Keystone XL Pipeline Rejected, Obama Announces
Great news today via the NY Times regarding the construction of the Keystone XL Pipeline. President Obama took advantage of low gas prices and the resulting decline in US oil production to officially reject the construction proposal today. Since coming into office, Obama has made a strong push for a clean energy future, and shutting down Keystone XL after a 7-year battle could very well be the capstone on that effort.
The Keystone XL Pipeline was a key supply pipeline cutting through the center of the US in order to deliver crude from the Canadian Tar Sands down to US refineries in Texas and Louisiana. While this is just one pipeline among many proposals, it had grown to symbolize the fight against Big Industry and for the environment. Additionally, because this pipeline would have been supplied by crude from the Canadian Tar Sands, not having this cheaper, direct outlet to high-volume refining will keep the bar high for tar sands oil, which is extremely damaging to the areas from which it is produced, and requires a significant amount of energy to get out of the ground.
Check out the full NY Times article for all the juicy details; and afterwards, head out (in your EV) to celebrate (responsibly 🙂 ). It’s almost like a surprise Christmas gift to welcome you into your weekend :).
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$2 a GALLON? We were nearly paying that per litre in the UK until recently, but great news on the pipeline, anything that hastens the demise of the tar sands is good news, conversely I am hoping that, if and when Iran, resumes production it will finally nail the tar sands abomination!
Yeah and it’s our (US) absurdly low prices that are hastening the demise of the planet…I’m with you – let the tar sands die.
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Oil companies make their profit as a percentage of the sale price increasing cost often just increases their profit per gallon. I look at it like tobacco once the government gets really hooked on the tax income their then invested in propagating the sale of these harmful product. So when an alternative less damaging alternative come along like vaporisation of extracts the Government finds it’self actually supporting the entrenched more damaging industry. In the end smokers and drivers consume what they need or desire without a lot mind for the price per gallon or pack. Yes they might wince but in the end they just cut consumption on something less important to them and use what they think they need. How many people really just drive around for the hell of it because gas is cheap.
Dunno…I can justify a lot more EVs to my friends when they’re cheaper. I put together comparisons ALL THE TIME vs 20mpg gas guzzlers. At 1000mi/year which is very average, and 20mpg which is common, that’s 50 gallons of gas…or $50 / mo every time the price of gas swings $1 like it did 2 months back. So, $4/gallon is great for justifying EVs…turning $200/mo into $40 worth of electricity is nice savings to offset an EV lease that might only be $150 or $200 (like the Chevy Spark, maybe the Smart EVs, etc.
Leasing is only 25% of new car sales which is only about 30% of overall car sales so talking about leasing is hitting max 7.5% of car buyers. Some people (like me) run their cars till the wheels fall off and can’t stand the idea of having car payments for years and then nothing to show for it. Ref:
http://www.edmunds.com/about/press/leasing-is-shifting-the-new-car-market-but-it-isnt-the-best-choice-for-everyone-says-edmundscom.html
For people that don’t want to lease and do hold onto their cars a long time, it makes sense to wait for battery prices to come down and for selection to increase. Toyota and Honda are planning on having 40 mile range PHEVs next year or so and many people trust them more than Chevy.
One site, I think it was HybridCars, did a cost comparison of Prius vs. 2016 Volt including tax rebates and depreciation. It included the off-peak cost of electricity which a lot of green sites casually ignore. It was too close to call.
I have been interested in getting off ICE’s forever and at current gas prices it is a matter of being green to save the planet, not economics. I have no idea if or when gas prices will ever get back to $100/bbl.
It’s tough to take all factors into account in an article vs a full report. I just did an analysis of ICE vs EVs and used flat, local electricity pricing because it was just too much data for my little pea brain to cram into an article. Having said that, it was just focused on looking at apples to apples EVs vs ICE and presenting a framework for comparison.
