Saturday, January 23, 2016

A Quick End to the Pipeline Debate

I got a chilling reminder yesterday that the federal Liberals are probably still Conservative-Lite when the Liberal Loudmouth came out in support of the Alberta Wildrose Party's Brian Jean's attack on Quebec politicians' opposition to the Energy East pipeline passing through la Belle Province.

Liberal/Wildrose - sure, what's the difference? Maybe not all that much anymore.

LL, as usual light on facts and oh so long on opinion, endorsed Wildrose Jean's tweet in which he wrote “You can’t dump raw sewage, accept foreign tankers, benefit from equalization and then reject our pipelines.”

It was a caustic, abrasive, even toxic remark which, by sheer coincidence, also describes what that Energy East pipeline is intended to convey across Eastern Canada, diluted bitumen, i.e. "dilbit."

Dilbit is all levels of nastiness. It's chock full of abrasive particles, corrosive acids, heavy metals and carcinogens. It's not oil. There's synthetic oil in there but it's travelling with some very bad company and a lot of it.

Did I mention "petcoke"? This is another bit of nastiness and one that the traffickers of this crap don't want anybody to mention. It's sold under the table a lot like the dealer who hangs around the schoolyard.  Petcoke is granular coal but it's super high in carbon and most places won't let it be used for energy generation because it gives off so much greenhouse gas.

There's only one outfit I know that openly sells petcoke. Ready? Brace yourselves. It's Koch Carbon. Yeah - that Koch, as in The Brothers. Eventually the stuff finds its way onto a barge to Asia where, out of sight/out of mind, it's sold and burned.

So, with all this stuff making dilbit so dangerous. Did I mention Kalamazoo?  So, with all this stuff making dilbit so dangerous, isn't there a safer, cleaner even better way to achieve the same objective of getting this stuff to market?

Sure there is.

The better way is simple. Refine the bitumen in Alberta. No, not upgrading, refining. It's going to be refined at its destination anyway so let's turn that sludge into real, synthetic crude right on site, in Alberta. Let's strip away all the sludge - the abrasive sands. Let's get out the acids, heavy metals and carcinogens. And, for sure, let's get that petroleum coke out and return it safely to the deep underground where it too can do no harm.

Then when Big Oil and Alberta have done the responsible thing, when they've eliminated the most dangerous, environmentally catastrophic aspects of what they're so eager to ship, then there should be more room to talk.

A couple of years ago I discussed this at length with my veteran Tory friend. I inventoried all the problems associated with bitumen and shipping it as dilbit and, the minute I finished, he chimed in with "Why don't they just refine it right there? That's a new industry, jobs, revenue."

Yes, indeedy. Processing bitumen into synthetic, relatively safe, crude oil would be a new industry for Alberta, more jobs, more revenue (word I'm getting is that they're running below capacity in these things at the moment). It would also make transporting the synthetic crude far less costly and dangerous than moving dilbit and, refined, it would fetch a much better price.

So, how do you explain the inexplicable? That's a sad story that can only be told by admitting a few awkward facts that really shift the narrative.

One is that margins are so meagre on bitumen that extreme measures such as transporting it in its most dangerous form are necessary to protect the bottom line. Yes that subjects every jurisdiction it crosses to significant environmental risks and costs but, in the lingua franca of conventional economics, those are "off the books", externalities. That's something you've offloaded on someone else. Suckahs!!!

The second reason is that somebody would have to build the refineries capable of processing several hundreds of thousands of barrels of bitumen per day that the industry wants to get to market. Right now Big Oil is becoming gun shy of the Tar Sands. They know the very real prospect that Athabasca bitumen could become a 'stranded asset.' Running this lethal crap through a pipeline is one thing. Cleaning it up first - that's too much of a gamble.

A third reason, and I'm speculating here, is that selling the petcoke to Asia is an essential part of their bottom line.  The mere mention of petcoke to these Fossil Fuelers is like tossing a vampire out into the noonday sun. Three or four seconds and you can see the smoke coming off them.

