Oil and Gas Sector-Politics and Image

The National Post is Canada’s second largest national paper.

Peak oil theory and the green energy fad both arise from a failure to ­understand how markets work

Half a dozen years ago, the late peak oil fanatic Matt Simmons claimed in his book Twilight in the Desert that the Saudis were lying about their production capabilities. Earlier this year, Jeff Rubin, a former chief economist with the CIBC who had gone off the economics reservation to start preaching at the church of sustainability, took up the claim.

Well, if the Saudis were lying, it might not now matter so much. Their new concern seems to be their ability to sell what they do produce. According to an intriguing piece by the Post’s Yadullah Hussain on Monday, the Saudis are now concerned about the prospective boost in North American petroleum production displacing their oil, whatever the Keystone XL protesters think they might have achieved.

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The following is a lengthy essay explaining why I would approve the Keystone pipeline despite finding myself on the side of those concerned over the negative environmental impact of tar sands development. I will debunk much of the misinformation going on in the pipeline debate and ultimately lay out my conclusions. I intend for this to be an alternative to the administration’s announcement to punt the decision for a later time

I have to hand it to Bill McKibben. Whether or not you agree with his position, take a look at what he accomplished. McKibben, an environmentalist and journalist, has been described as “probably the nation’s leading environmentalist” and “the world’s best green journalist.” McKibben has written extensively about the dangers of climate change, and he acts according to his convictions.

When it looked like the Obama Administration was headed toward approving the Keystone XL Pipeline project, McKibben organized a huge protest at the White House. The protesters demanded that President Obama live up to his campaign promises, because Candidate Obama campaigned against the “tyranny of oil.”

As a result of the protests, many protesters — including McKibben — were arrested. But President Obama could not ignore those protests, and his administration announced a delay in approving the pipeline until after the 2012 presidential election.

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The National Post is Canada’s second largest national paper.

The United States’ administration treated the Keystone XL pipeline as a political inconvenience. Environmental organizations painted it as the tipping point between a future based on fossil fuels and one based on green energy. The oil industry wanted it to support its growth agenda.

Now it’s Canada’s turn to decide what Keystone XL stands for. Most likely, it will be about putting Canada first. Whether that suits any of the above is secondary.

Jim Prentice, the former senior federal Cabinet minister, said Keystone XL’s regulatory review process and its ultimate deferral by U.S. President Barack Obama were a transformational moment for the country on the necessity to open new markets for its biggest export commodity, oil.

The transformation has been so deep he contends it has pushed Canadian energy policy in a new direction.

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The National Post is Canada’s second largest national paper.

While the green movement naively harbours hopes it will be able to shut down unconventional oil and gas development, in Saudi Arabia they are already contemplating a time when North American fossil fuel will replace their oil.

Looking past the din of protesters, state-owned oil giant Saudi Aramco is resigned to the fact that its influence will wane because of the massive unconventional fossil-fuel development underway in North America. As such, Saudi Arabia has no plans to raise its production output to 15 million barrels per day from 12 million, said Khalid Al-Falih, the powerful chief executive of Aramco.

“There is a new emphasis in the industry on unconventional liquids, and shale gas technologies are also being applied to shale oil,” Al-Falih, president and CEO of Saudi Aramco, warned a domestic audience in a speech in Riyadh Monday.

“Some are even talking about an era of ‘energy independence’ for the Americas, based on the immense conventional and unconventional hydrocarbon resources located there.

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The National Post is Canada’s second largest national paper.

Two weeks ago, the United States State Department, at the behest of the White House, unexpectedly postponed until after next November’s U.S. presidential election a decision on whether to permit the Keystone XL pipeline from Alberta to the Texas Gulf Coast. Their official reason?

The proposed route threatened a vital aquifer in Nebraska. A detour might be necessary and evaluating the feasibility of a new route would take 13 to 16 months, which (entirely coincidentally, we’re sure) would bury the controversy until after the 2012 presidential vote. Moreover, the State Department explained, Nebraska was opposed to the Keystone route.