All cars, driving habits, commute times, gas prices, electricity rates (peak vs off peak vs ultra off peak) are different. As long as the approach is defined (why are you looking at the situation the way you are), it’s fair in my opinion. I do my own case studies for our situation when tracking EV costs, justifying savings or spending and even then, the reality is different.
typo: 1000mi/yr should be 1000/mi/MONTH
Rodney Dangerfield misquote: I just can’t get no respect either for my solar wheat grass panels for making juice.
One of the most efficient uses of the sun. Two panels that grow in the shade for a week sell for $20 here or $70 in Vancouver.
So there is rampant misuse of the star spangled dollar.
The tar sands are one of the earth’s largest solar energy storage batteries. They can hold a charge till another generation comes along with better ideas of how to use them.
It will not hasten the demise of the tar sands one bit, the only thing it means is that the oil will be sent on less efficient train cars instead. The issue is entirely political, its about protecting business for the railroads, which objectively are less efficient, more dangerous, and more polluting.
Tar sands production would have expanded if the XL had been built. Now that oil prices are down, that is less likely.
The expansion will still happen though, it may be delayed a bit, maybe 5 years, but worldwide demand is still increasing, and the most likely outcome is that the oil will go to directly China, India, and other places where it won’t be processed and used at anywhere near the environmental standards it would have been if it had entered the market through the United States instead.
Are tar sands even economic now at $50/bbl?
“Based on an analysis of top-tier SAGD oil-sands projects operated by Cenovus and MEG Energy, TD Securities estimated WTI prices must rise to $50 a barrel for these operations to generate positive long-term cash flows when sustaining capital requirements are included.
Canadian oil-sands producers such as Cenovus, Canadian Natural and Suncor all announced plans earlier this year to shelve—but not abandon—plans for new or expanded subsurface oil-sands projects until global oil prices rebound or costs can be reduced dramatically. That could curtail growth in Canada’s oil patch production in the next decade after projects already under construction come online.
New SAGD projects require an average oil price of $80.06 a barrel to recover shipping and other costs plus a 10% return on investment, according to a recent study by the Canadian Energy Research Institute.”
http://www.wsj.com/articles/oil-sands-producers-struggle-1440017716
This says we may be near peak demand and may never see $100/bbl again:
http://www.reuters.com/article/2015/11/05/oil-demand-idUSL8N12Z4ZJ20151105
Thus, expensive tar sands may never see much more expansion. We can hope.
Peak demand is a real possibility as we switch to alternative transport modes. Oil is assumed they had monopoly and oil prices could rise with newer exotic extraction. They can’t do that indefinitely. It restricts demand. In the future, as now, you can have all the oil you want at a higher price than in the period preceeding about 2004. The high price of extraction and the steadily falling price of renewables will help leave it in the ground.
Economics now favor renewables. As public sentiment re GW changes, policy will also. Still much work ahead, but it’s not as bleak as 40 years ago.
But here in Canada, they are trying to ship it via an old pipeline going East, and building the missing part from Ontario through New-Brunswick. Called Energy East, Yuck!
I just hope population’s refusal will beat the politician’s sickening indulgence.
Could do with some links on that? You seem to be saying that the tar sands could still be imported by reversing and improving an existing pipeline?
coming… meanwhile try “energy east 101” on youtube
A tremendous victory for Bill McKibben and his small army of activist protestors. They would not have won without the fall in oil prices and the global shift in opinion against fossil fuels, but without them it still would not have happened.
Yeah, at least the drop in oil prices was good for something. I feel like it’s a great time to slap a $1/gallon tax on gas…
If ever there was a time…
(And at least make it cover the cost of road infrastructure… I think that would be more than $1/gallon…)
I’m selfishly going to ask that we use the funds to drive the cost of EVs down. One of the only times subsidies make sense is when we have a compelling need to change…this is one of those times. Either an oil tax or just stop all these ridiculous military actions for what…1 year? and use that money to buy everyone an EV.
Maybe Oprah could buy us all an EV? I will take mine in a dark blue please.
Hah. I think that show will air in something like 2020 when the masses realize that an EV is not a new diet but a car! (revolutionary!)
