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Keystone “too important not to proceed” TransCanada CEO says

Energy Environment Politics

The CEO of TransCanada, Russ Girling, reacting to news that the US State Dept. has delayed approval of the Keystone XL pipeline said Thursday, Nov. 10, 2011, “This project is too important to the U.S. economy, the Canadian economy and the national interest of the United States for it not to proceed.”

While Girling also said, “”We remain confident Keystone XL will ultimately be approved,” but the news release from TransCanada also acknowledged:

… while Keystone XL remains the best option for American and Canadian producers to get their oil to the U.S. Gulf Coast, today’s announcement by the DOS could have potential negative ramifications, especially where shippers and U.S. refiners are concerned.

“Supplies of heavy crude from Venezuela and Mexico to U.S. refineries will soon end,” said Girling. “If Keystone XL is continually delayed, these refiners may have to look for other ways of getting the oil they need. Oil sands producers face the same dilemma – how to get their crude oil to the Gulf Coast.”

In the release, TransCanada says the company will be discussing its next steps with the U.S. Department of State after it said further analysis of route options for the Keystone XL pipeline need to be investigated, with a specific focus on the Sandhills in Nebraska.

TransCanada said the company has already studied 14 different routes for Keystone XL, eight in Nebraska. The earlier studies included one potential alternative route in Nebraska that would have avoided the entire Sandhills region and Ogallala aquifer and six alternatives that would have reduced pipeline mileage crossing the Sandhills or the aquifer. TransCanada said the company hopes this work will serve as a starting point for the additional review and help expedite the review process.

“If Keystone XL dies, Americans will still wake up the next morning and continue to import 10 million barrels of oil from repressive nations, without the benefit of thousands of jobs and long term energy security,” concluded Girling. “That would be a tragedy.”

TransCanada said it has held more than 100 open houses and public meetings in six states since 2008, The company said thousands of pages of supplemental information and responses to questions were submitted to state and federal agencies. The State Department received over 300,000 comments on the project.

Pembina urges Harper to follow US “objective perspective” of Keystone in looking at Northern Gateway

Energy Environment

The Pembina Institute, the Alberta based environmental and energy think tank has reacted to the decision by the United States Department of State to delay approval of the Keystone XL bitumen pipeline by urging Prime Minister Stephen Harper to under take a similar “objective perspective” on the proposed Enbridge Northern Gateway pipeline from the Alberta bitumen sands to Kitimat.

In a news release, Pembina spokesman Dan Woynillowicz said that US President Barack Obama “has made it clear that he has heard the concerns of Americans about environmental protection, climate change, and the need for the United States to create a clean energy future.”

The State Department release on the decision did include “climate change,” which Pembina interprets as, “The fact that climate change will be explicitly considered in the final decision is notable given the higher greenhouse gas pollution associated with oilsands compared to other sources of oil.”

Woynillowicz said the US decision shows that the regulatory process should be ” based on the best available information and analysis, and will take into account the views and concerns of American citizens.”

He then goes on to say:

“This decision stands in stark contrast with the Canadian government’s approach to the proposed Enbridge Gateway pipeline that would transport oil sands product to the West Coast. Rather than maintaining an objective perspective on this pipeline, Prime Minister Harper and his cabinet have been actively promoting its approval before public hearings on the environmental impacts of the project have even begun.

“The Canadian government should take a lesson from the U.S. and ensure a broader and more rigorous review of Gateway is completed, including the upstream environmental and greenhouse gas impacts of expanding oilsands development to fill the pipeline.”

US State Department delays Keystone approval until 2013, new route likely if approved

Energy Environment Politics

Updated 1915 Nov. 10, with link to TransCanada statement, 1940 with more reaction.

The United States Department of State has delayed approval of the controversial Keystone XL pipeline until 2013.

A news release posted on the State Department’s website confirmed earlier media speculation about a delay in the pipeline project approval until after the current US presidential election cycle.

