0 South is halted while a judge sorts out the definitional difference between "crude oil" and "heavy sands oil." Good luck. [Update: quickly dismissed: the judge lifted his own injunction almost immediately; "crude oil/heavy sands oil" not an issue.]

November 15, 2012: Keystone XL may be first test of Obama's second term -- Oil and Gas Journal. Any bets?

September 5, 2012: TransCanada submits new plan for the 275-mile link through Nebraska to avoid the Sandhills.

September 2, 2012: ONEOK continues work on their Bakken NGL pipeline from Sidney, MT (the Bakken), south through Wyoming into Weld County, Colorado, to connect with the Overland Pass Pipe. But this is the big news: ONEOK suggests they will lay a crude oil pipeline alongside. With Enbridge pipelines going east, and ONEOK pipelines going west and south, along with rail takeaway om the Bakken, it makes the Keystone XL less important for the Bakken.

September 1, 2012: CNOOC has already bought a piece of the Athabasca (Canadian oil sands); now there are rumors that Kuwait is buying a piece.

August 22, 2012: I guess it's a fait accompli -- the Keystone XL has now been re-routed 90 degrees to take oil from the oil sands to the west coast of Canada; actually I think TransCanada will still try to "git 'r done." From Motley Fool:
The decision by the U.S. Department of State to deny permits for building the Keystone XL pipeline resulted in a shift in the plan to build a pipeline from the Alberta tar sands to British Columbia instead of transporting the extracted oil to refineries on the U.S. Gulf Coast.
August 22, 2012: it would probably be too much to ask, but it would be nice if the mainstream media would post the daily volume of the Keystone XL (had it been approved) and the daily volume of the Strategic Petroleum Reserve if it is tapped this autumn.

July 26, 2012: President Obama kills the Keystone --> China steps in to buy Canadian oil assets. Check.  WSJ.

July 2, 2012: Washington Post news story is an op-ed to kill the Keystone XL

March 29, 2012: another superficial Motley Fool article on the Keystone XL but provides a few nuggets for further research.

March 28, 2012: Native Americans lying all over will stop Obama's push to fast-track the Keystone XL 2.0S.

March 21, 2012: TransCanada has not yet submitted an application for Keystone XL 2.0S.

March 20, 2012: Obama to fast-track Keystone XL 2.0S. The part that doesn't connect to Canada. The part that doesn't require federal permits. The part that will require approval by Fish and Wildlife; EPA; and, the US Army Corps of Engineers.

March 6, 2012: Keystone 0.5XL South Leg update.

February 29, 2012: The president (not THAT president, the former president Clinton) says it's time for the Keystone XL to be built.
... the former president said he was surprised the project has gotten as gummed up as it has, laying the blame on pipeline builder TransCanada.
"One of the most amazing things to me about this Keystone pipeline deal is that they ever filed that route in the first place since they could've gone around the Nebraska Sandhills and avoided most of the dangers, no matter how imagined, to the Ogallala [aquifer] with a different route, which I presume we'll get now, because the extra cost of running is infinitesimal compared to the revenue that will be generated over a long period of time," he said.
President Clinton misread the activists: this was not about the aquifer; the aquifer is a McGuffin. But the activists blew their wad. No "new" McGuffin but Texas ranchers will give TransCanada fits.

Note: President Clinton (or someone at the conference) in the linked story mentions the Bakken.

February 24, 2012The president praises TransCanada's decision to build Keystone Lite, the southern leg of the Keystone XL that was killed by the same administration. The Keystone Lite will run from Cushing, OK, to the Gulf and cost $2.3 billion.

February 22, 2012: two nice stories on the Keystone XL in Market Watch.

February 21, 2012: 75% of material to be made in US, including 50% of the pipe to be made in Arkansas. 

February 20, 2012: Keystone XL would increase global warming by 0.05 degree. Scientists did not say how much warming would occur if Keystone XL pipeline released by trains and trucks. 

February 14, 2012: TransCanada now says it will be another year for the project; pushed back to 2015. 

