Put That in Your Pipe, OR Smoke it!... The Pipeline Debate Continues.

     Dark days may lie ahead for Canada's energy industry. Falling oil prices, slipping demand and increasing production in the U.S. are all conspiring to create a new energy crisis in this country, albeit a financial one this time around. Western Canada is going to bear the brunt of the lost revenue. Alberta has placed their economic future firmly in the hands of the oil companies. They will be the hardest hit. North East BC will be a close second with huge reserves of natural gas and great reservoirs of easy oil. Although Canada has enough oil and gas to be self sufficient, the big advantage of having all this raw energy is to generate revenue to pay for the things we want.

     Imagine sitting, alone on a desert island, with crates full of gold bars. Billions of dollars of gold surround you while you die of starvation and thirst. All the gold in the world won't save you unless you can find a buyer and get the crates to market.
This is the situation that Canada's oil and gas industry has found herself in. In the last decade, the United States has increased production to the point where they have enough to sustain themselves. U.S. reserves are nearly full, driving prices even lower. The self imposed ban on U.S. oil export is still in effect so there is no way for the demand to out pace supply in that country. How much longer can we expect the U.S. to continue purchasing Canadian oil?


Most oil/gas production in Canada is a lot cleaner than the
Hollywood tourists would have you believe. They have
obviously never been to a BC oil/gas well.

     The only way for Canada to get the bulk of her oil to the world is through the U.S. ports and refineries. Canadian access to pipelines serving the major United States ports and refineries along the Texas Gulf Coast is relatively small when compared to our production capabilities. Currently the only alternative is to ship our oil south by rail. For over a decade, pipeline expansions and proposals for new pipelines have met with tenacious opposition. In February, 2015, Canada's hopes to finally see the Keystone XL Pipeline expansion come to fruition soared as all houses of the U.S. government, except one, voted to accept the pipeline proposal. The White House was the last stop, and on February 24th, 2015, President Barack Obama decided to send a message to Canadian oil producers. "The way that you get oil out in Canada is an extraordinarily dirty way of extracting oil," Obama said. Canadian oil extraction is not environmentally responsible and produces too much greenhouse gas. VETO!

A smug looking US president "closes the book" on Keystone XL.

     Obama went on to say, "Obviously there are always risks in piping a lot of oil through Nebraska farmland and other parts of the country." His risk assessment is in line with the majority of pipeline opponents. the anti-pipeline lobbyists continually point out the dangers associated with a pipe filled with millions of litres of oil. Even with billions of dollars having been spent on safety measures and spill mitigation methods, they are right. There is an inherent danger in transporting oil through pipelines. In 2011, the small town of Little Buffalo, Alberta experienced the inevitable. The worst pipeline spill in North America since 1975. Just over 28000 barrels of oil escaped from the Plains All American Pipeline. According to reported incidents in North America, something on the order of 5000 barrels per year end up on the wrong side of the pipe.
     If we are to take President Obama's decision as that of a man with the environment and humanity in his best interests then transporting oil by pipeline is a bad idea. So what are the alternatives? There are really only three possible ways to get a large amount of oil from one place to another, if piping it is not an option.

1. Load it in tanker trucks and transport the oil to market on our nations' highways. Not a very efficient choice. The number of trucks required would be staggering, as would the amount of fuel burned and GHG released. If people think traffic is congested now, imagine the gridlock caused by adding thousands more transport trucks into the mix. Not to mention the perpetual smog that would be left behind.
2. Rail stands out as the most efficient method of moving large quantities of oil. No increase in traffic on our roads and a minimum amount of fuel burned per ton mile. Unfortunately, if we consider pipe out of the question, trucks will still be required to transport the oil from production to terminal. Still, truck transport would be relatively short haul, so the efficiency and impact on the public highway system will not be significant when compared to option 1.
3. Tankers could move large volumes of oil by sea. This method will move a lot of oil, but the potential for disaster increases with every kilometer travelled along the coastline. Safety and reliability of tanker transport is best when these super-sized oil jugs are travelling the open ocean, over great distances. Best choice for inter-continental transport, not trans-continental. The problem of getting the oil to the relatively few tanker terminals in North America brings our discussion full circle. We need trucks, trains or pipelines to get the oil to the coast in the first place.
4. I forgot about this option when I said there were only three choices. We could stop using oil. Then we wouldn't need to move it anywhere. Problem solved. Likely not a viable choice, quite yet.

     As rail seems to win the lottery here, let's examine that option in little more detail. Trains are relatively efficient at moving great quantities of goods over long distances. We have been using rail in North America for hundreds of years. As a result, you can get pretty close to the production fields without having to tear up a bunch of pristine countryside to lay new rail. The fairly short distances can be covered by truck if needed, but most major rail terminals are served by existing small volume pipelines, so the trucking is further reduced.


Approximately 810 barrels of oil ended up on the ground
when the Hiland Crude Pipeline sprung a leak on
March 21, 2014, near Alexander, North Dakota.

