Tag Archives: pipeline

Obama sets stage for Keystone XL approval

Photo: AP Photo/Charles Dharapak

Photo: AP Photo/Charles Dharapak

In a speech yesterday in President Barack Obama stated the Keystone XL pipeline will be rejected unless it’s clear that it won’t exacerbate global warming.

“Allowing the Keystone pipeline to be built requires a finding that doing so would be in our nation’s interests,” the President said, adding “our national interest would be served only if this project does not significantly exacerbate the problem of carbon pollution.”

President Obama has appeased the opposition while setting Keystone up for approval later this year because Keystone will easily meet the stated requirements.

First, with or without the Keystone pipeline the Alberta oil-sands will increase production over the coming years. The pipeline will not have an impact on this growth or the carbon emissions from the oil-sands production.

Second, the increased shipment of Alberta oil-sands product via the Keystone is intended to replcace heavy oil from Venezuala and other suppliers. So again, the keystone pipeline will not result in a net increase in emissions.

In fact, if the Keystone is not built there will be an increase in emissions as oil-sand bitumen will be shipped to the USA from Alberta buy diesel powered locomotives and also have an increased risk profile compared to shipping via pipeline.

President Obama has set the criteria know that it will be achieved and when approved will be able to defend his decision.

The alternative solution would be to build refining capacity in Canada and ship end products rather then raw bitumen to the USA. The Americans would happily buy it and it would create all those jobs in Canada rather then the USA (apparently they don’t want the jobs or don’t need them in the USA!)

Keystone XL will get built, and so will the Northern Gateway pipeline which will open a secondary market for Canadian oil and gas in Asia as it will also meet the same criteria. It is not good business to be dependent on just one customer just as the USA is not dependent on one supplier.

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Encana’s Horn River “Cabin Gas Plant” location

Encana’s “Cabin Gas plant” will initially process 400 Million cubic feet of natural gas per day. Encana Corp. has committed the first $400 million investment and will expand the plant capacity as the Horn River basin is developed out and production increases.

Cabin gas plant

Cabin gas plant

In addition to Encana’s investment, TransCanada has committed $340 million to building a pipeline from Horn River to Edmonton, and the BC government has committed over $187 million to expand roads and traffic capacity making the Horn River more accessible and lowering overall costs for exploration and development companies in the area.

Is the Alaska pipeline bad for BC gas industry?

TransCanada’s plans to build a pipeline from Alaska to its fellow southern states will bring welcome economic benefits to British Columbia. But will the long term outlook come at an economic cost? According to AJM Petroleum Vice President Ralph Glass,

“While construction of the Alaskan pipeline will likely have a positive impact on Canada’s economy in the shorter term, once it is up and running it will make Alaska into a direct and effective competitor for Alberta and BC’s natural gas industry”

The Alaskan pipeline will increase the available supply to the massive US market and compete against gas supplies in northern BC and Alberta. Increased supply could put more downward pressure on the price of Natural Gas.

While the US builds a pipeline from Alaska to the southern states, BC and the Canadian government should invest in expanding infrastructure in order to open new markets for Canadian natural gas. Investment in infrascructure today would pay future dividends while adding new economic stimulus to western Canada.

Calgary Herald: Alaska seen as threat to gas export market