The fourth reason is carbon emissions. Yes, Alberta has announced a genuinely ambitious carbon pricing initiative. It should. It is, hands down, the province with the biggest carbon emissions and that's poised to go nowhere but up, up, up. The added energy used in refining means even more greenhouse gas emissions leaving Alberta looking worse, worse, worse. Best to outsource those inevitable emissions overseas.

The saddest thing is that these issues never surface in the pipeline debates. You won't hear them from Trudeau or Mulcair. You won't hear them from Notley. You sure as hell won't hear them from Mona. Why won't we have this "refine in Alberta" option discussed? Because it ends the debate and everyone knows it.

The decent, responsible option is off the table. It will not be opened for discussion. What else can be expected when the Tar Sanders have them all - Liberal, New Democrat, Conservative - all lined up like so many trained seals slapping their flippers on command.


Robert said...

Absolutely. This Wild Rose dude has no concern at all to make Canada oil independent, no concern that we get crude from the USA or other oil regions. His only concern is to get three pipelines to seaside for export, maximize profit and minimize jobs and taxes. What are the "ethical" nations wanting the dilbit....exactly!

Toby said...

The news media, including CBC, never calls it dilbit or diluted bitumen. Instead, I keep hearing that the pipelines need to be built to carry oil to one or another destination. This is dishonest. It sounds so harmless; we have been transporting oil by pipe for a long time. Watching The National it is very easy to think that pipelines make sense. We are being conned.

Ben Burd said...

The sooner LiberalLoudmouth is exposed as a crass loud and nasty partisan the better. Just because he has a website wherein he postulates Liberal arrogance and the supremacy of the Natural Ruling Party and has a propensity to sue people rather than dismiss them as idiots means that he can easily be classified as a cyberbully.

And here I thought that I was the only one who didn't think the sun shines out of his arse - thanks Mound.

The Mound of Sound said...

@ Ben. Never think you walk alone on this one, Ben. There are plenty of genuinely progressive Liberal supporters, not to mention just about every New Dem I've had the pleasure to know, who recognize the obvious. It makes me laugh that he routinely drapes himself with the mantle of "progressive." Perhaps he even believes it although I can't imagine the basis for that extreme a delusion.

I knew nothing of him until, during the Mulroney-Chretien years, he was parachuted in to run for the Liberals in my riding in North Vancouver. He was up against a Reformer, a little garden gnome of a fellow originally from New Zealand if I recall correctly. My party's candidate conducted himself so foolishly, aggressively so, that he made a lot of committed Liberals feel sorry for the Reformer, almost wishing Manning's guy to win - which he did, handily. To my undying shame I voted for the Liberal Loudmouth although I was relieved that the other guy won.

Anonymous said...

My take is that "The added energy used in refining means even more greenhouse gas emissions..." would be actually less energy than pumping the crude for 4000 km.

Also, I heard that new upgrader worth ~ 8bn would be operational soon in Alberta an process 50,000 barrels a day into diesel but not gasoline.
As for lack of full size refineries in Alberta... One of the factors could be desire of our southern neighbour to keep Canada off (energy) balance...

the salamander said...

.. I'm fed up with hearing and reading the term 'tidewater' a marine or naval term.. used to avoid saying 'the British Columbia coast' .. its a creepy political end around euphamism. They don't mention Communist China in the same sentence, or dilbit or diluted bitumen either. Its just mutated into 'bringing our resources to tidewater' ... If you think I'm angry about the phony convoluted way they talk.. you may wonder how angry I am at what they get away with doing.

If the damn bitumen is so valuable, why do we essentially give it away to China. to fuel their economy? Alberta gets minimal royalties, Big Energy gets the profit.. and Canada imports our neccessary petroleum.. Its bizzaro. Of course Alberta should be refining on site.. its an f'n wasteland that will never be remediated properly or completely... who do they think they're kidding. So refine up there and use existing pipeline to transport far far lighter component petroleum products to eager Canadian markets. Do not expand beyond the needs of Canadians.. unless its obvious border states that are not too ravenous.

Cease and desist re the fallacy of Energy Superpower.. even if there were staggering $$ to be made, you can't eat money. And you can't make enough money to detoxify our water, air, lands and peoples... our living environment. Live within our mesns and look after our country. Mind our own business as much as is reasonably possible.

