Massive fire on fracking train in Fayette Co., West Virginia in 2015. This scene has become emblematic of the oil glut and some of its most horrific consequences.
Proposed by a Canadian firm (Trans Canada Corp), the Keystone pipeline had been planned to carry 800,000 barrels a day from the Canadian oil sands to the Gulf coast. Republicans and some Democrats argued that the project would create jobs and expand energy resources, while environmentalists said it would encourage a form of oil extraction that produces more gases that warm the planet than normal petroleum
As noted in an earlier blog: http://brane-space.blogspot.com/2012/11/bill-mckibbens-prediction-of-nightmare.html
Climate scientist Bill McKibben has developed models disclosing mathematical limits showing we have roughly 550 gigatons (gT) left of carbon we can deposit anthropogenically into the atmosphere before earthly Hell is unleashed. That “hell” includes the runaway greenhouse effect, to turn our planet into an endlessly burning pile of ash and refuse.
As it turned out the protests did work to stop Keystone during the Obama administration. But once the sleazy Queens real estate dealer got into office - thanks to the Russkies- government approval of the pipeline followed.
Now, Keystone's fortunes appear to have changed again, for the negative. According to a front page story in the WSJ 'Business and Investing' section ('A New Problem for Keystone XL: Oil Companies Don't Want It', June 30):
"Keystone XL is facing a new challenge: The oil producers and refiners the pipeline was originally meant to serve aren’t interested in it anymore. Delayed for nearly a decade by protests and regulatory roadblocks, Keystone XL got the green light in March from President Donald Trump. But the pipeline's operator, TransCanada Corp, is struggling to line up customers to ship crude from Canada to the U.S. Gulf coast."
We further learn:
"TransCanada Chief Executive Russ Girling remains committed to completing Keystone XL and believes it will prove profitable in the long term, say two people familiar with his thinking. But it may be years before the company recoups its investment in the pipeline, these people say.....The lack of interest has put the pipeline's fate in jeopardy. The company, based in Calgary, Alberta, has said it wants enough customers to fill 90% of Keystone's capacity before it proceeds. It started to aggressively court potential customers earlier this year as it seeks to meet that target, according to people familiar with the situation."
But the core problem is "refiners want the flexibility of being able to buy oil from wherever it is cheapest. In a world awash in low-price oil, Canadian crude doesn't look as attractive as it once did. "
So, the Keystone XL is on life support, thanks to the crash in oil prices, now falling nearly 20 percent, making it no longer economically sensible to use the Keystone XL. It's a bigger loss waiting to happen. As we also learn:
"....uncertainty about output growth from Canada's oil sands has given producers pause about signing long-term agreements for space on a pipeline they may not need, people familiar with the matter say."
Nor is there any inclination to alter the situation, i.e. to make it more practical to use the Keystone XL by rationing the oil extracted.. In another WSJ article ('Despite Oil's Fall, Drillers Won't Stop'. July 8) we learn:
"Despite a 17 percent plunge in prices since April, drillers are on pace to break the all time U.S. oil production record, topping 10 million barrels a day by early next year, if not sooner, according to government officials and analysts. U.S. crude fell again on Friday, dropping 2.8 % to $44.23 a barrel on the New York Mercantile Exchange. Yet the U.S. oil rig count rose Friday to the highest level in more than two years. Operators have now put more than 100 rigs back to work from Oklahoma to North Dakota in the past 18 months."
Who are the real 'bad guys' in spelling the evident fall of Keystone XL? Well, not the protesters for sure, despite the fact they had Bill McKibben and the further consequences of global warming on their side. McKibben, as early as 2011, noted the major contributor to push us into a CO2-laden hothouse hell was none other than implementation of the Keystone XL pipeline because of the concentrated carbon it would unleash over years.
According to the July 8 WSJ piece the new bad guys are stock investors, given they have "furnished companies more capital to keep drilling thanks to $57 billion Wall Street has injected into the sector over the past 18 months."
"Money has come from investors in new stock sales and high yield debt, as well as from private equity funds, which have helped provide lifelines to stronger operators. Flush with cash, virtually all of them launched campaigns to boost drilling at the start of 2017 in the hope oil prices could rebound."
In the words of Al Walker, chief executive of Andarko Petroleum Corp.,
"The biggest problem our industry faces today is you guys" referring to investors at a conference last month,
But would lowering drilling matter? Even if companies cut back right now "it wouldn't stop a new wave of oil from hitting the market in the second half of the year."
The irony in this whole episode is that it wasn't Left environmental protesters who brought a halt to this odious pipeline, but the greed mongers themselves. Greed mongers not content with the existing share price of oil but who were determined to pump it up even further - as Al Walker pointed out. Whatever the source let's hope this is finally the end of a project that would have pumped more added CO2 (according to Bill McKibben) than this planet can handle. Well, at least in terms of the humans living and breathing on it.