See, the problem there is we already have so much “re-appropriation” that no one can keep track… we need to get back to using funds for what they were intended – simplify the money flow so that the average american can see where the money is coming from, and where it’s going. We’ll get a much more efficient government with a lot more spare money to actually accomplish things with.
Use a gas tax to fix the roads – and make all road money come from gas tax/registration fee (which should be charged proportional to the weight of the vehicle being registered, not the type of vehicle)
Besides, if anything we should be promoting the manufacture of the batteries for EVs – we’re going to have trouble producing enough batteries to keep up in the next few years…
And our lovely governor here in Michigan wants to raise registration fees for all EV’s over ICE vehicles…what a clown. Our roads are crumbling so raising gas taxes on ICE vehicles wasn’t enough….he wants to add a surcharge on EV’s….so much for government encouraging fuel conservation and emissions….
If he wants to raise money for roads, raise the registration on all vehicles. (Or better yet, just raise the gas tax more.) Raising it on only EVs will do next to nothing to bring in money… there simply aren’t enough of them yet!
He wants to raise gasoline tax and registration fees for all vehicles but also an extra surcharge on EV’s because they figure they are not getting gas tax revenue on the EV’s….I hate this state…they do nothing to encourage clean energy use. By adding the surcharge for EV owners brings pennies in revenue but does nothing to encourage green energy….
So that might be a valid arguement… but realistically, there are so few EVS it won’t actually make a difference in income… especially when we are still actively subsidizing their adoption through tax credits! (It actually probably only affects their resale value and hurts the used ev buyers… so the well informed middle class. Great policy there.)
Thanks for the info though!
It seems to me the market should be able to handle a $1/gallon tax. We pay the equivalent of over $4/gallon in Toronto and just over 50% of the price is taxes displayed clearly in a pie graph right on our gas pumps. And that’s with oil at all time lows and sadly we think that’s a decent price because it was higher…
The extra tax would also have the added benefit of further encouraging EV’s and who could argue with that here =)
haha Adding a $1/gallon tax would give the GOP a sweep in 2016. Cheap gas might actually be a really good thing right now.
It will help the Dems win the White House, Senate.
It is really hurting the Oil/Gas industry.
With Carson likely out of the race with this west point business, it’s either trump or one of those other few contenders. What scares me about the GOP is how they simply deny the science. Trumps last quote about how the chinese made up climate change…what?!? Rubio saying it’s bad for economic growth….huh? I would say ocean levels rising is bad for economic growth but maybe they just plan to start selling boats. I’ll get off my soap box but yeah…any dem over most of the repubs. I’m interested in Carly but she’s likely out already.
I doubt Carson is out of the race.
Sorry for bringing up politics. I’m not sure how that one will settle out but it seemed like a big blow for them.
They all have huge problems but they keep going. Carson will simply say he was offered West Point by the General. The General could have, with a single phone call, made it happen. No more scandal.
I get more of a kick out of Carson saying he has was cured of cancer by some tea. That he has not been getting kickbacks from that tea company despite spending lots of his life advocating their products. Then he gets the cancer surgery anyways to show others surgery should not be feared!
Carson is incredible when taken by himself. But he’s not alone. All those Republicans are so beyond crazy you get crazy numb and start accepting…
While not wanting to encourage going ‘off topic’ it would be handy if you cousins could post a link, so we in the UK could follow the meanderings of your Republican aspirants?
The Bushes were bad enough, then the Palin scare and now Trump!
Please tell me our right wing press is just indulging in a collective ‘wet dream’ when they report on Trumps ‘popularity’
Republicans are so sad you have to approach it humorously. Start with Bill Maher http://www.hbo.com/real-time-with-bill-maher/episodes/index.html
Politics in the USA is all about who can tell the biggest lies with a straight face.
Or here https://kat.cr/usearch/bill%20maher/
Bush 2 said he was an environmentalist.
So many Bushes. They all say a lot of things and then change their minds.
Get your Dems in, then you have four years to screw the Kotch bros and associates into the ground, and keep their FFs underground.
