Trump issues new permit for Keystone XL oil pipeline

Yes! This news put a big grin on my face this morning.  Oil & Gas is neither dead nor dying, and the Oil & Gas industry is not going away any time soon.

The global economy runs on hydrocarbons.  Ignoring that fact (like AOC) and jumping up and down and holding your breath until you pass out like a 3 year old throwing a temper tantrum simply DOES NOT CHANGE THE FACT that the global economy runs on hydrocarbons.  And will continue to do so for decades, for the forseeable future.

Simple question for the EV fanatics ... what are the main energy sources for generating electricity globally?  

(Hint, it's *not* unicorn farts or fairy dust...)

< coughhydrocarbons  < cough >

 

And now, Trump's presidential permit to allow Keystone XL pipeline to proceed undercuts and bypasses Obama's last minute shenanigans to hurt U.S. oil & gas, just before Obama left office.  Good riddance to Obama, one of the absolute worst presidents in the history of the U.S. in my opinion.

Enjoy : )

Trump issues new permit for Keystone XL oil pipeline

Over a decade after it was first proposed, the long stalled Keystone XL oil pipeline has been issued a new presidential permit, intended to speed up the project’s development.

The pipeline is intended to carry over 800,000 barrels per day of crude from Canada’s oil sands through the Midwest, to the Gulf Coast. It’s estimated to cost around $8 billion.

It was initially proposed in 2008, but has been beset by legal challenges and environmental reviews for years. In 2015 the project was rejected by President Barack Obama, but the decision was reversed by Donald Trump soon after he took office in 2017.

The initial permits - a requirement for facilities that cross US borders - were issued by the State Department, but were subject to deep environmental reviews which have then been the subject of multiple lawsuits by environmental agencies, holding up the project. 

The permit issued this week by President Trump, however, will not be subject to the same environmental review requirements, so will undercut any legal proceedings.

A White House spokesman said: “Specifically, this permit reinforces, as should have been clear all along, that the presidential permit is indeed an exercise of presidential authority that is not subject to judicial review under the Administrative Procedure Act.”

The proposed development and route of the Keystone XL oil pipeline

In a statement, TransCanada said the order “clarifies the national importance of Keystone XL and aims to bring more than 10 years of environmental review to closure.”

The groups’ president and CEO, Russ Girling, added: “[President Trump] has been clear that he wants to create jobs and advance U.S. energy security and the Keystone XL pipeline does both of those things.”

“The environmental reviews are clear: the project can be built and operated in an environmentally sustainable and responsible way.”

The US Chamber of Commerce also hailed the action, saying in a statement: “it shouldn’t take longer to approve a project than to build it.”

Acting president of the chamber’s Global Energy Institute, Christopher Guith, said “Review after review has found it can be built and operated in an environmentally responsible way. It’s time to move forward.”

...

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We need this pipeline, but seems the freakin' environmentalists keep throwing lawsuits. That link was from Jan. 4th, 3 months old so no sure where the litigation is sitting now. Spotted owl, might get disturbed? lol  Hoping no more hurdles for sure. Been wayyyyy too long stalled in the courts.

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The real problem with the Keystone XL is that portions of the original path were over the Ogallala Aquifer, a vast body of underground water that contains a volume equal to all of Lake Huron.  The Ogallala starts at the south Dakota-Nebraska Border, and runs down to central Texas.  It is the largest Aquifer in the world.  It is tapped by the farmers of millions of acres out there in the Central States for fresh water for their crops, cattle, and hog operations.  If that gets contaminated by some oil spill, then bye-bye US Agriculture. 

Now, can that pipeline "go around"?  Of course it can.  But going around costs more money, a lot more money. You can go on the East side, but then you are skirting the West Bank of the Mississippi, which is valuable land, has big cities such as St Louis (Missouri), and is going to cost more for the land use.  Plus the soil will be flooded many times and be subject to saturated soils and thus water corrosion. You can go by the Ogallala on the West, but that adds miles - lots of miles.  Or, you can go down the middle and over the Ogallala and hope and pray that the pipe will never breach and that no oil will ever spill.  That last assumption is not very promising. 

Oil is an inconvenient mineral slime.  You haul vast quantities of that slime around at some risk.  What you don't do it put it where the damage will be irreversible.  Unfortunately, the Keystone is pencilled to run where, if it breaches, yes the damage will be irreversible. For you pipe enthusiasts, don't say you were not warned. 

Are there other solutions?  Sure there are.  Does anybody want to hear them?  Nope. 

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5 minutes ago, Jan van Eck said:

Are there other solutions?  Sure there are.  Does anybody want to hear them?  Nope. 