February 13, 2012: short editorial in PennEnergy suggesting that Obama's killing of the Keystone XL will have long-term implications, particularly if Canada turns toward China; mentions North Dakota infrastructure.

January 25, 2012: old, old news; some of the earliest posts on this subject were at this site; but for those who don't think Obama is in a win-win on the Keystone XL; the Obama-Buffett-KeystoneXL-BNSF dots

January 23, 2012: TransCanada mulls Bakken opportunities

January 19, 2012: Keystone XL 2.1 being considered.

January 18, 2012: Obama rejects Keystone 2.0. [Again, some Obama supporters cannot grasp this: the president denied the permit for Keystone 2.0 on January 18, 2012. One can argue how the permit got to his desk or whether it even got to his desk, but the president himself said he denied the permit. It is one of the few "blunders" in his administration that he took personal responsibility.]

January 11, 2012: political theater. Senate Republicans looking at approving pipeline without Obama's approval. Initiative won't go anywhere.

January 5, 2012: PetroChina snaps up rest of heavy sands prospect; one step closer to no need for Keystone XL.

January 2, 2012: Wow, I am impressed. Despite my negativity and continuing to "beat a dead horse," a reader sent in several links to track the Keystone XL 2.0 project. See comments below. Because one cannot click directly on links in the comment section, I will post them here:
A huge thank you to "anonymous" for such a long comment with lots of info. Thank you.

January 2, 2012: Just for clarity. Some folks write to tell me that Keystone XL is not dead. In fact, it is dead. All parties (including TransCanada) have agreed that a) a new route is needed; and, b) an accompanying Bakken pipeline for American oil should be added. Two pipelines (not just one) and a new route is a new project. Period. Dot. Keystone XL 1.0 is dead. We're now working on Keystone XL 2.0. Oh, by the way, if faux-environmentalists were concerned with one pipeline, I can only imagine what they feel about two new giant pipelines on the same continent as the Ogallala aquifer.

January 2, 2012: as predictable as the weather, and the mainstream media feeds into it. The Keystone XL will be the big money-raiser for this year's election. Trust me.
President Barack Obama and Congress are starting the new year locked in a politically charged dispute over a proposed 1,700-mile oil pipeline from Canada to Texas. Republicans and some unions say the Keystone XL pipeline will create thousands of jobs. Environmentalists fear it could lead to an oil spill disaster. The pre-Christmas agreement between Obama and Congress temporarily extending the payroll tax cut included language compelling Obama to make a speedy decision on whether to build the pipeline. The administration says it would rather say "no" than rush a decision in an election year.
The outcome is predictable. Obama will say "no" to the current route (which TransCanada has already scuttled) and say "yes" to a new proposal (which TransCanada has already agreed to). This can will be kicked down the road and any "real" decision will not come until after the election. Oil won't flow, but political dollars will. This is not rocket science.

January 2, 2012: for time-date stamp purposes only -- 12:57 p.m. CST,  -- will the Keystone XL be a 21st century synonym for "Pyrrhic victory"?  It will be interesting to see which mainstream energy pundit uses this analogy first.

December 31, 2011: comments below are focused on the routing of the Keystone. I noticed I had not linked this routing proposal that I posted on December 21.  Now that TransCanada (and others, see comments) are now suggesting that a parallel pipeline to the Keystone XL could carry Bakken sweet light oil, it really begs the question: how did TransCanada misread this to begin with? Sure, we now have 20/20 hindsight, but ... I don't want to rehash all this. Bottom line: in hindsight, TransCanada could have worked the project in tandem: put in a Bakken line from North Dakota to Cushing to Louisiana requiring no State Department involvement, while at the same time, working on the permit to put a pipeline across the international border.

December 22, 2011: CNBC's take on the issue -- "what's all the fuss about?"

