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Oil prices surged on Wednesday on news that the Keystone pipeline might not restart for several weeks. The outage at the damaged pipeline ended several years of contango for WTI, pushing the benchmark into a state of backwardation for the first time since 2014.

TransCanada made a lot of headlines in the past week. The Keystone pipeline ruptured and spilled more than 200,000 gallons of crude oil in South Dakota last week, just days before TransCanada was given a greenlight for the Keystone XL in the state of Nebraska. South Dakota regulators now say that they could revoke the permit for the Keystone pipeline if it is found that the company violated the terms of its license. The spill was the third for the Keystone pipeline in less than 10 years.

“If it was knowingly operating in a fashion not allowed under the permit or if construction was done in a fashion that was not acceptable, that should cause the closure of the pipe for at least a period of time until those challenges are rectified,” said Gary Hanson, a member of the South Dakota Public Utilities Commission, told Reuters.

TransCanada said on Wednesday that it could take weeks to clean up the spill and bring the pipeline back online – news that sent shockwaves through the oil market. WTI spot prices surged on the news, pushing the benchmark back up above $58 per barrel.

TransCanada said that November deliveries through the pipeline would be cut by about 85 percent, a major outage for the nearly 600,000-bpd pipeline. Phillips 66, a major refiner that purchases crude from the pipeline, said that it is expecting an outage of about four weeks.

…click on the above link to read the rest of the article…

Exclusive: Release of Inspection Reports From TransCanada’s Keystone Pipeline Expose Risk of Future Spills

May 5, 2016

Exclusive: Release of Inspection Reports From TransCanada’s Keystone Pipeline Expose Risk of Future Spills

Inspectors at the US Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) observed TransCanada’s contractors violating construction design codes established to ensure a pipeline’s safety, according to inspection reports released to DeSmog under the Freedom of Information Act (FOIA).

Evan Vokes, former TransCanada materials engineer-turned-whistleblower, told DeSmog the problems uncovered in the reports show issues that could lead to future pipeline failures and might also explain some of the failures the pipeline had already suffered.

Vokes claimed PHMSA was negligent in failing to use its powers to shut down construction of the pipeline when inspectors found contractors doing work incorrectly. “You cannot have a safe pipeline without code compliance,” Vokes said.

The Keystone and the Cushing Extension are part of TransCanada’s Keystone Pipeline network, giving the company a path to move diluted Canadian tar sands, also known as dilbit, to the U.S. Gulf Coast.

The Keystone pipeline network is made up of the Keystone Pipeline (Phase I), that runs from Hardistry, Alberta, to Steele City, Nebraska, and the Keystone-Cushing extension (Phase ll), from Steele City to Cushing, Oklahoma. There, it connects to the southern route of the Keystone XL, renamed the Gulf Coast Extension (Phase III), that runs from Cushing, Oklahoma to the Gulf Coast in Texas.

The final phase of TransCanada’s network, the Keystone XL, (Phase lV), originating in Alberta, is meant to connect to the Gulf Coast pipeline. But KXL is blocked for now since President Obama rejected a permit TransCanada needs to finish its network.

…click on the above link to read the rest of the article…

Top Five Climate and Environment Issues for Obama-Trudeau Bilateral Summit

March 10, 2016

Top Five Climate and Environment Issues for Obama-Trudeau Bilateral Summit

Former Prime Minister Stephen Harper was a staunch supporter of what he called the “no-brainer” project. President Obama, on the other hand, felt like all sorts of brain should be involved when deciding on the future of such major fossil fuel infrastructure. And he rightfully rejected the border crossing pipeline project, which had clearly failed his climate test.

Now, with Canada’s new Prime Minister Justin Trudeau at the helm of America’s Hat, the two most intimately tied economies in the developed world have a lot of catching up to do. Even with Keystone XL dead and buried (sort of), environment and energy issues are still top of mind for the two leaders.