Based on the Department’s experience with pipeline project reviews and the time typically required for environmental reviews of similar scope by other agencies, it is reasonable to expect that this process including a public comment period on a supplement to the final EIS [Environmental Impact Statement]… could be completed as early as the first quarter of 2013. After obtaining the additional information, the Department would determine, in consultation with the eight other agencies… whether the proposed pipeline was in the national interest, considering all of the relevant issues together. Among the relevant issues that would be considered are environmental concerns (including climate change), energy security, economic impacts, and foreign policy.

The State Department release also indicates that,if the Keystone XL pipeline is approved, it will likely be rerouted around environmentally sensitive areas, further delaying construction and likely raising costs for TransCanada, the company that wants to build the pipeline. The release says that the State Department has been “conducting a transparent, thorough and rigorous review of TransCanada’s application.”

As a result of this process, particularly given the concentration of concerns regarding the environmental sensitivities of the current proposed route through the Sand Hills area of Nebraska, the Department has determined it needs to undertake an in-depth assessment of potential alternative routes in Nebraska…

During this time, the Department also received input from state, local, and tribal officials. We received comments on a wide range of issues including the proposed project’s impact on jobs, pipeline safety, health concerns, the societal impact of the project, the oil extraction in Canada, and the proposed route through the Sand Hills area of Nebraska, which was one of the most common issues raised….

The concern about the proposed route’s impact on the Sand Hills of Nebraska has increased significantly over time, and has resulted in the Nebraska legislature convening a special session to consider the issue.

The premier of Alberta, Alison Redford called the decision “disappointing,” saying in a news release:

“It is disappointing that after more than three years of exhaustive
analysis and consultation on this critical project, we find out that a
decision will be delayed until early 2013. Our position has always been
clear that we respect and understand that approval of the pipeline is a
U.S. domestic matter, but the fact remains that Keystone XL is a key
piece of infrastructure for our province. I sincerely hope that the
State Department made this decision based on science and evidence and
not rhetoric and hyperbole from very well-organized interest groups.

Alberta is steadfastly committed to this project and my government will
continue to advocate that we are the safest, most secure and responsible
source of oil for the United States. I will seek immediate answers
from U.S. officials to determine why this decision was made and how the
process will unfold going forward.

The industry group the American Petroleum Institute was less diplomatic than Redford, in its own words, the API “blasted” the decision and directly blaming what it called “radicals.”

This decision is deeply disappointing and troubling.
Whether it will help the president retain his job is unclear, but it
will cost thousands of shovel-ready opportunities for American workers,”
said API President and CEO Jack Gerard.

“There is no real issue about
the environment that requires further investigation, as the president’s
own State Department has recently concluded after extensive project
reviews that go back more than three years. This is about politics and
keeping a radical constituency opposed to any and all oil and gas
development in the president’s camp in November 2012.

There has been speculation that cancellation or delay of the Keystone XL project would increase pressure to build the Enbridge Northern Gateway pipeline.

Pembina urges Harper to follow US “objective perspective”
of Keystone in looking at Northern Gateway

Keystone XL delayed until 2013, media reports say

Energy Politics

Numerous media reports, quoting sources, are saying that approval of the Keystone XL pipeline from Alberta to Texas has been delayed until 2013, after the current American election cycle.

The New York Times says U.S. to Delay Decision on Pipeline Until After Election

The Obama administration is preparing to delay a decision on the contested Keystone XL pipeline while it studies an alternate route, effectively pushing any action past the 2012 election, officials and lobbyists who have been briefed on the matter said on Thursday. An announcement is expected as early as Thursday afternoon.

The proposed project by a Canadian pipeline company had put President Obama in a political vise, squeezed between demands for secure energy sources and the jobs the project will bring, and the loud opposition of environmental advocates who have threatened to withhold electoral support next year if he approves it.

CBC reports Keystone project reportedly shelved until 2013

The U.S. State Department will order another environmental assessment for the Keystone XL pipeline route, allowing U.S. President Barack Obama to shelve the controversial issue until after the 2012 elections, media reports said Thursday.

Earlier Reuters and Bloomberg reported that US State Department had ordered new studies on the route of the Keystone pipeline.