Sure enough, there is risks in going underground, personally i'd engineer above and have enough pressure sensors and along the way with cutoff valves to minimize any potential leak. A leak of 50bbls while sound like a lot is really 280 gallons. Semi's carry 300 in diesel when full and when they wreck and tanks are ruptured you don't hear squat about it. 280 gallons of crude can be cleaned up with very minimal damage. Just my point of view. Right now in Nebraska as the flood subsides how many cars and trucks and sewage plants got flooded? More gas and motor oil and raw sewage leeched back into the ground. Will anybody in mainstream media point this out. Nope.

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Just now, Old-Ruffneck said:

Sure enough, there is risks in going underground, personally i'd engineer above and have enough pressure sensors and along the way with cutoff valves to minimize any potential leak. A leak of 50bbls while sound like a lot is really 280 gallons. Semi's carry 300 in diesel when full and when they wreck and tanks are ruptured you don't hear squat about it. 280 gallons of crude can be cleaned up with very minimal damage. Just my point of view. Right now in Nebraska as the flood subsides how many cars and trucks and sewage plants got flooded? More gas and motor oil and raw sewage leeched back into the ground. Will anybody in mainstream media point this out. Nope.

All true, of course (except for the math, but not to quibble).  Two obstacles:  you cannot build that pipeline across rivers above ground without constructing a high bridge, especially if there is any river traffic.  And you have all these roadways which would require the pipe to have their own bridges built, plus enough reinforcement in the supports to prevent them from crashing down if some truck or tank runs into them. 

Heavy oil will sink down into the soil, how far is a function of how much.  How big is the pipe?  How much spacing between shut-off valves? A lot more than 50 bbls is going to spill if that pipe gets busted.  Just saying. 

PS: it is possible to build houses and garages to float up during a flood, so everything stays toasty dry and the car spills nothing and the house oil tank stays above water. It costs a bit more, not all that much more, but do it once and your problems are gone forever.  You sit in your house like on a houseboat, admiring the wast lakes of water around you while enjoying your tea. Hey, why not.  This business of scraping mud out of your bedroom and pulling up soiled carpets gets old fast. Better to float the boat. 

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30 minutes ago, Old-Ruffneck said:

We need this pipeline, but seems the freakin' environmentalists keep throwing lawsuits. That link was from Jan. 4th, 3 months old so no sure where the litigation is sitting now. Spotted owl, might get disturbed? lol  Hoping no more hurdles for sure. Been wayyyyy too long stalled in the courts.

This is current news, as far as I know. 

Here is EcoWatch article from earlier this week, clearly unhappy about this:

Trump Issues New Presidential Permit for Keystone XL Pipeline

President Trump signed an order greenlighting the construction of the Keystone XL pipelineFriday, a move that circumvents a court's decision to block a previous federal permit on the long-delayed project.

The new permit gives owner TransCanada permission to "construct, connect, operate and maintain" the pipeline on U.S. territory. A district judge in Montana last fall ruled that the State Department had not sufficiently considered the environmental impacts of the pipeline and ordered a new environmental review. But Trump's new order uses presidential power to circumvent the environmental restrictions applied to agencies.

< Short intermission as I burst out laughing at this b*tthurt temper tantrum below >

 

"By his action today in purporting to authorize construction" and ignoring previous rulings, lawyer Stephan Volker, who represents environmentalists involved in litigation against the pipeline, told the AP, "President Trump has launched a direct assault on our system of governance."

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Related earlier post here on Oil Price (not by me)

Federal judge reinstates ban

So, in the twilight hours of the Obama administration, he writes an executive order permanently banning Arctic drilling. Trump wrote an executive order overturning that ban. A federal judge who just happens to have been appointed by Obama reinstates the ban. Am I missing anything here

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1 hour ago, Jan van Eck said:

The real problem with the Keystone XL is that portions of the original path were over the Ogallala Aquifer,

Lets see, the thousands of miles of pipes across said aquifer are not a problem but one new pipeline is....  🙄

Bacteria eat oil.  Tasty.  Problem solved in a couple years no matter how big the spill. 

Said aquifer is absent in many areas, and lakes in others.  It is NOT a single lake.  Depends on ground porosity like all ground water and it follows a thing called gravity.  XL pipeline boys are now wishing they had taken the western approach as it would have gone through the Permian and several other high plains basins allowing them to pick up light shale oil and mix. 

Why do you not go post your anti logic/science on envirowacko forums?  They love irrational BS

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2 hours ago, Jan van Eck said:

The real problem with the Keystone XL is that portions of the original path were over the Ogallala Aquifer, a vast body of underground water that contains a volume equal to all of Lake Huron.  The Ogallala starts at the south Dakota-Nebraska Border, and runs down to central Texas.  It is the largest Aquifer in the world.  It is tapped by the farmers of millions of acres out there in the Central States for fresh water for their crops, cattle, and hog operations.  If that gets contaminated by some oil spill, then bye-bye US Agriculture. 