In a recent Q and A with the Huffington Post, Trudeau acknowledged the timing is right for bold leadership on climate change and the environment: “There is a nice alignment between a Canadian Prime Minister who wants to get all sorts of things done right off the bat and an American President who is thinking about the legacy he is going to leave in his last year in office,” Mr. Trudeau said.

“The issues that are important to him and to me are climate change.”

Obama and Trudeau already had an informal ‘bromance’ meeting soon after the new Prime Minister took office in November 2015. But now, with the unprecedented Paris Agreement behind them, the two leaders have an incredible opportunity to break new ground on climate action and environmental protection at this formal summit.

Here are the top five energy and environment issues these self-proclaimed climate leaders should have on their agenda:

1. North American Climate Change Strategy

…click on the above link to read the rest of the article…

Once Unstoppable, Tar Sands Now Battered from All Sides

February 1, 2016

Once Unstoppable, Tar Sands Now Battered from All Sides

Canada’s tar sands industry is in crisis as oil prices plummet, pipeline projects are killed, and new governments in Alberta and Ottawa vow less reliance on this highly polluting energy source. Is this the beginning of the end for the tar sands juggernaut?

In the summer of 2014, when oil was selling for $114 per barrel, Alberta’s tar sands industry was still confidently standing by earlier predictions that it would nearly triple production by 2035. Companies such as Suncor, Statoil, Syncrude, Royal Dutch Shell, and Imperial Oil Ltd. were investing hundreds of billions of dollars in new projects to mine the thick, highly polluting bitumen.

Eyeing this oil boom, Canadian Prime Minister Stephen Harper said he was certain that the Keystone XL pipeline — “a no-brainer” in his words — would be built, with or without President Barack Obama’s approval. Keystone, which would carry tar sands crude from Alberta to refineries along the Gulf of Mexico, was critical if bitumen from new tar sands projects was going to find a way to market.

What a difference 18 months makes. The price of oil today has plummeted to around $30 a barrel, well below the break-even point for tar sands producers, and the value of the Canadian dollar has fallen sharply. President Obama killed the Keystone XL project in November, and staunch

The industry is suddenly weathering a perfect storm that analysts say has significantly altered its prospects.

opposition has so far halted efforts to build pipelines that would carry tar sands crude to Canada’s Pacific and Atlantic coasts.

Equally as ominous for the tar sands industry are political developments in Alberta and Canada. In May, Alberta voters ousted the conservative premier and elected a left-of-center government. The new premier, Rachel Notley, is committed to doing something meaningful about climate change and reviewing oil and gas royalty payments to the province, which are among the lowest in the world.

…click on the above link to read the rest of the article…

Keystone XL may be dead. The oilsands probably aren’t

November 11, 2015

Keystone XL may be dead. The oilsands probably aren’t

Low petroleum prices mean new projects are on pause, but existing production won’t disappear

The oilsands are producing more than two million barrels per day from long-term projects that are very difficult to shut in. The transport network is like a game of whack-a-mole: One access point is knocked down, others pop up.

There is some soul searching going on in the oilpatch this week in the aftermath of the U.S. rejection of Keystone XL. Would a carbon tax have changed things? A gentler hand with the politics? How much of the U.S. decision was connected to increases in their own domestic production?

What they aren’t asking is how to get oilsands product to market. Because it’s getting there, in ways both obvious and unexpected. The oilsands have lots of problems, like low prices and high costs. But right now, market access is pretty far down the list.

Oil is even being floated on barges down the Mississippi, though this barge was hit by a tow boat in September. (The Associated Press)

A slow boat down the Mississippi

“There is sufficient capacity to move all our production,” said Greg Stringham, vice-president of oilsands and markets with Canadian Association of Petroleum Producers (CAPP). “There hasn’t been any production that has been shut in because of pipeline capacity.”

In the years since Keystone XL was first proposed in 2008, Canadian oil exports to the U.S. have increased by more than a million barrels a day. Rail has picked up some of that slack, maxing out at 165,000 barrels a day in 2014. It was around half that in the most recent quarter.