Reuters says

The United States will study a new route for the Keystone XL Canada-to-Texas oil pipeline, U.S. officials said on Thursday, delaying any final approval beyond the 2012 election and sparing President Barack Obama a politically risky decision for now.

The delay was a victory for environmentalists who say oil sands crude development emits large amounts of greenhouse gases. It would deal a blow to companies developing Alberta’s oil sands and to TransCanada Corp, which planned to build and operate the conduit.

Analysts have said a long delay could kill the $7 billion project because it would cause shippers and refiners to look for alternative routes to get Canadian oil sands crude

The questions for northwestern British Columbia is, whether long delays in the Keystone XL pipeline will ramp up pressure to build the Northern Gateway pipeline from Alberta to Kitimat. One big difference here is that Stephen Harper has already won re-election and has a safe and pro-pipeline majority government.

Koch owned Flint Hills Resources is intervenor in Northern Gateway Joint Review

Energy Politics

Flint Hills Resources Canada LP, the energy and resources company owned by the controversial American brothers, David and Charles Koch, is one of the intervenors in the Northern Gateway Joint Review process, a check of the JR website shows.

Flint Hills Resources LP Canada registration at NGJR

The two men own Koch Industries, the second largest privately held company in the United States. According to a Forbes article quoted by Wikipedia, Koch Industries has a world wide annual revenue estimated at $98 billion.

Koch Industries website

Northwest Coast Energy News checked the JRP website after an article published online today by Columbia Journalism Review outlined the Koch brothers and their company’s involvement in the Keystone XL pipeline and their extensive holdings in Canada through Flint Hills Resources.

The Koch brothers are active in conservative American politics and numerous media reports say they are chief financial backers of the Tea Party.

Wikipedia says David and Charles have funded and libertarian policy and advocacy groups in the United States.

Since the 1980s the Koch foundations have given more than $100 million to such organizations, among these think tanks like the Heritage Foundation and the Cato Institute, as well as more recently Americans for Prosperity.Americans for Prosperity and FreedomWorks are Koch-linked organizations that have been linked to the Tea Party movement

On Nov. 7, 2011, The Guardian reported that the Koch brothers plan to launch a giant database listing all Americans with conservative leanings in an attempt to influence the 2012 elections, including the presidential race. See Koch brothers: secretive billionaires to launch vast database with 2012 in mind

An interactive from The Guardian lists all the Koch connections.

Koch replies to its critics on the KochFacts site.

Kitimat LNG on the agenda at Houston conference

Energy

The Kitimat LNG projects have been added to a conference on LNG exports in Houston, Texas on December 1.

Zeus Events, the commercial organizer of the conference tweeted this morning “Kitimat #LNG Export project added to N. American LNG Exports conference.”

The conference agenda describes the presentation this way:

Kitimat LNG Export Project Update
Kitimat LNG Project, Speaker TBA

Apache is developing the most advanced LNG export project in North America at Kitimat, British Columbia. Construction is expected to begin in early 2012, with operations to start in 2015. The representative has been asked to describe the project and provide an update, discussing what it will mean for British Columbia gas producers.

The conference website describes it as:

Proposals to liquefy and export North American gas as LNG have grown more numerous and controversial since our 2010 conference. At last count, ten liquefaction and export projects have been proposed on both coasts of North America. Analysts warn, however, that the United States is preparing to export its clean, abundant natural gas to countries like China, where it will be used for transportation fuel, while the U.S. will continue to import high-cost crude for its transportation.

This year’s conference will expand on our 2010 meeting to address political issues such as FERC’s willingness to approve export plant construction permits as well as examine new proposals. Costs, political hurdles and regulatory issues will be discussed.

The Oregon projects, seen by analysts at the June National Energy Board hearings as Kitimat’s chief rival are also on the agenda at the conference.