Now, can that pipeline "go around"?  Of course it can.  But going around costs more money, a lot more money. You can go on the East side, but then you are skirting the West Bank of the Mississippi, which is valuable land, has big cities such as St Louis (Missouri), and is going to cost more for the land use.  Plus the soil will be flooded many times and be subject to saturated soils…

Oil is an inconvenient mineral slime.  You haul vast quantities of that slime around at some risk.  What you don't do it put it where the damage will be irreversible.  Unfortunately, the Keystone is pencilled to run where, if it breaches, yes the damage will be irreversible. For you pipe enthusiasts, don't say you were not warned. 

Are there other solutions?  Sure there are.  Does anybody want to hear them?  Nope. 

You seem to be an oil guy so I've got a few oil questions for you. What is the depth of that aquifer? What is the intervening rock and soil makeup? We know from pipeline specs that WCS has to be adjusted from the 8-12 API the bitumen starts at to 20.5 after diluent. However as someone who has worked to inveigle connate oil at that natural spec to migrate just a few feet to the perfs at relatively high bottom hole pressure and temps, I'm curious what magic is involved to make it migrate hundreds of feet down to the aquifer with only gravity as the driver, especially given that the pentanes plus in the diluent will very rapidly dissociate and volatilize away from the bitumen. What Reynolds number are you going to use to support your thesis? 

Not busting your chops, just holding your feet (a little bit) to the fire you're lighting.   ;)

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(edited)

3 hours ago, Jan van Eck said:

The real problem with the Keystone XL is that portions of the original path were over the Ogallala Aquifer, a vast body of underground water that contains a volume equal to all of Lake Huron.  The Ogallala starts at the south Dakota-Nebraska Border, and runs down to central Texas.  It is the largest Aquifer in the world.  It is tapped by the farmers of millions of acres out there in the Central States for fresh water for their crops, cattle, and hog operations.  If that gets contaminated by some oil spill, then bye-bye US Agriculture. 

Now, can that pipeline "go around"?  Of course it can.  But going around costs more money, a lot more money. You can go on the East side, but then you are skirting the West Bank of the Mississippi, which is valuable land, has big cities such as St Louis (Missouri), and is going to cost more for the land use.  Plus the soil will be flooded many times and be subject to saturated soils and thus water corrosion. You can go by the Ogallala on the West, but that adds miles - lots of miles.  Or, you can go down the middle and over the Ogallala and hope and pray that the pipe will never breach and that no oil will ever spill.  That last assumption is not very promising. 

Oil is an inconvenient mineral slime.  You haul vast quantities of that slime around at some risk.  What you don't do it put it where the damage will be irreversible.  Unfortunately, the Keystone is pencilled to run where, if it breaches, yes the damage will be irreversible. For you pipe enthusiasts, don't say you were not warned. 

Are there other solutions?  Sure there are.  Does anybody want to hear them?  Nope. 

There are very few bodies of water in the world that are not polluted or highly polluted. Lake Huron is polluted. The Mississippi River is highly polluted. You are assuming that vast amounts of crude oil would find its way, unfiltered by the soil, to pollute a body of water as large as Lake Huron. That sounds like scaremongering to me. There are oil and natural gas seeps in many areas around the world, then we have all of the man made chemicals that find their way into the oceans via the rivers of the world. 

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1 hour ago, Ward Smith said:

You seem to be an oil guy so I've got a few oil questions for you. What is the depth of that aquifer? What is the intervening rock and soil makeup? We know from pipeline specs that WCS has to be adjusted from the 8-12 API the bitumen starts at to 20.5 after diluent. However as someone who has worked to inveigle connate oil at that natural spec to migrate just a few feet to the perfs at relatively high bottom hole pressure and temps, I'm curious what magic is involved to make it migrate hundreds of feet down to the aquifer with only gravity as the driver, especially given that the pentanes plus in the diluent will very rapidly dissociate and volatilize away from the bitumen. What Reynolds number are you going to use to support your thesis? 

Not busting your chops, just holding your feet (a little bit) to the fire you're lighting.   ;)

Responding to the points in sequence:  no, I am not an oil guy.  What I lay out is merely the thinking of those unhappy with the Keystone.  Also, you have no control over what future generations might be tempted to use that pipeline for.  Personally, I would only ship Alberta crude by type 112 rail tankcars,  but for different reasons than you might imagine.  Now, as to the aquifer: it is quite shallow, lying about 120 feet below the surface, and in places breaching the surface. The overburden is mostly soils, of which anywhere from sixteen to thirty feet is "topsoil," where the aquifer does not reach the surface.  AFAIK, there is no rock layer over the aquifer, nor a clay layer.  The aquifer is or was quite deep, but at this point at least the first hundred has been pumped by surface users for irrigation purposes.  It is a vast aquifer, running perhaps a thousand miles. Water seeping out of the aquifer, where it lies close to the surface, is what feeds the rivers flowing through there, specifically the Nebraska River.  The aquifer is the source for easily 30% of the groundwater irrigation of the USA, probably a lot higher these days, as California water has been drying up at an alarming rate. 