California has cap and trade, I recall. The price reflects carbon some now. It’s higher here than other states, not 2 dollars.
“Activist protestors”
You’re saying lobbyists rule?
The FF lobbyists have ruled for years, the game is now, hopefully,changing?
I suspect the US would change their tune if a different pipeline were built, like the eastern pipeline, and Canada decided to stop selling to the US at all… Not going to happen of course but it would definitely change their mind. Politics aside the US is heavily reliant on Canadian Oil.
Is that true? It seems to be getting most domestic oil from shale in the Dakotas. Still importing plenty from overseas. I don’t think tar sands can compete at $50/barrel. It should be completely uneconomic right now.
It does look like we import a ton of Canadian Oil. I was surprised too. Frankly, I would be all for losing imports. Drive the price up, provide a better cost case for EVs and encourage conservation. http://www.eia.gov/todayinenergy/images/2012.11.28/oilimportsother.png
That was old so I dug further.The US exports 7.5M bbls/day but… “Canadian oil exports to the U.S. are still far larger. Canada exported some 2.7 million barrels per day to the U.S. in April, according to the National Energy Board.” http://i.huffpost.com/gen/1910678/thumbs/o-US-OIL-EXPORTS-TO-CANADA-570.jpg?6
That’s a 45 mile long rail tanker car black snake crossing the border every day by my calculations.
Yes. Its large from Canada. Wish I could find one that starts 2000 and goes to present.
Non Canadian imports have been dropping lately.
http://www.oilandgas360.com/wp-content/uploads/2015/11/crude_oil_imports.png
I was reading in one of the commodities market reports that fracking is now viable at $27/BBL. Tech and price improvements come in every industry, not just battery technology.
Fracking is something used all the time in oil and natural gas. It’s not a price thing…just a method for breaking up the underground layers in the rock to release natural gas/oil. It’s done all the time and has been for decades. My dad has worked in oil for the last 3 decades and has talked about it for years, running frac jobs, pigs, etc etc..
The big problem with fracking is the leakage. From extraction to final use there is from 8-13% leakage of natural gas (mainly methane) which is 3x worse than CO2.
Oh completely. I’m definitely not a fan of it but do know it’s been widely used for decades. My understanding is that when done properly, it’s not a major issue but it’s very hard to regulate and with the frequent expansion and contraction of the industry based on pricing,
Having said that, I have a hard time that it can be done without issues no matter how it’s done. Just seems like a terrible idea across the board. Having said that, I’ll challenge you (all) to cutting your oil usage, today. The problem is that there are customers, not just that people are trying to meet the needs of the customers. WE are the problem.
Try 105 times worse for first 20 years.
“105 times. Level of heat trapping potency that methane is greater than carbon dioxide over a 20-year time frame according to NASA research.”
http://www.global-warming-forecasts.com/methane-carbon-dioxide.php
I’m confused. I know current oil prices have caused all new drilling for fracked oil to pretty much stop – tons of drilling rigs parked. Only wells partially started are being continued. And production of fracked well drops 70% in first year.
There was a lot of wildcat drilling when oil was $100/bbl. Those have folded and only the serious producers are left. Some of those may fold but there are now some very economical fracking sites that can still make money with oil around $45/bbl. Some but not all fracking sites are sucking up the last drops and quit after a few years. Some others can go on for quite a while.
I’m basing my knowledge on J. David Hughs who has considerable credibility. And while I couldn’t quickly find numbers to confirm your statement you might find this good reading:
http://www.postcarbon.org/wp-content/uploads/2015/10/Hughes-Bakken-Reality-Check-Fall-2015.pdf.
The report you cite appears very credible and I hope is the case. That
could mean oil goes back up in price soon which would be great. Thanks for finding that.
I am not going to defend what I read because it was just a report in a stock and commodities market news site.
Sounds like we’re both just trying to get at truth. Too many just accept info that reinforces their beliefs. I’ve been intrigued by reasons for price of oil and after a lot of investigation confused as ever. Best guess is oil will stay down for another year or so. So complex – reasons and ramifications.