…click on the above link to read the rest of the article…

Transcanada Just Killed The Keystone XL Pipeline

November 2, 2015

Transcanada Just Killed The Keystone XL Pipeline

In an ironic twist, just hours after we discussed the record capital outflow from Canada, resulting from the plunge in oil prices and the mothballing of Canada’s energy industry, Obama’s long-desired goal of killing the Keystone XL pipeline has finally come true.

Moments ago, the WSJ reported that Alberta-based Transcanada asked to suspend its U.S. permit application, “throwing the politically fraught project into an indefinite state of limbo, beyond the 2016 U.S. elections.”

Calgary, Alberta-based TransCanada Corp. sent a letter to the State Department, which reviews cross-border pipelines, to suspend its application while the company goes through a state review process in Nebraska it had previously resisted.
“In order to allow time for certainty regarding the Nebraska route, TransCanada requests that the State Department pause in its review of the Presidential Permit application for Keystone XL,” the company said in the suspension request reviewed by The Wall Street Journal. “This will allow a decision on the Permit to be made later based on certainty with respect to the route of the pipeline.”

The WSJ correctly notes that “the move comes in the face of an expected rejection by the Obama administration and low oil prices that are sapping business interests in Canada’s oil reserves.” Clearly the former was never an issue before, however the collapse in oil prices and the resultant plunge in CapEx spending means that the pipeline no longer made much economic sense.

Big Oil in Retreat

August 15, 2015

Big Oil in Retreat

On July 14, 2011, at TomDispatch, Bill McKibben wrote that he and a few other “veteran environmentalists” had issued a call for activists to descend on the White House and “risk arrest to demand something simple and concrete from President Obama: that he refuse to grant a license for Keystone XL, a new pipeline from Alberta to the Gulf of Mexico that would vastly increase the flow of tar sands oil through the U.S., ensuring that the exploitation of Alberta’s tar sands will only increase.” It must have seemed like a long shot at the time, but McKibben urged the prospective demonstrators on, pointing out that “Alberta’s tar sands are the continent’s biggest carbon bomb,” especially “dirty” to produce and burn in terms of the release of carbon dioxide and so the heating of the planet.

Just over four years later, the president, whose administration recently green-lighted Shell to do test-drilling in the dangerous waters of the American Arctic, opened the South Atlantic to new energy exploration and drilling earlier this year, and oversaw the expansion of the fracking fields of the American West, has yet to make, or at least announce, a final decision on that pipeline. Can anyone doubt that, if there had been no demonstrations against it, if it hadn’t become a major issue for his “environmental base,” the Keystone XL would have been approved without a second thought years ago? Now, it may be too late for a variety of reasons.

The company that plans to build the pipeline, TransCanada Corporation, already fears the worst — a presidential rejection that indeed may soon be in the cards. After all, we’ve finally hit the “legacy” part of the Obama era. In the case of war, the president oversaw the escalation of the conflict in Afghanistan soon after taking office, sent in the bombers and drones, and a year ago plunged the country back into its third war in Iraq and first in Syria.

…click on the above link to read the rest of the article…

Permits Required to Build TransCanada’s Keystone XL Pipeline in Jeopardy As Hearings Reveal Missteps

August 4, 2015

Permits Required to Build TransCanada’s Keystone XL Pipeline in Jeopardy As Hearings Reveal Missteps

TransCanada’s decision to purchase all of the pipe needed to complete the Keystone XL Pipeline before receiving a presidential permit could prove a costly mistake.

Not only is President Obama expected to reject the permit TransCanada needs in order to cross the U.S.-Canadian border, the company must recertify an expired permit before it can install the pipeline though South Dakota as well.