Now, as to crude migration:  I would predict that the flow inside that large-bore pipe would be laminar, and the boundary-layer aspects of that flow would leave an adhesion layer along the pipe wall.  If you are pumping to the point where crude gets past the critical Reynolds Number to become turbulent flow, then you would have to be putting an enormous amount of energy into the oil. Since I am not an "oil guy," I would shudder to estimate, and in any event the equations for determining Reynolds Numbers are complex and require lots of assumptions as to input values.  You could at least in theory create an emulsion and then pump that, and if you put enough energy into the emulsion then yes I can see you would go past the critical Reynolds Number (I would hazard a guess that would be say 2,200?  1,875?  You tell us.). But for that thick Canadian stuff you might be as low as 0.05.  I really have no idea as that is not something I have studied. But if you go to an emulsion and then go to turbulent flow then you will be facing metal erosion and additional to contamination of the product eventually you will be scouring out weak spots in the pipe and yes it will eventually fail.  Might take decades, of course, but everything will fail at some point, even the Enbridge line. 

Will that crude migrate?  Depends a lot on the OAT  (outside air temp).  In the dead of Winter, not much.  In the heat of Summer, yup it would. How far, depends on what you do with the stuff before you attempt to pipe.  If you are going to pipe heavy crude for 1,600 miles then you are going to be hitting that stuff with lots of diluent, and how that behaves over distance and pressure drop, I dunno, but it is not going to do what you model it to do, there are always surprises. The consequences of a (very large) crude spill in the cold Prince WIlliam Sound are not encouraging; the material poisoned the seabed and it remains, stubbornly, there today. hey, maybe you can build that pipe and lay it right over that big Aquifer and get away with it, and nothing ever goes wrong, but why take the chance? Especially when you can "go around."  Cheers.

And yes, you are busting my chops, but that's OK, I can take the pummelling. 😊

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1 hour ago, ronwagn said:

There are very few bodies of water in the world that are not polluted or highly polluted. Lake Huron is polluted. The Mississippi River is highly polluted. You are assuming that vast amounts of crude oil would find its way, unfiltered by the soil, to pollute a body of water as large as Lake Huron. That sounds like scaremongering to me. There are oil and natural gas seeps in many areas around the world, then we have all of the man made chemicals that find their way into the oceans via the rivers of the world. 

All true, Ron.  Thus, if you have this really nice aquifer that is NOT polluted, are you not better off to keep it that way? Hey, ya gotta drink the stuff! 

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4 minutes ago, Jan van Eck said:

Responding to the points in sequence:  no, I am not an oil guy.  What I lay out is merely the thinking of those unhappy with the Keystone.  Also, you have no control over what future generations might be tempted to use that pipeline for.  Personally, I would only ship Alberta crude by type 112 rail tankcars,  but for different reasons than you might imagine.  Now, as to the aquifer: it is quite shallow, lying about 120 feet below the surface, and in places breaching the surface. The overburden is mostly soils, of which anywhere from sixteen to thirty feet is "topsoil," where the aquifer does not reach the surface.  AFAIK, there is no rock layer over the aquifer, nor a clay layer.  The aquifer is or was quite deep, but at this point at least the first hundred has been pumped by surface users for irrigation purposes.  It is a vast aquifer, running perhaps a thousand miles. Water seeping out of the aquifer, where it lies close to the surface, is what feeds the rivers flowing through there, specifically the Nebraska River.  The aquifer is the source for easily 30% of the groundwater irrigation of the USA, probably a lot higher these days, as California water has been drying up at an alarming rate. 

Now, as to crude migration:  I would predict that the flow inside that large-bore pipe would be laminar, and the boundary-layer aspects of that flow would leave an adhesion layer along the pipe wall.  If you are pumping to the point where crude gets past the critical Reynolds Number to become turbulent flow, then you would have to be putting an enormous amount of energy into the oil. Since I am not an "oil guy," I would shudder to estimate, and in any event the equations for determining Reynolds Numbers are complex and require lots of assumptions as to input values.  You could at least in theory create an emulsion and then pump that, and if you put enough energy into the emulsion then yes I can see you would go past the critical Reynolds Number (I would hazard a guess that would be say 2,200?  1,875?  You tell us.). But for that thick Canadian stuff you might be as low as 0.05.  I really have no idea as that is not something I have studied. But if you go to an emulsion and then go to turbulent flow then you will be facing metal erosion and additional to contamination of the product eventually you will be scouring out weak spots in the pipe and yes it will eventually fail.  Might take decades, of course, but everything will fail at some point, even the Enbridge line. 

