Thursday, June 20, 2013
Why Won't Alberta Do the Right Thing, Refine Their Bitumen There?
Why build two pipelines instead of just one? Why transport dangerous dilutent from the Pacific coast all the way to Athabasca just so it can be transported right back again? Why import dilutent only to then export it? Why run an oversize diluted bitumen pipeline from Athabasca to the Pacific coast when a much smaller pipeline transporting fully refined synthetic crude is all that's really necessary? Why not use just a fraction of supertankers to export fully refined synthetic crude instead of far more tankers making far more trips to bring in dilutent and carry out hazardous dilbit? Why all the extra, unnecessary supertanker traffic that can only increase the likelihood and frequency of tanker accidents? Why export all those processing jobs when they could be kept right on site in Alberta?
When you look at it, no matter the angle, the whole dilbit trafficking business is counter intuitive. It makes no sense. It multiplies the tanker traffic. It multiplies the pipelines needed to move the product for export. It multiplies the pipeline costs. It multiplies the shipping costs. It increases energy costs and resulting emissions. And for what? So that somebody can do the refining in Asia? The stuff is still going to have to be refined into a useable product. They're going to have to refine out the dilutents. They'll have to refine out the particulates and other contaminants in the bitumen.
Often when things like this seem to make no sense at all, it's because something is being overlooked, perhaps even concealed. So what is all this energy-wasting, hazardous, convoluted dilbit business really about?
I'm going to guess there are two things not being addressed - carbon emissions and petcoke. This is all about exporting both of those problems.
Alberta is already leading all Canadian provinces and territories in greenhouse gas emissions. And, unlike most other provinces, Alberta's emissions are set to increase rapidly as Tar Sands production is ramped up.
In other words, Alberta stands out like a sore thumb when it comes to greenhouse gas emissions and even exporting dilbit it's going to get much worse in the years ahead.
Refining that dilbit into fully processed synthetic crude would consume a lot of energy and other resources, upping Alberta's greenhouse gas emissions even further.
And then there's the petcoke problem. This issue came to the fore in, of all places, Detroit where a small quantity of Tar Sands dilbit was sent for refining. Once you refine the crude oil out, you're left with a form of really filthy carbon called petroleum coke or petcoke. With the Ambassador Bridge in the background here is a pile of petcoke belonging to Koch Carbon which, as you might have guessed, is owned by the Koch brothers, Charlie and Manfred.
The Guardian calls petcoke the "dirty secret of Alberta's tar sands."
Every barrel of crude that comes out of the Alberta tar sands throws off between 60-130lbs of pet-coke. By May 2012, Alberta had stockpiled 70m metric tons of the stuff, driving down prices.
"They are drowning in it. It just can't be absorbed any more in the refining process," Gordon said.
Until now, the industry had shipped pet-coke off to Asia or southern Europe as a cheaper alternative to coal.
Most power plants in the US or Canada will not burn pet-coke for fuel because it is so polluting. Burning pet-coke for electricity require expensive equipment to clean up the sulphur – although a plant in Nova Scotia announced this week it would begin chipping away at the mound in Detroit.
And suddenly it all makes sense why Ottawa and Alberta are so insistent on exporting dilbit, regardless of the hazard to British Columbia's pristine coast and the interior pipeline route. This isn't about selling oil, it's about exporting their environmental nightmare to places where it can be handled out of sight/out of mind. They can sell their refined crude oil anywhere. It's their petcoke problem they need solved and the Northern Gateway is their solution.