December 17, 2011: Congress ties a 60-day decision regarding the Keystone XL to a 2-month extension of the "workers' tax holiday."  No link; the issue no longer interests me in a serious way; I post updates for archival purposes only. This is a political issue, and once in the political arena, I lose interest. With a country $16 trillion in debt; 10%+ unemployment; and, this is the issue of the day: a pipeline in Nebraska. Give me a break.  If EPA bans fracking in the Bakken, I will lose interest in the Bakken.

December 16, 2011: Easterners think the Keystone XL's proposed route is through the Keystone State, Pennsylvania. 

December 14, 2011: Kudlow interviews union heads who support the Keystone. $9 billion project paid for by TransCanada; $4.5 billion goes to American workers.

November 21, 2011: MinnPost agrees -- it's time the President starts making decisions. He continues to vote "present."

November 17, 2011: Wall Street Journal op-ed:"Obama Abandons (Private) Labor"
The decision by the Obama administration to "delay" building the Keystone XL pipeline is a watershed moment in American politics. The implication of a policy choice rarely gets more stark than this. Put simply: Why should any blue-collar worker who isn't hooked for life to a public budget vote for Barack Obama next year? The Keystone XL pipeline would have created at least 20,000 direct and indirect jobs. Much of this would have been well-paid work for craftsmen, not jobs as hod carriers to repave the Interstate. On a recent trip to Omaha, Neb., Mr. Obama signaled where his head was on the pipeline during a TV interview: "Folks in Nebraska, like folks all across the country, aren't going to say to themselves, 'We're going to take a few thousand jobs if it means our kids are potentially drinking water that would damage their health." Imagine if he'd been leading a wagon train of workers and farmers across the Western frontier in 1850. Within days of the Keystone decision, Canada's prime minister, Stephen Harper, said his country would divert sales of the Keystone-intended oil to Asia. Translation: Those lost American blue-collar pipeline jobs are disappearing into the Asian sun. Incidentally, Mr. Harper has said he wants to turn Canada into an energy "superpower," exploiting its oil, gas and hydroelectric resources. Meanwhile, the American president shores up his environmental base in Hollywood and on campus. Perhaps our blue-collar work force should consider emigrating to Canada.
November 17, 2011: Calgary Herald -- this was never about the aquifer.  November 17, 2011: It was never about the aquifer.
Debate over the pipeline has drawn international attention focused largely on Nebraska, because the pipeline was expected to cross the Sandhills — an expanse of grass-strewn, loose-soil hills — and part of the aquifer, which supplies water to Nebraska and parts of seven other states. But national environmental groups have said they will actively fight the project along any route, because of potential environmental threats. Company officials had claimed that moving the route was impossible because of a U.S. State Department study which found the Sandhills route would leave the smallest environmental footprint.
But last week the federal government delayed a decision on a federal permit for the project until it studies new potential routes that avoid the Sandhills area and the aquifer. The proposed pipeline would carry crude oil from Canada to Texas Gulf Coast refineries.
The aquifer was a MacGuffin. The Keystone XL will not go through Nebraska. The Keystone XL is dead.

November 12, 2011: only a few are willing to say that the Keystone XL is dead. Here's another pre-death obituary.  November 11, 2011: it is very, very clear that Obama is NOT serious about jobs. Period. Dot. A leader concerned about jobs would have taken the bull by the horns, gone to Nebraska, twisted some arms, taken some union reps with him and gotten the job done. Another example of Obama being pushed around; he is not leading.

Original Post
Link here [That link, to The Bismarck Tribune, is broken, or gone. This link to NPR, same date, carries the same story.]

The State Department has ordered the developer of a pipeline that would carry oil from western Canada to Texas to reroute it from environmentally sensitive areas of Nebraska, possibly delaying a final U.S. decision until after the 2012 election. The decision, described to The Associated Press by two senior State Department officials familiar with the project, will require an environmental review of the new section. That review probably would take at least a year.
Calgary-based TransCanada Corp. is seeking to build the $7 billion pipeline to carry oil derived from tar sands in Alberta, Canada, to refineries on the Texas Gulf Coast. Part of the 1,700-mile pipeline would pass through Nebraska's Sandhills region and the massive Ogallala aquifer, which supplies water to eight states.
Winners and losers: the Bakken is the big winner. By the way, if you want to see a graphic example of hypocrisy, look at the map of pipelines in the US and note two major pipelines running the length of Nebraska. This hypocrisy ranks right up there with environmentalists getting a license to kill whooping cranes with impunity.

