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.