At a hearing that began on July 29 in Pierre, South Dakota, the state Public Utilities Commission (PUC) is tasked to decide if it should recertify the company’s permit to build the Keystone XL pipeline through the state. Those opposing the Keystone XL, referred to as interveners, are making the case that TransCanada is not up to the job.

During the first week of the hearing, a mix of members of the grassroots group Dakota Rural Action, Native American tribes, individual landowners, and a team of all of the interveners’ lawyers began presenting testimony challenging TransCanada’s narrative that the Keystone XL “will be the safest pipeline ever built.” The interveners claim that is a public relations ploy far from the truth about TransCanada’s performance record.

TransCanada bears the burden to prove it is capable of following the rules that the PUC set when the original Keystone Pipeline permit was granted in 2010, so it is no surprise that the company objected to the interveners’ introduction of evidence that showed the company has had problems with its other recently constructed pipelines, including the Keystone XL’s southern route, renamed the Gulf Coast Pipeline.

Lawyers for the interveners have also questioned the PUC’s impartially. They believe the commissioners’ pre-hearing rulings to exclude testimony relevant to their case was unjustified. But instead of letting the PUC’s move weaken their case, they laid the foundation during their examination of witnesses that enabled them to refer to the excluded documents in their cross-examination.

…click on the above link to read the rest of the article…

TransCanada Keystone XL Hits New Turbulence As South Dakota Permit Hearing Implodes Over Pipeline Corrosion, Market Demand

July 31, 2015

TransCanada Keystone XL Hits New Turbulence As South Dakota Permit Hearing Implodes Over Pipeline Corrosion, Market Demand

Keystone corrosion TransCanada root cause report

Holes too big to fix were poked in TransCanada’s narrative that its Keystone XLtar sands pipeline will be the safest pipeline ever built. And questions were raised about how the pipeline company’s financial dealings are set up duringPublic Utilities Commission hearings in Pierre, South Dakota this week where state regulators are tasked to decide if the company is capable of following the rules the state set when the original Keystone pipeline permit was granted in 2010.

A team of lawyers representing Native American tribes and the grassroots group Dakota Rural Action took the upper hand during the proceedings as they tried to have a TransCanada executive’s testimony impeached. The proceedings took on a circus-like atmosphere when TransCanada was unable to prevent lines of questioning it didn’t like.

The commissioners seemed unsure of its own procedures. At one point, Commissioner Gary Hanson expressed frustration that he was having trouble drawing a distinction between TransCanada’s evidence and its advertising statements.

The testimony of TransCanada’s key witness, Corey Goulet, president of Keystone Pipeline Projects, turned out to be an important centerpiece of the hearing.

In pretrial testimony filed by Goulet, he stated the company would have no problem meeting the Commission’s amended conditions.

However, TransCanada’s promises to build safe pipelines have been called into question with several high-profile incidents involving its existing pipelines, particularly the corrosion problems with the Keystone 1 pipeline.

A TransCanada ‘root cause analysis’ document, made available online by DeSmog on Tuesday, shed troubling light on the external corrosion encountered on the Keystone 1.

‘ROOT CAUSE ANALYSIS’ DOCUMENT CREATES HEADACHES, QUESTIONS FOR TRANSCANADA

When Goulet was questioned about the significant corrosion discovered on the Keystone 1 pipeline in Missouri in 2012 — when the pipeline’s wall had corroded in one spot to the thickness of a dime — he downplayed the incident, claiming that none of the defects were close to rupturing.

…click on the above link to read the rest of the article…

Forget About Keystone XL – Canadian Crude Is Coming

March 20, 2015

Forget About Keystone XL – Canadian Crude Is Coming

While Congress and the White House continue to wrangle over the Keystone XL pipeline extension, the oil industry is taking matters into its own hands.

Markets are primed for an influx of Canadian crude oil, but with pipeline transport off the table for the foreseeable future, producers have built alternative modes to meet the demand. The problem is, recent disasters have soured legislators and environmentalists on road and rail for moving oil.