License to Kill, Gladys Knight
 
But at least with wind turbines, one is only killing endangered birds; with decisions that kill jobs, one is killing the spirits of men and their families. For an administration that talks about jobs all the time, it's hard to reconcile this decision with the tens-of-thousands of blue collar, union workers that would be putting this pipeline in the ground. And the union workers that would be forging the pipes in the first place. As noted often, I don't have a dog in this fight. I am not an investor in TransCanada. I accumulate shares in the Enbridge family of companies. I just feel bad for all those folks looking for work. And when oil goes over $100/bbl, I don't wanna hear any whining from the administration or other faux-liberals.

*******************************
From the New York Times debate on this subject, February 7, 2014

Ted Nordhaus and Michael Shellenberger are chairman and president, respectively, of the Breakthrough Institute, a think tank that works at the intersection of environmental protection, energy policy and global development.
 
The environmental movement's decision to target Keystone must be understood in the context of the collapse of the environmental movement’s climate agenda, first internationally in Copenhagen and then domestically in Congress. Having failed to enact sweeping measures to cap or tax greenhouse gas emissions, the reasoning went, the time had come to confront the nation's fossil fuel infrastructure and industry directly.

The effort, if nothing else, appears to have been immensely satisfying. No sooner had it become clear that two years of moralizing sermons and poor civil rights analogies would not stop Keystone then the movement's leaders tilted at yet another windmill — demanding that universities and philanthropies divest from fossil fuels. Like Keystone — which even under the best of circumstances would, by our calculations, have resulted in a global temperature difference of .0002 degrees Celsius — there is absolutely no reason to think that convincing investors to sell their interest in Exxon will have any significant impact on either the physics or politics of climate change.

Ultimately, we will turn away from fossil fuels and reduce emissions precisely to the degree to which we deploy real alternatives. Yet greens continue to oppose the technologies that have demonstrably worked to reduce emissions, namely nuclear energy, which allowed France and Sweden to decarbonize most of their electrical systems, and which remains the largest source of zero carbon energy globally, and natural gas, which has allowed the United States to reduce its emissions faster than any other nation in the world since 2007.

In the end, protests won't solve what ails environmentalism. All over the world, the environmental agenda is in retreat. Carbon caps have had little impact on emissions. The Kyoto framework has long since been abandoned. Renewables mandates have proved costly as innovation policy and ineffectual as climate policy. In this sense, the turn toward Keystone and now divestment mark not the beginnings of a new climate movement but the death rattle of the old one. 

15 comments:

  1. December 30, 2011 Hi Bruce, The Keystone XL pipeline may be delayed but its far from dead. See the following article for the latest update.

    Map used to reroute Keystone XL pipeline - Tulsa World - BY JOSH FUNK Associated Press Friday, December 30, 2011 12/30/2011 4:49:50 AM - OMAHA, Neb. -

    The Canadian company that wants to build a $7 billion pipeline to carry tar sands oil across the Plains to refineries near the Gulf of Mexico now has an official map of environmentally sensitive areas to avoid in Nebraska. State officials said Thursday that TransCanada will have to use a 10-year-old map of the Sandhills region as it develops a new route through Nebraska for the proposed Keystone XL pipeline. TransCanada agreed in November to develop the new route through Nebraska to avoid the environmentally sensitive Sandhills. "Obviously, the applicant cannot propose the route without knowing the area to be avoided," said Mike Linder, director of the Nebraska Department of Environmental Quality.
    See http://www.tulsaworld.com/site/printerfriendlystory.aspx?articleid=20111230_49_E4_OAAeTe105
    for the full article.