     In 2009 21,200 barrels of Canadian crude was shipped to market by rail each day. At the end of 2014 that number had risen to 1.04 million barrels per day. An average tanker train will run with about 100 tank cars, at an average of 800 barrels per car. That means that a least 12 miles of trains have to make the trip to U.S. refineries, every day. Having a dozen or so trains full of volatile crude oil rumbling through our villages, towns and cities every day doesn't seem like a bad idea? I haven't done the research, but I am betting there are a fair number of bridges crossing sensitive fish and waterfowl habitat. If even one of these rail cars was to spill its load, it would dispense as much oil as the Alexander, North Dakota pipeline breach in 2014. 800 barrels of oil could end up in your favorite trout stream.

     What are the chances that a single rail tanker would spill its contents? Slim, to none. Most rail incidents involve way more than just one car. A pipeline has multiple sensors and shut-off locations that allow a breach to be contained almost as quickly as it happens. The oil in that section of pipe can potentially continue to leak out but when the pressure is removed the leak becomes a drip. When a train leaves it prescribed course, all hell breaks loose. The residents of Lac-Mégantic, Quebec will attest to that. Some of you will say that an inferno is not the norm in derailments. Really? Four derailments between February 14,2015 and March 07, 2015, ALL involving fire and all involving trains transporting over 75,000 barrels of oil. The potential for a disaster, the likes of Lac-Mégantic, to occur again, and in an even more populated area is overwhelming. Maybe rail isn't our best option after all.

"Obviously there are always risks in piping a lot of oil
through Nebraska farmland...". (Obama)
The alternative, 5 dead, a town devastated.

    
In the past 20 years, oil production has outstripped our current pipeline infrastructure and numerous new proposals have been laid on the table. Some proposals are for the construction of whole new lines while others have been for expansion of existing lines to allow greater volume or to move a different product. All of these proposals have met with monumental resistance. The challenges, court proceedings and construction delays caused by over zealous protestors have stalled most major projects. Keystone XL was only the latest disappointment. Keystone was to provide an additional 850,000 barrels per day of capacity, direct from central Canada to the refineries of the Texas Gulf Coast. As this would provide the refineries with much needed heavy crude at cheaper prices than importing from Argentina or Venezuela, it has been estimated that nearly 75% of the product shipped would be converted into product for use in the United States. The U.S. refineries' appetite for Canadian crude has not waned just because Obama says the pipeline isn't happening on his shift. They will get the oil they need, somehow.




Houston, Texas fuel oil terminal.

     On March 9,2015 all three Texas railroad commissioners made a public statement supporting a move toward lifting the current ban on exporting U.S. extracted crude oil. Further proof that the Texas Sweet Crude market in the States is not sufficient and the demand offshore for that product is becoming more enticing. It also provides more evidence that the oil produced in the U.S. does not satisfy the business economics. Canadian oil will continue to be a big part of the United States' oil economy. It is very unlikely that demand for that crude will decrease and we will continue to ship oil at an increasing rate by whatever means is available to us. Also, as demand for Canadian crude  increases world wide, producers will find a way to get that crude to Canadian ports for shipping. If the pipeline opponents think that they will bring the oil industry to its knees by preventing the development of new lines or even improving old ones, they may find the industry doing the same end-run, to our own coastlines. We have plenty of rail available to get to the Canadian ports.


Tankers already frequent the port in Vancouver, BC.
Is this going to become more common?

     Make no mistake, Canada will not roll over and go back to farming and logging. As long as she sits on world class deposits of energy resources, those products will find a way to buyers. The United States has traditionally been our greatest trade partner, but as she becomes more self sufficient and politicians come under greater pressure to "protect our own", Canada will have no choice but to step out from under the eagle's shadow and present our wares to the rest of the world. Canada's 202,080 KMs of coastline gives us access to the entire world and yet we continue to ship the vast majority of our products and resources across a mere 6400 km border. We are more than capable of selling our resources to the highest bidder. We can and we will. Just as soon as we find a way to get the stuff delivered.
     There can be no argument that our world is wanting for a day when we only use clean, renewable energy. I am also confident that the technologies we are developing today will continue to make fossil fuels less desirable. We are already seeing a shift from coal to natural gas. Although a small victory for those believing we should not be using fossil fuel at all, but a victory none the less. GHG emissions are continually being improved and have become the focus of many industries. What those same 'green' proponents need to recognize is that all these changes need time to happen. In the interim, even the greenest wants hot water, heat and power. Yes, you can do that with solar technology, but the products used to harness that solar power are made from the crude oil that is burning in a creek in Illinois because someone said it was a bad idea to put it in a pipe.


Trans Alaskan scenery

     There are no safer, greener alternatives to moving oil than pipelines. Until the day comes that we can fall to option 4, it would be wise to get as much oil as possible into pipes and off our roads and rails. Nearly everything you use in the course of your day is, in some way, a product of the oil we pull from the ground. Even the guy with the electric car is supporting the oil industry. He is saving his gas money, but the green house gas footprint of his electric car is as significant as everyone else's. Stop putting so much energy into trying to stop the oil business. Put your energy toward supporting the alternatives. Do something positive with your time. Give us a 5th choice. The world will not turn it's back on fossil fuel until there is a viable alternative, something that, most assuredly, does NOT currently exist. If you take nothing else from reading this, please remember.. it is infinitely easier to replace a bad habit with a good habit, than it is to simply quit a bad habit.