Not enough bitumen production to support both Northern Gateway and Keystone XL consultant says

Energy

Bloomberg news reports that a Calgary based energy research company believes Enbridge’s Oil Sands Project Is Years Early

Enbridge Inc., Canada’s largest pipeline operator, wouldn’t need to build the Northern Gateway project to export Alberta’s oil-sands crude for almost a decade if TransCanada Corp.’s Keystone XL is approved this year, according to IHS CERA, an energy research company.

The 732-mile (1,177-kilometer) Northern Gateway pipeline would pump 525,000 barrels a day from near Edmonton, Alberta, to the port of Kitimat, British Columbia, where crude would be loaded on tankers bound for Asia. The line, scheduled to start in 2017, would reduce Canadian dependence on U.S. markets and compete with the Keystone XL, designed to pipe 700,000 barrels a day to refineries in Texas along the Gulf of Mexico by 2013.

Jackie Forrest, a director of global oil at IHS CERA, said there won’t be enough oil sands production to support Northern Gateway’s launch even if, as she expects, Keystone XL approval helps the output double in 10 years to 3 million barrels a day.

The Bloomberg article goes on to quote one analyst who believes the Northern Gateway fight will get a lower profile than the Keystone XL.

Northern Gateway faces opposition from environmentalists and Indian groups because it passes through the Great Bear Rainforest and raises the risk of supertanker oil spills in the Douglas Channel. However, the Canada-only route may make the project less prominent than Keystone XL, which has drawn protests from celebrities such as Daryl Hannah and Margot Kidder, who played Lois Lane in several Superman movies.

“Northern Gateway would be an all-Canadian fight and thus perhaps could be less sensational and muscular, think Canadian Football League vs. U.S. NFL, but nonetheless might get very contentious,” Judith Dwarkin, chief energy economist for ITG Investment Research, wrote in an e-mail from Calgary.

Approval of the Keystone XL may not be the slam dunk that some in the Calgary oil patch believe. As Konrad Yababuski reports in The Globe and Mail in Keystone XL: More about the politics than the petroleum

Proponents of the TransCanada Corp. project, which would double the amount of Alberta crude flowing south, now fear that President Barack Obama will give in to pressure from the base of the Democratic Party to nix the pipeline.

With Mr. Obama’s approval rating sliding to a record low – leading more than half of Americans to think for the first time that he will be a one-term President – the White House needs to bring every stray Democrat it can find back into the fold before the 2012 election.

The progressive wing of the Democratic Party has been feeling particularly unloved by this White House. Killing the Keystone XL project would be a powerful way for the administration to show its renewed affection.

Which means of course if President Barack Obama does kill Keystone XL to keep his base happy, there will be more than enough bitumen sands for the Northern Gateway pipeline.

Editor’s note: Disclosure. I have always liked the CFL game, with three downs and the bigger field over the NFL, so the analogy is probably apt in describing the contentious Northern Gateway debate, a more wide open and interesting struggle.

Harper appears to endorse Northern Gateway in TV interview

Energy Politics

In an interview with Bloomberg News, Prime Minister Stephen Harper strongly endorsed the bitumen pipeline from Alberta to Texas, the controversial Keystone XL project and then went on to apparently push for the Enbridge Northern Gateway project by saying “there is all the more reason why Canada should look at trade diversification and particularly diversification of energy exports.”

In the interview with the business news service Harper said U.S. approval of TransCanada Corp.’s proposed $7 billion Keystone XL pipeline is a

“no-brainer” because it will create jobs and add to America’s secure energy reserves.

“The need for energy in the U.S. is enormous, the alternatives for the U.S. are not good, on every level,”

Harper said he’s “confident” the pipeline will be built.

Keystone would link Canada’s oil sands to U.S. refineries on the Gulf of Mexico coast. The 2,673-kilometer pipeline would begin in Hardisty, Alberta, and cross Saskatchewan, Montana, South Dakota and Nebraska.

The alternatives for the United States are not good. And, you know, on every level, not just economic (but) political, social, even environmental, the case is very strong for this…”The fact that there are these kinds of pressures to, you know, to potentially take decisions which would, in my judgment . . . to avoid a decision would be a complete no-brainer.”