    Also for an excellent summary of the Nebraska political situation see - Energy Pipeline News an online newsletter about petroleum and natural gas pipelines - Vol. 12, No. 24 December 15, 2011 Items 22,23,24,25 and 26 at :
    http://www.energypipelinenews.com/EPN_Subscriber_Site/dec__issue_2.htm (Gets you the 12/15/11 issue and
    http://www.energypipelinenews.com/EPN_Subscriber_Site/ will get you the current month's issue

    Best wishes for A Happy, Healthy, and Wealthy New Year to You and Yours.

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  2. My hunch is that the whole project has become a cause célèbre. It is no longer based on science or reality, but has become completely political.

    The aquifer is a McGuffin, and anti-growth folks will fight any new proposal.

    My understanding is that the animosity in Texas is even worse.

    Again, I have no dog in this fight, but one can argue that the Keystone XL as originally proposed is dead. The company has agreed to submit a plan for a new route.

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  3. Bruce, IMHO the “dog you do have in this fight” is your “beloved” Million Dollar "Bakken" Way. See excerpt below:

    "Immediate approval of TransCanada's Keystone Expansion pipeline is of increasing importance given the declining production in Venezuela and Mexico, extensive volatility in the Middle East, rising oil prices and growing constraints in efficiently moving crude oil to major refining centers in the mid-continent and on the Gulf Coast," testified Lucian Pugliaresi, President, Energy Policy Research Foundation, Inc.

    Lucian further noted that "TransCanada is expanding Keystone XL's capability by offering BAKKEN OIL PRODUCERS, LOCATED IN NORTH DAKOTA and MONTANA, a chance to link into the pipeline and send their crude to Gulf Coast refineries FOR THE FIRST TIME.

    By increasing transport efficiency and allowing Bakken producers to tap into new Gulf Coast refinery markets, the KEYSTONE XL PROJECT will have the added benefit of improving wellhead values for oil production from the Bakken formation.

    EPRINC estimates that the Keystone expansion would provide net economic benefits from improved efficiencies in BOTH THE TRANSPORTATION and PROCESSING of CRUDE OIL of AS MUCH AS $600 MILLION ANNUALLY, in addition to an immediate boost in construction employment."

    From Importance of Keystone Pipeline Discussed by U.S. House of Representatives & Leading Experts at: http://findarticles.com/p/articles/mi_pwwi/is_201104/ai_n57192713/?tag=content;col1 which was an article about a public hearing of the House Foreign Affairs Subcommittee on the Western Hemisphere before members of the U.S. House of Representatives.

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  4. Well, let's see.

    When I first started blogging about the Keystone XL, I wanted to make sure folks understood I did not have investments in TransCanada. In that regard (investments), it did not matter to me whether Keystone XL succeeded or not. In fact, initially, TransCanada fought to deny any US oil being added to the pipeline; it was the governor of Montana that forced TransCanada to agree to adding Bakken oil to the Keystone.

    In fact, it is unlikely that any "smart" operator will add Bakken light sweet oil (the best on earth; almost needs no refining) to the heavy dirty Canadian oil in the TransCanada Keystone pipeline.

    Already Enbridge will only ship Bakken sweet light oil in its pipelines. Enbridge is way ahead of everybody on this one.

    One of the biggest stories of the year was Enbridge, a pipeline company, building a crude-by-rail oil loading terminal: my hunch is they are doing that to carry non-Bakken oil.

    It appears Enbridge, Burlington Northern, and others will manage to provide all the takeaway capacity for the Bakken without the Keystone.

    Again, no "smart" operator is going to mix Bakken sweet light crude with heavy dirty oil. And to the best of my knowledge they are not going to lay multiple pipelines along the Keystone XL route for various types of oil.

    Bottom line: I still have no emotional ties to the Keystone one way or the other; and no investments tied into TransCanada.

    ReplyDelete
  5. Regarding this quote from the comment above:

    Lucian further noted that "TransCanada is expanding Keystone XL's capability by offering BAKKEN OIL PRODUCERS, LOCATED IN NORTH DAKOTA and MONTANA, a chance to link into the pipeline and send their crude to Gulf Coast refineries FOR THE FIRST TIME."

