Why President O'Bama Killed The Keystone XL: It Wasn't "XL" Enough; Coal To Natural Gas

It can now be revealed why President O'Bama killed the Keystone XL.

It wasn't big enough.

Quick: what was the estimated cost for the Keystone XL? Let's call it about $7 billion (wiki) but I'm sure you can find figures all over the "map."

The Chinese are talking about a $16 billion pipeline.  And another $11 billion for the coal-to-natural gas plant where the pipeline is headed. Almost $30 billion for a single, multi-province project. Sort of makes the Keystone XL pale in comparison and not worthy of Barry's attention.

China Petroleum & Chemical (Sinopec) has received Beijing's approval for a mega project to turn coal into natural gas as part of the mainland's strategy to increase energy efficiency and cut reliance on oil and gas imports.

Fu Chengyu, the chairman of the nation's second-largest oil and gas producer and the world's second-biggest crude oil refiner, said the project had received "all necessary government approvals", but the budget was not known.

"Since this project involves over a dozen provinces, the overall investment can be known only after a detailed feasibility study is completed," Fu said.

The project involves the construction of an 8,000-kilometre main gas pipeline from Xinjiang Uygur autonomous region to Zhejiang province through Guangdong. Five branch pipelines will also be built.

China is 90 per cent coal self-sufficient but imports almost 60 per cent of its oil and a quarter of its gas usage. Coal gasification subjects coal to high heat and pressure to turn it into gases, which are processed into natural gas and other by-products.

The total cost of the pipeline would exceed 100 billion yuan (HK$126 billion), Fu said, adding Sinopec would lead the project and be responsible for investing in 8 billion cubic metres of annual gas production and transmission capacity. Total capacity will be 30 billion to 36 billion cubic metres (bcm). [US dollars: $16 billion; Hong Kong dollars: $126 billion].

For additional background on this story, see a MDW post back on April 7, 2013:

China announced that it will be building a huge, $11 billion, coal-to-gas facility. Reuters is reporting:

China's state energy giant Sinopec Group envisages investing 70 billion yuan ($11.3 billion) to build the country's largest coal-to-gas project in 8-10 years to meet a rising demand for natural gas, a newspaper said on Sunday. 

Coal-to-gas production facilities in Zhundong in China's northwestern region of Xinjiang will have annual production capacity of 8 billion cubic metres of gas (bcm) .... Coal extracted from two mines in Zhundong will be used to feed coal-to-gas production facilities nearby, the daily said. The coal mines have annual production capacity of 15 million tonnes each. 

Something tells me Sinopec will have no trouble with the permitting process. The CO2 emissions, I imagine, will flow eastward over Portland, OR.