That’s right. It’s complicated. A big chunk of oil is controlled by a few Saudi families. When the king died, the policy changed to cheap oil. There is a huge amount of oil and gas in storage, demand has flattened compared to earlier projections, and US oil output has just started to crest. The price can’t go back up until the Saudis grow tired of borrowing to keep it low, US oil production drops, the inventory drops, and demand picks up. That sounds like years to me. No time soon.
And in the meantime, US oil,producers have figured out how to produce cheaper.
It won’t return to 16/barrel, but it’s likely it will hover around or just below 40 for some time.
Now I’m confused! Why would a rise in oil prices be beneficial? It would bring the tar sands and other highly polluting developments back into play?
What I observe is that when gas prices go down, interest in saving gas goes down too, along with sales of hybrids and EVs. It is astonishing how few people take global warming seriously. It seems that if there isn’t a mega-hurricane smacking them in the face this very minute it is “business as usual”.
My hope is that the Saudis will keep prices high enough to increase sales of hybrids and variants of EVs but low enough to keep fracking from getting popular again.
Nutty I have to rely on the Saudis to do what my elected Congress can’t. A $2/gal gas tax would work too, but that’s just crazy talk.
Fracking? My understanding is that its not all the same. Shale oil is not tar sands. And methods change with location because the geology is different. Fracking methods have improved, but I don’t think all of them are viable at $27/bbl. I heard its mostly the Texas stuff, but that might not be right.
Its also hard to tell, because they can share costs with some wells getting both gas and oil.
Judging from the huge drop in US wells, the majority of Fracked wells are not able to produce at $27/bbl. However, there must be a lot of capped wells that are already drilled. The marginal cost will allow them to be reopened. It all depends on if they can keep the bank officers away and find some other way to make money in the meantime. 🙂 I mean the money is already spent. They have a large incentive to get some of it back eventually. Thats got to keep prices depressed for a long time.
Not as much pressure in the old, tired, capped wells.
Yes, that’s true. They have fast depletion rates. I was referring to ones they capped before they tapped any oil, in an attempt to wait out the market.
But tar is natural, organic, doesn’t contain nasty GMO contamination, and looks like Vegemite. I’d eat it, but is smells bad.
Can the president do this legally? I’m not a supporter of the pipeline but the government has a process of approving project like this and it’s not just a political decision of the president.
Think if some regressive Republican get’s into office and unilaterally decided to deny cheaper midwest or west coast renewable power from being transmitted via new superconducting lines to markets with less renewable potential to protect Coal,Gas or nuclear plants or acts to prevent BLM or offshore “federal” land to solar or wind development.
Frankly cheap oil killed this pipeline along with the oil sands before any presidential decision and this simple opens the federal government to long term legal liability. In this way the financial stakeholders can defer loses during the years it will take to resolve their grievances legally. Hell they might even win. When it comes to interstate commerce and trade deals the courts have laid down some significant rulings against the executive and even legislative branches before. Defending the law and legal not politically regulated commerce is a big deal with the judiciary..
Yes, any new pipeline that crosses US borders must have presidential approval. It’s the LAW, yo.
Unfortunately, oil companies have won approval to expand other existing pipelines to a larger capacity than Keystone XL would have been, so this doesn’t feel like a victory to me. Frustratingly, NONE of the emails or news articles I’ve seen about this has mentioned this fact. We should be fighting those other expansions instead of celebrating.
I’ll definitely say that this isn’t my expertise so if you have other sources for those secondary pipeline approvals and how they compare in terms of capacity, I’d be interested and might be able to roll that into another article.
Hi Kyle,
Here’s what I wrote 3 months ago in response to another Cleantechnica article:
Tragically, I think TransCanada and friends still got their way here because they managed to upgrade the Alberta Clipper pipeline to carry 560,000 barrels of tar sands oil a day to Texas and are upgrading again to carry 1,600,000 barrels. Keystone XL was to carry 800,000 barrels so they’ve basically got almost that much capacity using their alternative pipe and will have double Keystone’s capacity soon, if they need it.
