Energy companies preparing for life without the Keystone XL pipeline
posted at 8:41 pm on September 5, 2013 by Erika Johnsen
The Obama administration has managed to dither and delay to a truly amazing degree on the still-pending approval of the Keystone XL pipeline, the TransCanada project that was supposed to transport upwards of 800,000 barrels of heavy crude a day from Canada, as well as oil from the North Dakota shale fields, to U.S. refineries in the Gulf Coast. Their most recent estimate kicked the relatively innocuous project’s decision date back to early 2014, and if they make even that arbitrary deadline, I’ll be shocked. As the Obama administration has attempted to downplay it, the issue has only ballooned in public notic as the eco-radical contingent looking to kill the pipeline is fighting an entirely symbolic and misguided battle against the oil-and-gas industry — but meanwhile, the oil-and-gas industry is busy actually being a productive player in society and creating wealth in the economy.
Energy companies have long since tired of watching the Obama administration pretend that they’re sincerely still debating the merits of the project, and if the eco-radicals want to crush Keystone, then fine — let them have their completely hollow victory. The WSJ reports that U.S. oil refiners are increasingly doubting that the Keystone pipeline will ever be built — and that they don’t particularly care anymore. Full steam ahead, boys:
“Keystone XL has been back-burnered for so long that any relevant parties have been able to make plans as though the project never even existed in the first place,” says Sam Margolin, an analyst at Cowen & Co. …
But refiners are moving ahead with other plans. Valero Energy Corp. had signed to receive oil from Keystone XL when the project was first announced…
But it says it no longer considers the pipeline critical to its business. The company is now expanding rail terminals at its refineries in Benicia, Calif.; St. James, La.; and Quebec to receive more crude oil shipments, including heavy Canadian crude. Part of the reason is the long wait for Keystone. “If we just sat around and waited for Washington, we’d never get anything done,” Valero spokesman Bill Day said. …
Nearly 200,000 rail cars in Canada carried crude oil or fuel during the first seven months of 2013, up 20% from the year before, according to the latest data from the American Association of Railroads.
Enbridge, TransCanada’s cross-town rival, plans to spend $2.4 billion to expand several pipelines in its Lakehead system by 2014. Such an expansion would bring 1.2 million barrels a day of crude oil from Canada and North Dakota to the Midwest…
Groups of so-called environmentalist zealots have made it their business to depict the Keystone pipeline as something novel and very dangerous, but in reality, it will be a lot like the thousands of miles of pipelines already crisscrossing the United States — and what’s more, the U.S. is shortly going to need even more pipeline and a whole lotta’ infrastructure updates to cope with the still-burgeoning oil-and-gas boom. The eco-radicals’ ostensible main objection to the project is the Canadian oil sands that the project will help transport, but Canada and energy companies have now exasperatedly told them many times that they will find a way to develop their resources with or without Keystone — and lo and behold, they are.
The Obama administration has no problem approving other oil-transporting pipelines — it’s just all the negative attention and importance placed on Keystone by the well-monied and Democratic-donating eco-lobby holding up the State Department’s decision. The pipeline is still a very worthy project, but if the Obama administration is going to fall into their usual habit of inducing uncertainty and regulatory hindrance, energy companies will gladly proceed without them.
Breaking on Hot Air