Alongside political uncertainties are other wild cards like extreme weather and the unknowns that arise from an emerging logistics infrastructure, which can all impact the flow of goods. That makes the proposition of a non-pipeline solution particularly thorny. How should supply chain decision makers position to connect with premium energy markets, manage the attendant risks, while also addressing the strong likelihood of an increased regulatory burden?

From the source of the commodity to the end consumer, the ability to track Canadian oil assets in real-time is set to become more important than ever.

Boom Times For Oil Producers

Production from Canada’s oil sands is on the rise, with output expected to nearly double by 2030 to 6.7 million barrels per day. That accounts for about 98% of the country’s oil reserves.

…click on the above link to read the rest of the article…

Canadian oil extraction is ‘extraordinarily dirty’ process, Obama says

March 7, 2015

Canadian oil extraction is ‘extraordinarily dirty’ process, Obama says

Keystone XL pipeline vetoed by president in February

U.S. President Barack Obama has some less-than-laudatory words for Canada’s oil industry in a new example of his increasingly critical take on the oilsands.

He was asked about the Keystone XL pipeline during a town-hall session Friday — and he launched into an explanation of why so many environmentalists oppose it.

“The way that you get oil out in Canada is an extraordinarily dirty way of extracting oil,” Obama said during the event at a South Carolina college.

“Obviously,” he added, “there are always risks in piping a lot of oil through Nebraska farmland and other parts of the country.”

Obama has recently taken to dismissing the Keystone XL pipeline, playing down its benefit for the American economy. But his remarks Friday at Benedict College were notable in that they were aimed at the industry itself.

Keystone veto

It came during a question-and-answer session where a student saluted him for vetoing a bill to build the pipeline: “Thank you. Thank you. Thank you,” said the questioner. “You are what we hoped for.”

Obama replied that his decision to veto the bill wasn’t the last word on the matter. He said he hasn’t made a final decision. But then he proceeded to launch into a statement on climate change.

…click on the above link to read the rest of the article…

Tomgram: Michael Schwartz, Israel, Gaza, and Energy Wars in the Middle East

February 27, 2015

Tomgram: Michael Schwartz, Israel, Gaza, and Energy Wars in the Middle East

Talk of an oil glut and a potential further price drop seems to be growing. The cost of a barrel of crude now sits at just under $60, only a little more than half what it was at its most recent peak in June 2014. Meanwhile, under a barrel of woes, economies like China’s have slowed and in the process demand for oil has sagged globally. And yet, despite the cancellation of some future plans for exploration and drilling for extreme (and so extremely expensive) forms of fossil fuels, startling numbers of barrels of crude are still pouring onto troubled waters. For this, a thanks should go to the prodigious efforts of “Saudi America” (all that energetic hydraulic fracking, among other things), while the actual Saudis, the original ones, are stillpumping away. We could, in other words, have arrived not at “peak oil” but at “peak oil demand” for at least a significant period of time to come. At Bloomberg View, columnist A. Gary Shilling has even suggested that the price of crude could ultimately simply collapse under the weight of all that production and a global economic slowdown, settling in at $10-$20 a barrel (a level last seen in the 1990s).

And here’s the saddest part of this story: no matter what happens, the great game over energy and the resource conflicts and wars that go with it show little sign of slowing down. One thing is guaranteed: no matter how low the price falls, the scramble for sources of oil and the demand for yet more of them won’t stop. Even in this country, as the price of oil has dropped, the pushfor the construction of the Keystone XL pipeline to bring expensive-to-extract and especially carbon-dirty Canadian “tar sands” to market on the U.S. Gulf Coast has only grown more fervent, while the Obama administration has just opened the country’s southern Atlantic coastal waters to future exploration and drilling. In the oil heartlands of the planet, Iraq and Kurdistan typically continue to fight over who will get the (reduced) revenues from the oil fields around the city of Kirkuk to stanch various financial crises. In the meantime, other oil disputes only heat up.