Shawn McCarty of The Globe and Mail interprets Harper’s statement this way:

the federal government has broadly endorsed the oil industry’s efforts to build new pipelines to the West Coast to open up new markets in Asia.

The National Energy Board is reviewing plans for a natural gas pipeline to Kitimat, B.C., and a plant to liquefy the gas so it can be exported via tanker.

The NEB and Canadian Environmental Assessment Agency are holding a joint review of Enbridge Inc.’s more controversial Northern Gateway oil pipeline to the coast. The Gateway project is opposed by environmental groups and first nations, whose traditional lands would be affected.

Harper has now added his voice to cabinet ministers Joe Oliver and James Moore in pushing for the Northern Gateway Pipeline, which once again raises the question, why have the Joint Review Panel since it appears the decision to go ahead has already been made?

Related Link Vancouver Sun U.S. approval of Keystone a ‘no-brainer’: Harper

Japan seeking LNG from US: Reports

Energy Links

Japan wants to buy more liquified natural gas from the United States, according to reports in the business and energy media.

Bloomberg reported Japan to Boost LNG Imports From U.S. as Nuclear Power Declines

Japan, the world’s largest importer of liquefied natural gas, plans to seek more U.S. cargoes to ensure adequate power supplies after its use of nuclear reactors fell to an all-time low.

Japan’s senior vice minister of trade and industry, Seishu Makino, asked U.S. Energy Secretary Steven Chu at a meeting yesterday in San Francisco to increase LNG exports, Akinobu Yoshikawa, deputy manager for the Petroleum and Natural Gas Division, told reporters today in Tokyo.

Reuters reported Japan to start buying LNG from U.S. by 2015-Nikkei

Japan plans to start importing liquefied natural gas (LNG) from the United States as early as 2015 to secure a steady supply amid growing demand for the fuel, Nikkei business daily reported…

Japanese power and gas utilities would initially import 2-3 million tons of LNG a year, the daily said. Gas extracted from shale rock formations will be liquefied in Texas and Louisiana. The LNG will then be shipped to Japan via the Panama Canal, Nikkei said.

Liquified natural gas from fields in Alberta and British Columbia sold to Japan is a major reason for LNG developments at the port of Kitimat. Testimony at last June’s NEB hearings on the KM LNG export licence application warned of increasing competition from the US for Canadian LNG.

Obama press secretary questioned on anti oil sands demonstrations

Energy Environment links

U.S. president Barack Obama’s press secretary, Jay Carney, was asked about the continuing demonstrations in Washington against the Alberta oil sands and the Keystone XL pipeline proposal during a “gaggle” (an informal news conference) aboard Air Force One en route to Minnesota today.

The White House released this transcript of the brief exchange:

Q Also, anything on these protests outside the White House on this
pipeline? Has the President decided against TransCanada’s permit for the
pipeline? It’s the tar sands pipeline. There have been a lot of arrests
outside the White House about it.

MR. CARNEY: I don’t have anything new on that. I believe the State
Department has — that’s under the purview of the State Department
presently, but I don’t have anything new on that.

Q Is the President aware of the protests?

MR. CARNEY: I haven’t talked to him about it.

Protestors have been demonstrating in a restricted area near the White House and are inviting arrest as part of an ongoing effort to stop the Keystone XL bitumen pipeline from Alberta to Texas. The latest celebrity to take part in the protests was actress Darryl Hannah, who was arrested today, as reported by The Guardian.

The State Department did give its approval to the Keystone XL pipeline on Aug 26, saying, as reported in The Guardian.

The State Department said the proposed 1,700-mile pipeline would not cause significant damage to the environment.

The State Department in its report said the project – which would pipe more than 700,000 barrels a day of tar sands crude to Texas refineries – would not increase greenhouse gas emissions. It also downplayed the risks of an accident from piping highly corrosive tar sands crude across prime American farmland.

Campaigners accused the State Department of consistently overlooking the potential risks of the pipeline.

The largest anti-pipeline demonstration is expected on Sept. 2, when First Nations leaders are expected to join the protests in front of the White House.