Actually the alternative is mostly to not ship it at all.
To replace Keystone you'd need 300,000 rail cars. In other words, never going to happen. Sure there will be some added rail shipments but the real outcome will be less oil sands production.
Actually the alternative is mostly to not ship it at all.
To replace Keystone you'd need 300,000 rail cars. In other words, never going to happen. Sure there will be some added rail shipments but the real outcome will be less oil sands production.
It will be shipped by rail if there is money to be made.
Actually the alternative is mostly to not ship it at all.
To replace Keystone you'd need 300,000 rail cars. In other words, never going to happen. Sure there will be some added rail shipments but the real outcome will be less oil sands production.
Lots of producers are now buying their own rail cars. Rail shipments are carrying a significant volume of crude.
Create an arbitrage big enough and there will be solutions. If the oil sands are going to be 'stopped' it's going to have to be a demand destruction scenario that effectively makes it uneconomic without transportation contraints. As hard as it is to imagine right now after the last election, there won't be a Democrat President of the US forever.
Create an arbitrage big enough and there will be solutions. If the oil sands are going to be 'stopped' it's going to have to be a demand destruction scenario that effectively makes it uneconomic without transportation contraints. As hard as it is to imagine right now after the last election, there won't be a Democrat President of the US forever.
What that article is stating is the real arbitrage opportunity. Per BTU natural gas is trading a 1/8 of the price of oil. We're going to see a massive movement toward gas away from oil in the next 10 years.
You should also look at the data. Vehicle use is plummeting in the US and it has nothing to do with a Democratic President.
I think the medium term outlook for the oilsands is very murky and it has little to do with market access. The world may be moving on from oil.
Couple that with the fact that climate change policy is a certainty in the next 10 years. The impacts of climate change are irrefutable at this point. It is happening. As this soberring reality sets in we will see aggressive prices on carbon. How will Alberta's oil sands fare under that new regulatory environment? Well the guys at MIT modelled it and:
with CO2 emissions caps implemented worldwide, the Canadian bitumen production becomes essentially non-viable even with CCS technology, at least through our 2050 horizon. The main reason for the demise of the oil sands industry with global CO2 policy is that the demand for oil worldwide drops substantially. CCS takes care of emissions from the oil sands production, upgrading, and refining processes, at a cost, but there is so little demand for petroleum products which still emit CO2 when used that it can be met with conventional oil resources that entail less CO2 emissions in the production process.
What that article is stating is the real arbitrage opportunity. Per BTU natural gas is trading a 1/8 of the price of oil. We're going to see a massive movement toward gas away from oil in the next 10 years.
You should also look at the data. Vehicle use is plummeting in the US and it has nothing to do with a Democratic President.
I think the medium term outlook for the oilsands is very murky and it has little to do with market access. The world may be moving on from oil.
Couple that with the fact that climate change policy is a certainty in the next 10 years. The impacts of climate change are irrefutable at this point. It is happening. As this soberring reality sets in we will see aggressive prices on carbon. How will Alberta's oil sands fare under that new regulatory environment? Well the guys at MIT modelled it and:
with CO2 emissions caps implemented worldwide, the Canadian bitumen production becomes essentially non-viable even with CCS technology, at least through our 2050 horizon. The main reason for the demise of the oil sands industry with global CO2 policy is that the demand for oil worldwide drops substantially. CCS takes care of emissions from the oil sands production, upgrading, and refining processes, at a cost, but there is so little demand for petroleum products which still emit CO2 when used that it can be met with conventional oil resources that entail less CO2 emissions in the production process.
I'm no expert but China is currently adding 30+ million conventional new cars every year. Maybe we can hope for emerging and new markets to sustain the global demand for oil if the mature ones are moving onto other forms of energy.
I'm no expert but China is currently adding 30+ million conventional new cars every year. Maybe we can hope for emerging and new markets to sustain the global demand for oil if the mature ones are moving onto other forms of energy.
There's alot of uncertainty in the air. First the best hope is not to hope for expanded oil consumption and production. That's basically robbing your grandchildren of a habitable world we've enjoyed, or a world with significantly less resources and more hardship.