    First, this is disingenuous: TransCanada fought to stop this (allowing Bakken oil to be added). It was a condition imposed upon them by the Montana governor.

    Second, it is now dated and no longer factually true: Bakken oil has already reached the Gulf refineries -- on a 100-tanker unit train out of Dickinson, North Dakota. This occurred in November, 2011, and was one of the big stories for 2011.

    In addition, now that Enbride is going to reverse the flow of oil in its Seaway pipeline, Bakken oil can get to the coast via pipeline WITHOUT the TransCanada Keystone pipeline.

    Any connection that TransCanada makes for shipping Bakken oil is simply political, trying to gain support for its pipeline.

    As noted in my comment above, this whole issue is moot: no "smart" operator is going to add great oil (Bakken sweet light) to bad oil (heavy Canadian sands oil).

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  6. Bruce, I inadvertently omitted the following important PS from my House of Representatives Keystone XL Hearing comment on 12/31/2011. Sorry.

    PS: See page 17(18) of the Energy Policy Research Foundation Inc’s November 29, 2010 report at http://www.eprinc.org/pdf/oilsandsvalue.pdf that is the basis of the estimated $600 million in annual net economic benefits that North Dakota and Montana Bakken oil producers would get from the completion of TransCanada’s proposed XL pipeline project expansion.

    If you read the following “stuff” TransCanada appears to be linking its Bakken Marketlink Project for transporting Bakken sweet light with its Keystone XL pipeline expansion project for heavy Canadian sands oil in order to get US approval for its Keystone XL project. Whether or not the Bakken Marketlink Project will proceed without a US Keystone XL Project OK is unclear to me.
    See http://www.transcanada.com/bakken.html and
    The BakkenLink common stream is expected to be light sweet crude, comparable to North Dakota Light Sweet, having a gravity range of 37-45 API and a sulfur content of 0.2% or less.
    http://www.bakkenlink.com/pdf/Notice_of_Open_Season_Final%209_27_10.pdf

    Christopher E. Smith OGJ Pipeline Editor HOUSTON, Jan. 21 -- TransCanada Corp. has concluded its open season for the Bakken Marketlink Project to deliver US-sourced crude from Baker, Mont., to Cushing, Okla., securing 65,000 b/d of firm, term contracts. Bakken Marketlink WILL USE PIPELINE FACILITIES THAT FORM PART of TransCanada’s Keystone XL system, which will run in close proximity to the Bakken crude producing regions within the Williston basin. TransCanada expects Keystone XL to be in service first-quarter 2013, subject to regulatory approvals.

    TransCanada closed a binding open season on its Cushing Marketlink project Nov. 19, the same day it closed the Bakken Marketlink open season, and is still evaluating bids. The project would involve construction of $70 million of facilities at Cushing and use facilities making up part of Keystone XL to deliver crude to near existing terminals in Nederland, Tex. (OGJ Online, Sept. 8, 2010). Once TransCanada finishes bid evaluation on Cushing Marketlink it will decide whether to proceed with regulatory applications. Assuming TransCanada moves forward with the project, it anticipates placing Cushing Marketlink in service first-quarter 2013 as well. Contact Christopher E. Smith at chriss@ogjonline.com.
    http://www.ogj.com/articles/2011/01/transcanada-secures.html

    Maybe I’m all wrong, but it appears to me that the amount of crude oil coming out of the North Dakota Oil Shale wells is far exceeding the capacity of the existing rail, trucking, and pipeline infrastructure to get that crude oil to market as cheaply and efficiently as is potentially possible. And that situation is going to continue to increase the bottom line expenses of North Dakota Shale Oil producers.

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  7. Outstanding.

    I'm on my iPad so I can't write much now; will do so later.

    But you are one of the few, and I agree with you, that understands how much oil the Bakken is capable of producing. Every estimate of adequate / needed takeaway capacity has been wrong, or hasn't kept up.