The good news is that delaying (maybe killing) Keystone delayed tar sands growth when it looked like a sure economic bet and now it looks like a questionable economic bet. Thus tar sands development has slowed and is not as big as it would have been if Keystone had been built years ago. Hopefully tar sands will die sooner rather than later as renewables accelerate.
See http://www.climatecentral.org/news/keystone-xl-alternative-pipelines-18821
But now they have a bunch of oil they can’t sell because its too expensive. The pipeline would have lowered transport costs, but it doesn’t matter as much now.
Tar sand oil produces much more CO2 than conventional. So it does matte which kind we use.
But any move that makes the tar sands move to being uneconomical is a help surely? And most of the reports I have read recently state that the tar sands are now loss making or bordering on being loss making?
You’re absolutely right about other pipelines getting sneaked in. But, can’t we get to enjoy a bit of good news for a brief moment? And it is good news – Koch’s own a big chunk of affected tar sands action. There’s a reason they wanted this particular pipeline.
Nope! No enjoyment allowed! 😉
But seriously, I don’t feel any enjoyment in this victory because I don’t think it’s a victory at all. The oil companies still got the tar sands moving capacity they wanted and the right wing gets to blame Obama in the media for another “crazy left wing” decision. If Obama had made this decision a few years ago when there actually was a lot of pressure on him to approve the pipeline, that would have been a victory. At this point, big oil doesn’t need the pipeline anymore so who cares if it’s declined? Maybe they think they need it for even more oil moving capacity in the future if oil prices rise again, but I don’t think it’s an urgent issue for them anymore. I’d really like some in-depth investigation of those kinds of questions so it really bugs me that nobody is talking about it.
The victory here is that so many people cared enough to fight against keystone and they truly did a lot to delay tar sands capacity long enough for oil prices to crash and make tar sands development un-worthwhile. But that victory has been ongoing. And with all these people who care, it bothers me that nobody at 350.org, avaaz, moveon, etc has been organizing against these other pipeline expansions that seem to be done deals at this point. Did they decide there was no realistic way to fight the expansions? Do the expansions even matter? Did Keystone even matter or was it just an excuse to get people to work together and build a movement? Nothing wrong with that I guess but these kinds of lingering questions bother me.
See pdf here, section 2.
I’d like to see a study done showing more renewable jobs will be created by dumping the pipeline than the pipeline would have created. And a follow up showing the renewable energy will also be cheaper than what we could have gotten with the tar gook.
I’m glad the pipeline did not get approved but that will not stop the tar sands from coming into the country. They are still shipping it by rail and truck. The pipeline would just have make it faster and safer to get the oil to the processing facility in Texas.
The pipe was laid on top of rocks in the trench, leaks would occur as the tar started to flow and the whole trench would contaminate the aquifers that irrigate six farming states.
The Keystone XL pipeline was a stupid idea to begin with, because there is no equipment to clean-up a toxic, tar sands spill. Remember the Kalamazoo.
The statement is radical coming from a US president.
“America is now a global leader when comes to taking serious action to fight climate change, and frankly, approving this project, would have undercut that global leadership. And that’s the biggest risk we face.
Not acting.
Today we’re continuing to lead by example.
Because ultimately if we’re going to prevent large parts of this earth from becoming not only inhospitable, but uninhabitable, in our lifetimes, – we’re going to have to keep some fossil fuels in the ground rather than burn them, and release more dangerous pollution into the sky,”
Get that? Leaving it in the ground.
We have departed with the past.
Finally. Thank heavens.
Very true,but cue republicans filling the airwaves and other media re; job losses, energy security and all the other tiresome lies, which unfortunately find a home in the minds of many voters.
Voters in both parties are overwhelmingly concerned with climate change. The current bunch of repub candidates are a throwback to the Stone Age. This should increasingly catch up with them at the polls. 1 big reason republican are ahead in house, gerrymandering. That needs correction.