While Alberta is doing that.. with the support of the other provinces. lets see British Columbia stop stripping out their forests for China and start rebuilding a real lumber industry to supply Canada with raw logs and lumber.. and viable border states etc. Fishing? Same deal.. start enhancing and supporting our natural fisheries.. both coastal and inland freshwater. We know where wheat grows too, just like we know where corn and dsiry go together. In so many sectors, we know we can export.. of course there are markets.. but Canada and Canadians need to be as self sufficient as possible.. airtight in fact.. and screwing with our freshwater resources and our living environment is reckless, dangerous.. and the road to disaster.

I'll choose common sense over economics every time. Would I want to live beside a farmer or an economist during hard times? Hell, during good times I'd choose the farmer, or a teacher, or a mechanic, a nurse, a baker, a biologist ..

The Mound of Sound said...

I don't know about your refining versus transportation emissions analysis A..non. Have you got anything on that?

Refining bitumen to diesel is a good start, albeit pretty small.

The Mound of Sound said...

@ Sal - I agree that we need to focus on self-sufficiency in priority to export markets.

As for bitumen royalties, Alberta complains they're so low because they don't have sufficient pipeline access to make Tar Sands bitumen available to competitive bidders. The Americans, we're told, are screwing us.

Scotian said...

Calling Kinsella Liberal Loudmouth these days is not fair nor accurate anymore I would argue. Kinsella is neither involved nor particularly welcome within the Trudeau Liberal leadership circles, or in fact the bulk of the party as it currently exists. He is these days more of an outsider looking in with his connections from the Chretien years, and these days you don't see a lot of Chretienites at the party anymore. I also suspect there is a lot of less than warm fuzzies for the Chretienites given how Chretien who allowed Adscam to happen under his watch made sure to stick Martin with it guaranteeing his short term government and the following decade of darkness. I'm also not sure his politics really are in line with the Trudeau Liberals, he repeatedly either misread or underestimated choices made by Trudeau prior and during the last election and how they would work with the electorate, I recall in particular his disbelief in the deficit spending policy choice in the election being a good one, he called it rolling snake eyes and didn't believe it was something that would work. He did throw out a sheet anchor, but clearly as a pro forma cover one's bets move, not one he actually believed in.

Throughout the election Kinsella repeatedly misread the Liberal approach, strategy, and chances for success. He repeatedly made clear his issues with Trudeau's choices and directions. Kinsella has shown he is clearly not a member of the current Liberal inner circles, and has limited access if any at all, and therefore holding him up as any indicator of the thinking of this Trudeau government is, in my view, not only wrongheaded but disconnected from reality based on these reasons.

Kinsella has in the past had some good political analysis skills, especially for tactical thinking, but as of late especially with federal politics he has to my eyes become far less so. I still read him and occasionally comment there because I find some value from it, but I would never call Kinsella representative of the Trudeau Libs nor even overly friendly to them. He may well be a member of the party in good standing membershipwise, but in terms of actual influence and connections, I'm just not seeing it anymore. I think that in that respect his day has passed, and the choices he made over the last couple of years may well have made that a permanent reality, time will tell on that point.

I do think Kinsella has his uses even now, and his POV can have some value, I'm just not comfortable with the idea that it has much if any value being cast as representative of the current Liberal party, leadership, and government. As I said, in that I think he is very much an outsider looking in and not one to be soon welcomed back into the fold given his record on Trudeau and his judgment and decisions over the past couple of years. Basically I don't think you can use him as representing what the Trudeau Libs are, I think there is simply too much disconnect and distance there for that to be reasonable. My only real question is were the bridges burned down entirely or only badly burned yet still have some means for crossing, metaphorically speaking of course.

Anonymous said...

Mound, this was a gestimation based on my chemistry background.
In any case, if there is no in-situ refining, bitumen must be pumped and then refined. Carbon cost of building refinery (good for 30+ years) is a one time deal. An those construction and refinery operation are good jobs. This assumes that we are going to process Alberta's muck, which is more carbon intensive than nearly any crude on the planet...

Ben Burd said...

"Calling Kinsella Liberal Loudmouth these days is not fair nor accurate anymore I would argue."

I would agree let's just call him Liberal and Obnoxious.