    This all begs the question why pipeline companies don't just use the easements / rights-of-way they already have/had, something others have said. Having said that, I think I know the reason, but, as noted, on the iPad, I need to expand later.

    But I really appreciate this info re: TransCanada and the Bakken pipeline. Later, I will include it as a stand-alone post.

    Thank you very much for commenting.

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  8. Bruce the question of why TransCanada didn't use more of its existing Keystone 1 easements / rights-of-way mystified me for some time.

    I finally decided that a project of this size and complexity must have presented management with multiple choices. Therefore, economics, various pipeline logistical considerations, and their view of the political environment in each state had to dictate their final choice.

    FWIW, in November of this year here is what a TransCanada spokesperson had to say on the subject:

    November 2011 Alberta Beef Magazine - Keystone spokesperson Darren Paquin, Stakeholder Relations, talks about the Keystone project.

    Q: What is the process when dealing with landowners to run the pipeline on their property?

    A: For all Phases of Keystone, we work closely with our landowners to come to a negotiated settlement. We consult with landowners from the planning stage, pre-construction, construction and post construction stages of the project to ensure we minimize disruption, address any concerns as quickly as possible and generally, to ensure we continue to build on the strong relationships we’ve had with our landowners during more than 60 years of operations.

    When we propose a new pipeline project, we try to parallel existing rights-of-way, whenever possible, to minimize new disturbance.

    For example, in Canada, Keystone XL parallels the Keystone Phase 1 for most of the Alberta portion of the line and then parallels the Foothills Pipeline in Saskatchewan to the U.S. border. The majority of the landowners on the Canadian section have had pipelines on their land for many years.

    See http://albertabeef.ca/displayarticle/?sel_record=3851 for the full interview.

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  9. See my post of December 31, 2011, which I just added after reading the above comment.

    That's why I love the blog; and, I really appreciate the education the Air Force gave me in strategic decision-making. The TransCanada Keystone XL is a case study in strategic decision making.

    Several big things were happening all at once when the Keystone XL was being mapped: a) change in US administration -- to an administration out to kill the fossil fuel industry; b) the Bakken potential was not yet known; c) some folks saw the Canadian oil sands as essential for the US d) pipelines are the safest means to ship oil, but a series of oil leaks just as Keystone XL was being publicly discussed in the mainstream media complicated that message; e) Warren Buffett buys Burlington Northern which had its own agenda.

    There are probably issues I'm missing but this would be enough for a case study.

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  10. Obama can stall the Keystone making his environmental friends happy. This allows his money friends to get on the right side of the money to be made from the eventual location of and completion of the inevitable pipeline.

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  11. I agree completely; it's all about politics and money, not science. These stories end up with strange bedfellows: in this case faux-liberals and Big Oil (TransCanada): both are in a win-win or a lose-lose depending on how it all turns out.

    TransCanada has to be worried -- or at least its investors have to be worried -- that the Keystone XL does not turn into a Pyrrhic victory: a victory with such a devastating cost to the victor that it carries the implication that another such victory will ultimately cause defeat (Wiki).

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  12. The Keystone Pipeline XL PROJECT is going to be a hot USA energy topic even after it is finally approved or disapproved by the USA’s State Department regardless of who is elected president in 2012. Below are 5 internet sites that will be good sources of current Keystone Pipeline PROJECT developments in the months ahead.

    1. Globe and Mail -Higher profile will make Keystone harder to stop - Konrad Yakabuski Washington Published Sunday, Dec. 18, 2011 8:29PM EST Last updated Friday, Dec. 23, 2011 4:00PM EST
    See: http://www.theglobeandmail.com/news/world/konrad-yakabuski/higher-profile-will-make-keystone-harder-to-stop/article2275624/ or http://license.icopyright.net/user/viewFreeUse.act?fuid=MTUxMTY3OTY%3D