More specifically on China: Chinese demand for personal transportation is indeed interesting, most analysts lazily predict that Chinese preferences for personal transport will simply mirror the trajectory in North America over the past 70 years. But, what seems to be unfolding is a much different personal transport driver for Chinese people. They drive way less and their urban areas are being built now meaning that the infrastructure that enables various modes of transport can have a huge impact over the next 20 years. Instead of building say car dependent suburbs, Chinese officials have been prioritizing smart growth communities with transit nodes. So a) they are trying to dampen the demand for personal vehicle transport. The other thing that they're doign is emphasizing natural gas vehicles, there are 1.6 million NG vehicles in China today, there were 6000 ten years ago.
Anyway, all this is to say that China is not a black hole of oil demand as some make it out to be.
So what kind of maintenance occurs on pipelines, especially like this one, older ones which one can only assume, wear out like anything over time?
Do we expect problems with older pipelines as a given? Or are cases like this rare considering the amount and age of pipelines?
They should be pigging pipelines like this on a regular basis.
The pig will be able to determine wall thickness and identify any weak spots in the pipe. From there they expose the pipe and replace the weakened section and restart the pipeline.
A lot of the spills though are from someone digging without locating the pipe first and striking it. I think that may be more common on old pipelines because people forget they are there and can no longer see the evidence of construction.
They should be pigging pipelines like this on a regular basis.
The pig will be able to determine wall thickness and identify any weak spots in the pipe. From there they expose the pipe and replace the weakened section and restart the pipeline.
A lot of the spills though are from someone digging without locating the pipe first and striking it. I think that may be more common on old pipelines because people forget they are there and can no longer see the evidence of construction.
Ok, but that's kind of my question. Do they?
And I'm assuming that since we haven't heard anything about it yet, this wasn't caused by an oops in some construction digging?
I would think (hope) for these pipelines they would know where they are and there would be no strikes. I was annoyed with the "pipe flowed for 4 hours" before detection. Not sure if that is true or not though. I hope it is not.
The thing with pigging and maintenance is that it costs money, and the bigger the line the more it will cost in lost production, and the cost of the maintenance itself. Mind you it is a drop in the bucket compared to what it will cost now. The Vertilog business can be a bit of voodoo especially on massive lines like this. I am sure they do pig, it is in their own best interest to do so, its the frequency and type that may be debateable. Also pigs can get stuck and cause more problems.
I don't think you can ever stop leaks but you can reduce the impact greatly, to block pipe in imediately, containment, etc. Its like thinking that zero car accidents is an achievable or reasonable goal.
It just seems so wildly inefficient to drive oil to the refinery to become gasoline, when pipelines are a much more clean way to go.
Weird all this kerfuffle over a new line that will likely have awesome materials, state of the art containment and monitoring where these old corroded lines in use are already in the ground. Thats what needs the attention.
Well that's the point. Even though I have my problems with the oilsands and a lot of the oil companies practices in general, pipelines seems like a no-brainer. I'm not sure how anyone could protest one. Seems like the cleanest and most efficient way to go.
Maybe there needs to be more regulations on scheduled maintenance etc.?
You need to look at the lifecycle emissions from electricity production to power the pipelines. Rail produces about half as much GHGs as pipelines when you take that into consideration.
And I'm assuming that since we haven't heard anything about it yet, this wasn't caused by an oops in some construction digging?
Pipeline operators like Enbridge and Transcanada do it for sure. Their pipelines are their sole income generators, and as such, if any of them go down, they are in deep trouble.
An upstream production company like Imperial/Exxon? Probably not, or with as minimal attention as possible. Their pipelines are not what generates income for them. What I've seen is that Exxon will sometimes just build a new pipeline for a specific purpose, run it to the ground, then sell it off before it reaches EOL so that some other company has to deal with the integrity/maintenance of it (and generate the profits of transmission).
This line was apparently extremely old (like 1940's) but I am still somewhat doubtful of maintenance that Exxon does on it.
@ Tinordi - You're going to have to provide SERIOUS proof of that. Considering most journals show that pipelines are on the order of 100x more efficient than rail, and they clearly take into account the electricity required to pump the product through the line.
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