…click on the above link to read the rest of the article…

Why the GOP’s Vision of North America’s Energy Future Should Scare All of Us

February 13, 2015

Why the GOP’s Vision of North America’s Energy Future Should Scare All of Us

It will be a nightmare of environmental degradation and global conflict.

It’s a ritual long familiar to observers of American politics: presidential hopefuls with limited international experience travel to foreign lands and deliver speeches designed to showcase their grasp of foreign affairs. Typically, such escapades involve trips to major European capitals or active war zones like Iraq and Afghanistan. New Jersey Governor Chris Christie, however, has broken this mold. Before his recent jaunt to London and into the thickets of American vaccination politics, he chose two surprising destinations for his first trips abroad as a potential Republican candidate. No, not Kabul or Baghdad or even Paris, but Mexico City and Alberta, Canada. And rather than launch into discussions of immigration, terrorism, or the other usual Republican foreign policy topics, he focused on his own top priority: integrating Canada and Mexico into a U.S.-led “North American energy renaissance.”

By accelerating the exploitation of fossil fuels across the continent, reducing governmental oversight of drilling operations in all three countries, and building more cross-border pipelines like the Keystone XL, Christie explained, all three countries would be guaranteed dramatic economic growth. “In North America, we have resources waiting to be tapped,” he assured business leaders in Mexico City. “What is required is the vision to maximize our growth, the political will to unlock our potential, and the understanding that working together on strategic priorities… is the path to a better life.”

…click on the above link to read the rest of the article…

Flashpoint Issue 2015: Keystone XL Tar Sands Pipeline | Environment News Service

December 29, 2014

Flashpoint Issue 2015: Keystone XL Tar Sands Pipeline | Environment News Service.

WASHINGTON, DC, December 29, 2014 (ENS) – A renewed battle over the Keystone XL tar sands pipeline is shaping up for the new year in North America.

The Republicans, who favor the Alberta-Gulf Coast pipeline because of the jobs and energy security they say it will create, will have a majority in both houses of Congress for the first time since TransCanada Corp. filed an application for the pipeline six years ago.

They plan to bring up legislation early in January to force President Barack Obama to sign the required Presidential Permit for the pipeline that declares it to be in the national interest. The Permit is needed because Keystone XL would cross an international border.

The proposed 1,179-mile (1,897 km), 36-inch-diameter pipeline would carry diluted bitumen from Hardisty, Alberta, and extend south to Steele City, Nebraska, where it would join existing pipelines to carry the dilbit to refineries on the Gulf of Mexico. The refined product is planned largely for export.

Obama says he is waiting for a lawsuit over the pipeline route in Nebraska to be settled, but has signaled that he views Keystone XL as a threat to international efforts to limit climate change.

…click on the above link to read the rest of the article…

Keystone XL Pipeline’s Economic Argument May Expire: Experts

December 16, 2014

Keystone XL Pipeline’s Economic Argument May Expire: Experts.

The juncture of falling oil prices colliding with TransCanada’s push for its US$8-billion Keystone XL pipeline may undermine the argument that the project makes economic sense, according to analysts.

Canadian oil prices hit a five-year low on Monday, dropping to US$40 a barrel.Benchmark brent oil also hit its lowest since July 2009, slipping from 65 cents to $61.20 per barrel.

Sandy Fielden, RBN Energy’s director of energy analytics, told the L.A. Times the impact of falling prices may rattle support for Keystone XL.

“The economics of this project are becoming increasingly borderline,” she said. But TransCanada isn’t showing any signs it’s fazed by the dropping prices.

Spokesperson Mark Cooper told the publication that its oil-shipper investors “have a good understanding of what the market needs over time. They do not make decisions based on short-term views or changes in commodity prices.”

…click on the above link to read the rest of the article…

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‘ROOT CAUSE ANALYSIS’ DOCUMENT CREATES HEADACHES, QUESTIONS FOR TRANSCANADA

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