    2. Globe and Mail – Saturday, December 24, 2011 The politics of pipe: Keystone's troubled route
    By Nathan Vanderklippe Building pipelines has always been an engineering challenge. The Keystone XL project shows that other issues – water quality, climate change - are taking centre stage – Excellent article about How and Why TransCanada “dropped the PR ball” on Keystone XL. IMHO, this article is a must read for all USA oil energy executives.
    See http://www.theglobeandmail.com/globe-investor/the-politics-of-pipe-keystones-troubled-route/article2282805/singlepage/#articlecontent or
    http://license.icopyright.net/user/viewFreeUse.act?fuid=MTUxMTYyMzE%3D

    3. 12/24/ 11 - CALGARY — TransCanada Corp. says construction on its controversial Keystone XL pipeline from Alberta to Texas — except for a stretch through Nebraska — may begin within months now that U.S. President Barack Obama has signed a bill that forces his administration to make a decision on the project within 60 days. “This bill allows construction work to take place in five of the six states where the route is confirmed,” said TransCanada spokesman Shawn Howard. A provision compelling the Obama administration to make a quick decision on Keystone XL was tacked onto legislation extending payroll tax cuts, the subject of intense wrangling in Congress in recent days. Rather than using his presidential veto power, Obama signed the bill on Friday. See http://thechronicleherald.ca/business/46109-keystone-xl-start-may-be-near-transcanada-corp-says

    4. http://en.wikipedia.org/wiki/Keystone_Pipeline -This page was last modified on 3 January 2012 at 00:05. This is an excellent constantly updated objective chronological history of TransCanada’s Keystone project.

    Analysts believe that including the Alberta Clipper pipeline owned by TransCanada's competitor Enbridge, there is an extensive overcapacity of oil pipelines from Canada and after completion of the Keystone XL line oil pipelines to the U.S. will run nearly half-empty.[39] See Note 39 - Globe & Mail 4/29/10 article about Keystone Pipeline creating potential USA pipeline overcapacity. (VBG!!!) See http://www.theglobeandmail.com/report-on-business/pipeline-fees-revolt-widens/article1548807/?service=mobile&page=0#article

    5. Obama, Congress Begin New Year Locked in Keystone Pipeline Dispute Published January 02, 2012 | Associated Press Read more: http://www.foxnews.com/politics/2012/01/02/obama-congress-begin-new-year-locked-in-keystone-pipeline-dispute/print#ixzz1iLnVyUVy or
    http://www.foxnews.com/politics/2012/01/02/obama-congress-begin-new-year-locked-in-keystone-pipeline-dispute/print

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  13. Thank you very much for such a complete post/comment.

    Because one cannot click on URLs within comments, I have re-posted all those links up in the main body.

    Again, thank you. It will be interesting to follow this issue, but I do believe that the President will accept a new submission from TransCanada for Keystone XL 2.0, and that the review will be completed as "expeditiously as possible," code for "after the election."

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  14. Bruce, Thank you again for the humongous amount of the time and energy you have devoted over the past several years to maintaining, updating, and upgrading one of the most informative shale oil blogs on the internet.

    It still boggles my mind where you find the time and energy at this stage of your life to do it all by yourself. In addition to all your other accomplishments, you must be a computer internet blog genius to be able to constantly update and maintain all the side bar topics on your Million Dollar Way Blog.

    Also, I would like to particularly thank you for the expeditious and excellent manner in which you have responded to my recent Keystone XL comments to you. Thanx and Good Luck and Good Bakken Investing. HLW3333 January 2, 2012 11:06 PM

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  15. Thank you for your kind comments.

    When I stick to the Bakken, I have to admit, there is a lot of good information here. It is quite interesting to go back and read earlier posts on the Bakken. It's hard to believe that it's only been about three years. It's amazing how far "we've" come.

    The Keystone is a "funny" issue. I truly lost interest in the Keystone once it became fully politicized, but due to readers' input, it seems I have devoted more space to it than I ever imagined. Every time I want to stop talking about it, something new pops up.

    I always check out the URLs/links before posting a comment, and your links presented a very balanced view. I was happy to post it.

    So, we'll see.

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