Will that crude migrate?  Depends a lot on the OAT  (outside air temp).  In the dead of Winter, not much.  In the heat of Summer, yup it would. How far, depends on what you do with the stuff before you attempt to pipe.  If you are going to pipe heavy crude for 1,600 miles then you are going to be hitting that stuff with lots of diluent, and how that behaves over distance and pressure drop, I dunno, but it is not going to do what you model it to do, there are always surprises. The consequences of a (very large) crude spill in the cold Prince WIlliam Sound are not encouraging; the material poisoned the seabed and it remains, stubbornly, there today. hey, maybe you can build that pipe and lay it right over that big Aquifer and get away with it, and nothing ever goes wrong, but why take the chance? Especially when you can "go around."  Cheers.

And yes, you are busting my chops, but that's OK, I can take the pummelling. 😊

Thanks for your kind reply. I wasn't looking at the Reynolds number in the pipeline but as part of the computational fluid dynamics of the oil migration through the soil and aquifer. While there are indeed areas of the aquifer that are quite near the surface, as we head south it is thousands of feet deep. I'm not certain of the proposed path of the pipeline. What I AM certain of is the double walled design of current pipelines is Vastly superior to the single walled designs that are still chugging along over that self same aquifer. The Kalamazoo River Spill was an unmitigated disaster and the operator is over a billion dollars lighter after that fiasco. That pipeline was over 40 years old. Recently some bright bulbs refused to allow a refurbishment of pipelines in Minnesota. I guess they prefer to play roulette with a 65 year old pipeline as is Governor Snyder in Michigan. 

You'll see that the dilbit (which I'm calling WCS for Western Canada Select) did indeed dissociate and the diluent evaporated. The bitumen sank, but then again it was already in the water. Getting To the water, if it had to migrate through rock and soil is a near impossible feat. The viscosity of the bitumen is from hundreds of thousands to over a million centipoise. How far would peanut butter migrate? It's far less viscous than the bitumen is. 

As for rail? Can you recall a rail Disaster in Eastern Canada a few years back? How big was the fire and how many died? Did any of the oil that didn't burn make its way into any water there? Humans are imperfect everywhere. Pipelines operating well beyond their life expectancy are disasters waiting to happen, the solution isn't to keep operating them, nor replace them with even more dangerous train transport with human error multiplying along every inch of track. The solution is to install the new, double walled, highly instrumented designs and quit fighting progress. IMHO

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5 hours ago, Ward Smith said:

 

As for rail? Can you recall a rail Disaster in Eastern Canada a few years back? How big was the fire and how many died? Did any of the oil that didn't burn make its way into any water there? Humans are imperfect everywhere. Pipelines operating well beyond their life expectancy are disasters waiting to happen, the solution isn't to keep operating them, nor replace them with even more dangerous train transport with human error multiplying along every inch of track. The solution is to install the new, double walled, highly instrumented designs and quit fighting progress. IMHO

Yes, I am fully aware of the sequence of events at Lac Megantic; I actually prepared a Presentation for a Rail Symposium titled "What went wrong at Lac Megantic?"  I also know the owner of that RR, another Yalie incidentally.  His two RRs ended up bankrupt as a result. I attempted to buy that RR out of the bankruptcy court but ran out of money; the guys that did buy it were hedge funders with unlimited cash.  Now that train wreck was the direct result of personnel decisions, in that case the decision of one driver to leave that train unattended and not set the hand brakes.  It breaks so many Rules that it is just astonishing. Moving on to the oil, what was being transported was Bakken light crude to the refinery in St. John, New Brunswick, owned by Irving Oil Co.  What is not recognized is that that crude contained entrained gaseous materials, in bubble form, which were not purged out at the loading area.  As the train rumbled East, the gaseous materials came out of solution and formed a pressure bubble at the top of the cars, basically turning the tank-cars into rolling time bombs. 

You cannot seriously maintain that the "peanut butter" material, as you describe it, has the flammability of that Bakken Light.  As you point out, WCS is totally thick, and presumably is not going to ignite, much less migrate. So placing WCS into a railcar is a bit like loading asphalt; it is not going anywhere, even if that railcar splits open.  When tarry materials are trained, then you need no energy to pump it, and a lot less diluent to load it. As a practical matter that train might as well be hauling stone blocks.  The energy required is only to overcome the inertia of the train and the friction of a steel wheel on a steel rail, which is quite low.  Your rail "pipeline" can move material along in a rolling "pipe" some eight feet in diameter and a mile long, at 50 miles per hour, using 3,500 HP.  And it can go to wherever the refinery is, simply by switching the tracks.  Hard to beat. 