Then on Wednesday, the Nebraska state legislature voted unanimously to approve a proposed new route around the underground river and pipeline-owner TransCanada mused about building the southern portion of the line (from Texas up to Nebraska), even before the White House had signed off on the Nebraska diversion. It’s unclear whether this last-breaking moment of sanity and cooperation will be enough to salvage a worthy project.

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The National Post is Canada’s second largest national paper.

In 2008, the slogan was “Yes We Can.” For 2011-12, it’s “We Can’t Wait.” What happened in between? Candidate Barack Obama, the vessel into which myriad dreams were poured, met the reality of governance.

His near-$1-trillion stimulus begat a stagnant economy with 9% unemployment. His attempt at Wall Street reform left in place a still too-big-to-fail financial system as vulnerable today as when he came into office. His green energy fantasies yielded Solyndra cronyism and a cap-and-trade regime not even a Democratic Congress would pass.

And now his signature achievement, Obamacare, is headed to the Supreme Court, where it could very well be struck down, just a week after its central element was overwhelmingly repudiated (2-1) by the good burghers of Ohio.

So what do you do when you say you can, but, it turns out, you can’t? Blame the other guy. Charge the Republicans with making governing impossible. Never mind that you had control of the Congress for two-thirds of your current tenure. It’s all the fault of Republican rejectionism.

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The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

You might think that humans have built enough oil and gas pipelines by now to get it right. And, fact is, they have. Oil and gas provide 60 per cent of the world’s primary fuel: a million tonnes of oil every hour, a quarter of a trillion cubic metres of gas every hour.

Almost all of it moves, at one time or other, in pipelines – the safest way, by far, to move it. And this is not inherently surprising. Pipelines are usually buried a metre underground. We’re not talking deep-sea drilling here.

But Canadian-made and Canadian-managed pipelines are in a class by themselves, either the safest in the world or indistinguishable from it. Canadian pipeline companies operate 100,000 kilometres of pipeline. The Canadian Energy Pipeline Association puts the average annual loss of liquid fuels from these pipelines at two litres for every million litres moved. The safety performance of these companies, in other words, can be expressed as 99.999 per cent.

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The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

During four decades of environmental advocacy, actor and filmmaker Robert Redford has received numerous honours, including the United Nations Global 500 award.

Vancouver — Working in Vancouver for the past several months has allowed me to spend fall in one of the most spectacular cities in the world, amid the natural splendour and wilderness wonder of British Columbia.

It’s been a reminder to me of the close partnership Canadians and Americans have forged as neighbours, bound by geography, history and culture reaching back to our national beginnings. Over the generations, these bonds of common experience and identity have combined to create something even more important: the values we share around the need to stand up for the lands we treasure and love.

Today, together, we need to stand up once more, because the lands we treasure and love are imperilled by a threat we must meet as one.

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The National Post is Canada’s second largest national paper.

TORONTO — Alberta Premier Alison Redford has a plan to move us beyond all the acrimony over Alberta’s oil sands and the pipelines that transport the black, carbon-intensive gold they contain. She calls it a “national energy strategy.” That’s strategy, not program, before you crack wise — and she’s going to grab this bull by the horns, not Ottawa.

“I see this as one big country with an awful lot of Canadians who have an interest in what our economic future will be,” Ms. Redford told reporters in Toronto on Wednesday.

Her big idea, outlined at a lunchtime address at the Royal York Hotel sponsored by the Economic Club of Canada, is that in a fact-based regulatory process, oil sands skeptics in the government and NGO communities will abandon their prejudices. They will agree to measurable targets for greenhouse gas emissions and other environmental goals, with results published independently and proactively. This calmer attitude would spread to Toronto, Ottawa, Nebraska, the White House and beyond.

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The National Post is Canada’s second largest national paper.

