Sunday, January 22, 2012

Can Someone Explain This to Me?

At the heart of much of the opposition to the Athabasca Tar Sands is that it exports dangerous contaminants that put entire ecosystems at risk.  We export a semi-refined product bearing significant quantities of abrasives, corrosives, heavy metals and other toxins.   We export this product to places where it is refined into synthetic crude.  In other words, we export dangerous contaminants to distant places where they are removed.

Obama tossed out the Keystone XL pipeline proposal because of serious environmental risks it posed to Nebraska.   If the stuff is too dangerous for wide open Nebraska how could it possibly be safe to pump it across BC's mountainous and seismically active north?

What I don't understand and what nobody seems willing to discuss is why doesn't Harper want that product refined on site in Alberta?  Why don't we remove the contaminants right there and simply export a clean synthetic crude product?

I suppose one reason this doesn't fly is because of the surplus refining capacity these days in Texas.   The same outfits that are extracting the bitumen are the outfits that own this refining capacity.  They want to keep the whole thing "in house" and building new refineries in Alberta while their Texas operations sit idle isn't in their interest.   But what about China?

If we must export oil to China, why should that not be refined in Alberta before it's exported?   Why should coastal BC be exposed to a toxic, carcinogenic and virtually irreparable bitumen spill?   Isn't an ordinary, refined oil spill risk bad enough?

There's an answer to this somewhere.  My guess is that the profit margins for the Tar Sands are already so minimal that incorporating the cost of complete refining into the price would sheer Alberta's and Ottawa's royalty revenues to the bone.  Imagine the state of affairs that would result if Athabasca carbon emissions were properly priced, if Tar Sand operators were required to pay world price for the vast quantities of water they consume for nothing, if their operations weren't bolstered by tax write offs and subsidies, if they had to fund up front a programme for contamination clean up and site remediation.   All you would hear is a whooshing sound of Big Oil beating a quick retreat from Athabasca.  And that's just sad.


Anonymous said...

It's hard to get sensible and logical answers from the ethical oil people. People were pointing out their hypocrisy about telling foreign interests to butt out, and demonizing oil from "conflict" countries which are said to be unethical, and yet they want to ship the unrefined product to China as fast as they can, even though the ethics of the Chinese governments could be questioned, as well as the fact eastern Canada still imports a large amount of "conflict oil"... The members of their facebook page typically have been responding along the lines of stating only oil workers in Alberta work and everyone else in Canada is lazy, that if you don't want to send the oil to China you are a racist and want the Chinese to die, and so on and so forth. There really is no talking to people like that.

Anonymous said...

Not only that, but why are western countries getting a pass on ethics? Why is the US? How many dead civilians in Iraq? What about gitmo? Or Canada handing over detainees for torture. Or our fight against asbestos being labelled hazardous so we can send it to third world countries without safety information. Those ethical oil propaganda artists are so full of it.

Sam Gunsch said...

Bitumen is being shipped to the US for upgrading mostly because it's more cost effective to retrofit existing US refineries for upgrading bitumen than building new upgraders here in AB. That's the largest factor.

And I've lost track of the details, but since 5-6 years ago I believe prices for bitumen upgraded here have declined. But you'd have to check old industry reports to get the details on that aspect.

At one point when prices were higher, there were 8 or 9 upgraders planned for the Industrial Heartland near Edmonton. Only one going ahead now. Shell built a couple expansions to its existing upgrader/refinery, but I think they've dropped plans for another.

Sam Gunsch

The Mound of Sound said...

Hi Sam. Thanks very much for the helpful information. What do you think about upgrading/refining in Alberta as at least a partial answer to some of the anti-pipeline groups' complaints? Sure it's more cost effective to just ship it more or less as is but with the enormity of the resource and planned expansion of production, how can it be justified not to refine this stuff in Alberta?