Then I hear these arguments about pipe being inherently cheaper than rail.  It is not.  Pipe takes a tremendous capital cost, while the rail trackage is already there, and if you need more, all you do is lay down the gravel ballast, and you drop in place the ties and rails.  It is cheap and fast to build, and you can take the materials up and use them elsewhere when the oilfield peters out. It is "expensive" only because railroads are inherent monopolies without regulation in the USA, so the RR owners can charge what the traffic will bear.  That has no real relation to actual costs. You might want to keep that in mind.

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6 hours ago, Jan van Eck said:

All true, Ron.  Thus, if you have this really nice aquifer that is NOT polluted, are you not better off to keep it that way? Hey, ya gotta drink the stuff! 

Guaranteed the farmers have been polluting with nitrogens and other chemicals to make their crops grow much faster, and produce more. Just a little east here in central Illinois the san koty aquafer very high in nitrates due to nitrogen. I bet if ya sample the said aquifer you will come up with about the same pollutants. Corn and beans take a lot of chemicals to produce the bio-fuels and the farmers are putting down wicked crap to make it grow. And yes I am on a well and it's high in nitrates. Didn't test for other crap as I don't wanna know what specific carcinogens are in my water. 

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13 minutes ago, Jan van Eck said:

Then I hear these arguments about pipe being inherently cheaper than rail. 

Long tern (25yrs+) rail will lose in the battle of cost savings. See, Warren Buffet bought BNSF knowing his money would transport the oil and keep the pipelines at bay. The man is not ignorant. Look where his lines run and the vested interest in buy the RR. 

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14 hours ago, Old-Ruffneck said:

We need this pipeline, but seems the freakin' environmentalists keep throwing lawsuits. That link was from Jan. 4th, 3 months old so no sure where the litigation is sitting now. Spotted owl, might get disturbed? lol  Hoping no more hurdles for sure. Been wayyyyy too long stalled in the courts.

The greenies know they probably can't stop the project altogether, but they may be able to stall it in the courts for long enough to make it unprofitable, possible to the point where it gets canceled.

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4 hours ago, Jan van Eck said:

Yes, I am fully aware of the sequence of events at Lac Megantic; I actually prepared a Presentation for a Rail Symposium titled "What went wrong at Lac Megantic?"  I also know the owner of that RR, another Yalie incidentally.  His two RRs ended up bankrupt as a result. I attempted to buy that RR out of the bankruptcy court but ran out of money; the guys that did buy it were hedge funders with unlimited cash.  Now that train wreck was the direct result of personnel decisions, in that case the decision of one driver to leave that train unattended and not set the hand brakes.  It breaks so many Rules that it is just astonishing. Moving on to the oil, what was being transported was Bakken light crude to the refinery in St. John, New Brunswick, owned by Irving Oil Co.  What is not recognized is that that crude contained entrained gaseous materials, in bubble form, which were not purged out at the loading area.  As the train rumbled East, the gaseous materials came out of solution and formed a pressure bubble at the top of the cars, basically turning the tank-cars into rolling time bombs. 

You cannot seriously maintain that the "peanut butter" material, as you describe it, has the flammability of that Bakken Light.  As you point out, WCS is totally thick, and presumably is not going to ignite, much less migrate. So placing WCS into a railcar is a bit like loading asphalt; it is not going anywhere, even if that railcar splits open.  When tarry materials are trained, then you need no energy to pump it, and a lot less diluent to load it. As a practical matter that train might as well be hauling stone blocks.  The energy required is only to overcome the inertia of the train and the friction of a steel wheel on a steel rail, which is quite low.  Your rail "pipeline" can move material along in a rolling "pipe" some eight feet in diameter and a mile long, at 50 miles per hour, using 3,500 HP.  And it can go to wherever the refinery is, simply by switching the tracks.  Hard to beat. 

Then I hear these arguments about pipe being inherently cheaper than rail.  It is not.  Pipe takes a tremendous capital cost, while the rail trackage is already there, and if you need more, all you do is lay down the gravel ballast, and you drop in place the ties and rails.  It is cheap and fast to build, and you can take the materials up and use them elsewhere when the oilfield peters out. It is "expensive" only because railroads are inherent monopolies without regulation in the USA, so the RR owners can charge what the traffic will bear.  That has no real relation to actual costs. You might want to keep that in mind.

OK, I see you agree with me on human error. Frankly I'd be all for trains if I didn't personally know "engineers" a term carried over from when they were far closer to being engineers than they are now. We don't have to worry about boilers exploding and men who understand steam tables, so now anyone with a pulse who is willing to genuflect to the union gets to be an "engineer". I'd be all in on rail if they were fully automated. If they can make self driving cars that operate on roads, why can't they make self driving trains that operate unidimensionally? Oh right, unions. 

