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Oil Patch(work)

On Monday, 12 May, the first comprehensive energy bill in seven years died in the US Senate. It was an amazing bill full of small energy saving provisions that had nearly universal, bipartisan backing. What killed it was an amendment that would attempt to force President Obama to make a decision on the Keystone XL Pipeline – though how effective even that would be is far from clear.

This was a moment rich in irony because this pipeline has long stood in the way of a comprehensive energy policy. Now, it has killed the most simple and obvious conservation measures. Not long ago Barataria backed the continuous delay of this pipeline because better and more inclusive ideas seemed to be bubbling up the longer it was stalled. This piece is a continuation of that one.

There is no substitute for a real energy policy, something that every developed nation except the US already has. In place of that we have a patchwork of projects here and there and very little real control over the situation to protect the environment, conservation, and even basic safety.  That has to change.

The problem facing the US is a good one to have. Just five years ago, we only produced 28% of the crude oil we consumed, and just under half came from North America. Today, 43% comes from the US and two-thirds comes from North America.

Crude Oil Chart

Overall consumption is down about 4%, from 17,915 barrels per day to 17,241. We are on a path towards sustainable energy, of which the first step is independence. Oil from our North American neighbors is very different than oil that comes from distant nations, many of which are dictatorships. That dynamic was the main reason we became the world’s policeman and have spent tremendous blood and money around the world.

The problem with bringing this oil product home essentially boils down to one thing – the mess of transporting the oil that we consume is no longer born partly by other nations and now rests entirely on our shoulders. It seems so much uglier now that we have to see it firsthand.

Below is a map of the sources of oil in the US and Canada, along with the key destination refineries. Note that refineries were typically built on the coasts, with a few exceptions, because the oil came in by tanker.

ProductionDemand

The problem becomes a bit easier to see when we see where the pipelines we have are located. There is already a lot of infrastructure north-south through the middle of the US, but no crude oil pipelines out to the coasts.

Pipelines

Keystone XL is a duplicate pipeline in many ways, except purpose. It is proposed exclusively to handle heavy tar sands sent through the pipe as “dilbit” – short for “dliuted bitumen”. By mixing in lighter oil and gases like methane it more pumpable than the solid tar pulled out of the ground – but extremely difficult to clean up when spilled.

Which brings us to how oil gets to the coasts now that the source is in the middle of the US – the 40X increase in rail transport in the last five years. There have been several high profile spills and explosions from trains, including the utter destruction of Lac Magentic, Quebec. Railroad officials insist that the crude being transported, largely from North Dakota’s Bakken field, is no more volitile than other crude. If that is truly the case the increase in horrific accidents is related to the increase in volume only – and cannot be easily regulated away. It also costs $15-20 more per barrel to ship by rail than by pipeline.

SpaceImageBakkenBeyond just the hazards of transporting oil, there is a lot of valuable gas that comes up with it. As recently as December it was reported that 36% of the gas produced in North Dakota was flared, as we can see from space. This is a terrible waste and a missed opportunity to move us even further away from an oil based economy towards a natural gas based economy – one that provides a useful gateway to renewables and further reduction in our consumption beyond the 4% decline we’ve seen in the last five years.

Several points immediately come to mind:

We need more pipelines, but not Keystone XL. The key is to move US harvested gas and oil to the coasts, not to push tar sands to the nearest available port. In exchange for building more pipelines, high standards for safety, environmental and human, need to be in place. This should include partial refining of high viscosity and high sulfur oil like the tar sands before they are transported, perhaps up to a West Texas Intermediate (WTI) standard.  Routing through neighborhoods, like the recent Los Angeles pipeline that spilled, is ridiculous.

The opportunity to move towards natural gas is simply being missed in the entire debate right now, which is a terrible loss in every way possible. The primary emphasis should be on the cleanest fuel that leads to renewable energy – and a policy that clearly moves us in that direction (though, it’s worth noting, some disagree that natural gas will do that).

The progress made towards energy independence in the last five years has been remarkable and should be considered a great success. It gives us a chance to pull back from a destructive foreign policy based on control of resources far from our own jurisdiction. But it means that the mess created by our consumption is only more obvious and we have to deal with it.

To continue the success achieved so far, we have to go beyond what the oil companies and their market can do. That will take genuine comprehensive policy on sources, transportation, and consumption of energy. The bill that died in the Senate was a great start and had universal support. That it was killed by an “object project” which oil companies want for a quick-fix to gain easy profits is utterly reprehensible. We have much more work to do to create a proper energy policy that will build on what the market has achieved.  The delay in the Keystone XL project has given oil companies time to think about the longer term, and that has been a good thing.

But let’s forget all about Keystone XL. A proper energy policy would never make that a priority. We have more important things to do.

There are a lot of links to sources – please follow them for more information.  They are mainly from select articles that are either very comprehensive or provide perspectives outside of the mainstream press, along with a few Barataria pieces to show what arguments this piece builds on.  But in the end, your contribution to this discussion is the most important – have more information to share?  We’d love to see it!  Thanks!

15 thoughts on “Oil Patch(work)

  1. I like your thinking but its not going to happen. The republicans want nothing more than “drill baby drill” and the democrats don’t want anything to happen ever.

  2. yes what the world needs is more oil being burned – not like theres any global warming about to drown everyone

    • The plan has to involve not only use of domestic energy but a replacement for fossil fuels. I think I made that very clear. The 4% reduction in the last 5 years, despite a growing population, is only a start.

  3. I totally agree that people are complaining about oil spills and problems only because we have to deal with them now. Everything is unseen when it happens elsewhere & no one cares about it at all. That is the best thing about energy independence if you ask me.

    • The more I think about it, the more I realize that this is the most important thing we can do to improve the health of the planet. If we have to confront our own mess I am sure something will be done about it.

  4. Energy independence is #1, everything else is 2nd. I can see your point that Canada doesn’t count the same as other nations so the progress is impressive. But we need to do more if we are going to make it to 100%.

    • It will be many years before we get there, but I think we need that as a goal. It will take conservation, development of alternatives, and yes, some drilling. I’m game for it.

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