Quote:
Originally Posted by GGG
The pipeline is worth about $3-$5 per barrel in reduced cost.
So the oil price required for economic production is $3-$5 higher if you have pipelines. So if there is available pipeline capacity no one will ship by rail. You would still have some rail shipping local to Alberta for small plants not currently on the pipeline network.
Even from a GHG perspective if you read the US EPA? I think report it talks about the pipeline impact on Oilsands production having 0 effect at an Oil Price above $70 per barrel. This report also didn't really consider that alternative oil would have to replace the oilsands at the Marginal barrel not the average barrel.
So the net affect of a pipeline on green house gases is that the economic viability of oilsands is about $3 per barrel less. In otherwords any negative GHG effects could be handled with country and world wide Carbon reduction schemes that target all industries and not just the oilsands.
Every barrel not produced by Canada is produced by the US, Saudi, Russia, Iran, Syria, etc. All countries with far less stringent environmental restrictions. The oilsands have a minimal effect on GHG as marginal barrels are close in impact.
Kuwait right now is building a heavy oil field that desalinates sea water, turns it into steam and injects in into the ground. Really no different than what we do.
If you want to stop GHG attack demand. Even if you want to stop making oil $3-$5 cheaper you would be better off building the pipelines and taxing oil more. That's what is so ridiculous about the Anti pipeline stance. Regardless of where you stand on the industry doing things a safer, more efficient way is better.
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Not just that but when prices support expansion, the projects need to have someone willing to buy their oil which means moving it out of the province. A lack of pipeline capacity ensures there are no customers for a new project's volume even if prices support their economics.
What is that Kuwaiti project that is desalinating seawater for steam injection? That is interesting. Is that wafra?