I happened to be present at the joint CCQTA/COQA meeting where bitumen by rail was discussed, at length. You shouldn't conflate WCS with raw bitumen. The volatiles in WCS can "bubble out" just as readily as the Bakken product did. Furthermore, getting raw bitumen loaded and unloaded is no trivial matter, nor is cleaning the cars. In fact much of the meeting concerned exactly that. For lots of reasons, operators add diluent as soon as possible near the wellhead. It's relatively rare to see it "raw". Because as discussed it has horrible viscosity. Put it in a rail car and how do you get it All out? Scrape? Wash with xylene? As you said, it's "tar" and every road tells us how "tar" flows. 

Actually the best solution is heated railcars, but How they are heated matters. No open flames obviously. 

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4 hours ago, Old-Ruffneck said:

Long tern (25yrs+) rail will lose in the battle of cost savings. See, Warren Buffet bought BNSF knowing his money would transport the oil and keep the pipelines at bay. The man is not ignorant. Look where his lines run and the vested interest in buy the RR. 

The cynic in me says Buffet paid off Obama one way or another. Because of oil, BNSF paid him back his purchase price immediately and it's been a cash cow ever since. That only works when there isn't an alternative. Keystone was looming and created a headwind against the share price. Who knew it would get shut down by the state department? Buffet obviously. 

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(edited)

17 hours ago, Jan van Eck said:

The real problem with the Keystone XL is that portions of the original path were over the Ogallala Aquifer, a vast body of underground water.

In a respect this is like a nuclear plant, the cost of failure, though unlikely, is very high. Saudi Arabia had one of the best aquifers in the world, nicknamed dinosaur water because of it's age. Theirs was/is mostly deeper, and lacking recharge (that 3" a year rainfall just won't do). Now the table is lower, and it's downright undrinkable without reverse osmosis, and even then it tastes like crap. I didn't even like showering in it, but had no choice. The Kingdom now relies heavy on desalination, but that is expensive and consumes a lot of energy. To have 30 million people in KSA, well it makes sense. To rely on something like that anywhere in the mainland USA would be lunacy (maybe in Guam or Hawaii). T Boones Pickens is right about water being the new oil. Think once, twice, and three times, when you risk water for oil.

T Boone even tried to buy up farm land in counties in Texas for the water, and then build pipelines to see cheap water from the Ogallala to Texas cities needing it. Texas has a unique, and really dumb with today's situation, right of capture to the water. So the permits to build the pipelines were blocked. So T-Boone got into the windmill business, and snuck in legislation allowing him to build water pipelines under the new power lines to haul the electricity. But someone figured out that is what he was doing. Remember follow the money, and water is more valuable than oil. Be careful with it. 

And probably not that hard to engineer pipelines to make failures extremely unlikely, but that comes at a cost. And that is not in the interest of the folks involved. btw, I know where you find about $4 billion in inventory of pipe. Aramco is into "get a hunch, buy a bunch". Most pipeline projects I've seen have a wift of graft involved somewhere. Follow the money. Big pipeline projects are motherloads for the steel industry. 

Edited by John Foote
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Great news! Let's go, get it built now! President Trump has approved more pipelines than incompetent Canadian PM Justin Trudeau. 

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1 hour ago, mthebold said:

Before we pumped it out, oil oozed out of the ground and ran into rivers.  Neither nature nor humanity was much bothered by this.  I also suspect the EPA requires oil spills be cleaned up, leaving little/none to soak into the ground. 

The effect of routine pipeline spills on US agriculture would be negligible. 

Most ppl don't know how to equate a spill of say 200,000 gallons, or 4800bbls. I tell people most towns water towers that are fairly new are 1 million gallons. When you compare the size of a water tower it isn't that big. Puts things into more of a perspective of what people can relate too. So even a spill of 5000bbls sounds like a lot, in reality that is a holding pond size on a drilling rig. On soil is not hard to clean up, especially in this day and age. Giant furnaces come to the spill and torch it sterile, haul it off. 

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20 hours ago, Jan van Eck said:

  Unfortunately, the Keystone is pencilled to run where, if it breaches, yes the damage will be irreversible. For you pipe enthusiasts, don't say you were not warned

Are there other solutions?  Sure there are.  Does anybody want to hear them?  Nope. 

You know Jan -we can take that same stuff and mix it with rocks and it becomes asphalt. One parking spot at Walmart is equal to one barrel of that oil -mixed with rocks-and purposely placed on the ground. When it rains -those parking lots all connect to the storm drain system which run into the rivers. Why are you not complaining about that?

Yes pipelines occasionally leak -when they do they get turned off and cleaned up. They do not contaminate half the aquifers from here to the other end of the rainbow where you must live in a tent with your bicycle.

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Key Buyers Push US Oil Exports to Record Highs

Constantly evolving hydraulic fracturing and horizontal drilling technologies have opened up more U.S. petroleum resources than ever imagined. Crude production has boomed 140 percent over the past decade to 12.1 million barrels per day (bpd). During the course of 2018, for instance, output rose nearly 25 percent, even more impressive since domestic prices (WTI) had fallen 23 percent to $46 per barrel by the end of December. This flood of supply is just one of a number of key factors that have allowed U.S. oil exports to rapidly grow.