With the proposed Keystone XL pipeline beached for 18 months thanks to environmental lobby opposition, pipeline companies are switching to a step-by-step strategy to push growing Canadian oil production down to the U.S. Gulf Coast.

It’s a tough chess game next to the door-to-door, Alberta-to-Texas Keystone XL solution, but it could mean greater success and derail the greens’ goal to shut down the oil sands.

On Wednesday, Calgary-based Enbridge Inc., rival of Keystone XL proponent TransCanada Corp., announced the purchase of ConocoPhillip’s 50% interest in the Seaway pipeline for US$1.15 billion. Enbridge and its partner, Houston-based Enterprise Products Partners LP, owner of Seaway’s remaining 50%, plan to reverse the flow of the pipeline that currently moves oil from Freeport, Tex., to the Cushing, Okla., oil storage hub, where a glut has depressed Midwest oil prices below world prices.

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The Toronto Star, has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion

Choosing an alternative route for the Keystone XL pipeline will cost TransCanada Corp. time, money, and could send it through other environmentally sensitive areas, industry analysts say.

But it’s also the best chance that the Calgary-based company has to move forward on the massive $7-billion project. With a new route, some previous critics have melted away.

Nebraska Governor Dave Heineman, who had been an opponent, said he has asked the Obama administration to move quickly to push the project forward.

“Our most important objective all along was to move the route. So if we can expedite the supplemental environmental impact assessment and get moving on the construction of the pipeline, we’re all for that,” he said in a press conference in Nebraska Tuesday.

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The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

A year ago, with an election in the offing, Stephen Harper’s government nixed BHP Billiton’s bid for Potash Corp. of Saskatchewan. Public opinion had turned against the Australian giant’s offer in the wake of Saskatchewan Premier Brad Wall’s objections. The Harperites, reading the political mood and fearful of losing seats, swallowed their free-enterprise ideology and blocked the takeover.

So it’s a bit rich to listen to certain voices in the Harper government and among the chorus of lobbyists for the $7-billion Keystone XL pipeline decrying the Obama administration’s 11th-hour decision to further study the route through Nebraska. All politics, they claim, and thus all bad.

Of course, the delay was about Barack Obama’s precarious relationship with part of his party’s base. Environmentalists are disappointed in the President’s timid policies; postponing a decision on Keystone might assuage their disappointment.

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The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

WASHINGTON, OTTAWA AND CALGARY— A compromise between top Nebraska politicians and TransCanada Corp. to reroute the Keystone XL oil pipeline around a critical state aquifer has injected new life into the Canadian-led project and upended President Barack Obama’s plan to bury a political hot potato until after the 2012 election.

TransCanada’s decision to divert the pipeline away from the Sand Hills region, which sits atop the Ogallala Aquifer, immediately won the support of Nebraska’s Governor and shattered the anti-Keystone coalition of state politicians and national environmentalists.

With leading Nebraskan legislators now calling on the U.S. State Department to “expedite” its approval of the controversial $7-billion (U.S.) project, the Obama administration faced new pressures from environmentalists to kill the pipeline altogether.

“Our most important objective all along was to move the route.

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The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

Company agrees to shift pipeline from sensitive Nebraska area

OTTAWA, WASHINGTON AND CALGARY – For the oil sands industry, Plan B for Keystone XL looks a lot like Plan A.

After being handed a major setback by the U.S. move to sideline the $7-billion project until at least 2013, TransCanada Corp. appears to have put the project back on the rails with an agreement with key Nebraskan legislators to re-route the line.

Assuming the deal is passed by the full legislature, TransCanada will work with the state’s Department of Environmental Quality to identify a new route to avoid the environmentally sensitive Sand Hills area.

“It’s our sincere hope that with this agreement, we’ve put everybody in a place where they can support the new pipeline route,” Alex Pourbaix, TransCanada’s president for energy and oil pipelines, said in an interview from Lincoln, Neb..

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