The U.S. oil business was gifted its historic lift at the end of 2015, when a law change allowed crude sales to go beyond neighbor Canada. In addition, U.S. shale oil is a lighter, sweeter grade, and the country’s refining system is mostly configured to process heavier, sour kinds that have historically been imported from Mexico, Canada, and Venezuela. In other words, combined with very high but flat domestic demand, the U.S. has had a surplus of oil to ship abroad.

Meanwhile, production cuts from OPEC and Russia (a block that is keeping 1.2 million bpd off the global market) have opened up more market share for other suppliers. As compared to the Brent international benchmark, U.S. crude exporters have been bolstered in recent months by a $8-10 per barrel discount for WTI. They can generally make money when the spread is at least $3-4.

Thanks to these factors, U.S. crude oil exports have accompanied production in reaching record highs. Sales have even surpassed 3.6 million bpd in recent weeks. For total crude and products, the U.S. has been exporting around 8.2 million bpd. U.S. crude oil exports reached 24 nations in December. South Korea and Canada have been the two primary buyers, taking in 40 percent of total sales in December (see Figure). The UK and Netherlands have also been taking in more than expected.

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Source: EIA

But the essential goal for the U.S. of course is to better supply the fast growing Asian markets, namely China and India. China is the obvious prime target because it is now the largest oil importer in the world, with crude purchases at 10.3 million bpd in February. Effectively installed in June 2018, however, the U.S-China trade row has been a critical obstacle. China has not officially tariffed U.S. crude but purchases have still plummeted due to CCP pressure on domestic importers.

Up until last June, China had accounted for over 20 percent of all U.S. crude exports, but this sunk to less than 4 percent by the end of December. Even more bearish, U.S. President Trump recently stated that tariffs could remain on China for “a substantial period of time.” Now taking just 8 percent of U.S. crude, India’s plan to lower purchases from U.S.-sanctioned Iran could open the door more for U.S. exporters. The current speculation, however, is that the largest buyers of Iranian crude, including China and India, will receive waivers from the Trump administration again once the current ones expire in early May.

As for the 1 million bpd of U.S. gasoline exports, neighbor Mexico has been taking around 60 percent. Mexico (21 percent), Brazil (13 percent), and Chile (7 percent) were the main buyers of the 1.4 million bpd of U.S. exports of distillate fuels in December. And Japan purchased 33 percent of the 1.6 million bpd of U.S. natural gas liquids shipped abroad, with Canada second at 15 percent and Mexico third at 9 percent.

Total weekly U.S. crude and product exports should be consistently outpacing imports starting in 2020. The U.S. is now expected to surpass Saudi Arabia as the largest oil exporter before the end of this year. Democratic with a market economy, U.S. oil remains attractive to those nations seeking to buffer the outsized influence of OPEC and Russia. To reach full potential, however, the U.S. needs more pipelines and deeper and wider ports along the Gulf of Mexico to access larger crude carriers.

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10 hours ago, Old-Ruffneck said:

Guaranteed the farmers have been polluting with nitrogens and other chemicals to make their crops grow much faster, and produce more. Just a little east here in central Illinois the san koty aquafer very high in nitrates due to nitrogen. I bet if ya sample the said aquifer you will come up with about the same pollutants. Corn and beans take a lot of chemicals to produce the bio-fuels and the farmers are putting down wicked crap to make it grow. And yes I am on a well and it's high in nitrates. Didn't test for other crap as I don't wanna know what specific carcinogens are in my water. 

Yep, confirmed.  I grew up on a Dairy + cash crop farm in the U.S. Midwest.  50 cows and 2 square miles of farm land.  Soybeans were our biggest cash crop, along with corn, wheat and oats.

Every Spring we put truckload after truckload of fertilizer and chemicals on the fields after planting, to increase crop growth.

From memory, the stack of bags of fertilizer used every Spring was around 8 feet tall x 18 feet wide × 12 feet deep (stacked on top of straw bales in a shed to keep the bags of fertilizer dry).  That's a lot of fetilizer, just for our family farm.  Fertilizer is typically nitrogen from urea.  Don't eat fertilizer, it can make you pretty darn sick.

And then later on we usually sprayed highly toxic weed killer on stubborn fields where weeds continued to grow even after we walked up and down every dang row and pulled out the bigger weeds by hand (Pulling weeds by hand is back breaking work, although picking up the fresh Spring crop of new rocks that got pushed up to the surface after the winter freezing / thawing and plowing the field routine was more back breaking than pulling those darn weeds).

And sometimes sprayed liquid ammonia + nitrate + urea solution on the fields to increase crop growth.  Seriously smelly stuff.

Modern cash crop farming is highly chemical intensive.

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