Archive for the ‘Tar Sands’ Category

by jhwygirl

Don Brown in a landowner near Fort Peck who will be directly affected by the proposed KeystoneXL pipeline. He’s been a vocal opponent to the Keystone XL pipeline since early on. He’s criticized Max Baucus’s attempts at circumventing legal process for the pipeline, and more recently, he signed a letter to Secretary of State Hillary Clinton and President Obama that included signature of affected landowners in 5 states.

Keystone XL pipeline will utilized eminent domain to obtain the land this Canadian company needs to transport its Athabasca tar sand oil from Canada across the State of Montana and down to Texas.

This weekend Don Brown asks Montanans whether this pipeline is in our national interests. I ask whether it is in Montana’s:

Secretary of State Hilary Clinton and President Barack Obama have a decision to make soon — whether TransCanada’s Keystone XL pipeline is in the “national interest.”
As a landowner along the route who has much to lose when this pipeline comes through, I hope that our decision-makers are absolutely clear about whether this pipeline is in the national interest when it is permitted, but I think there are questions that still haven’t been answered.
Since TransCanada is a foreign corporation, is this pipeline in the national interest? Since this pipeline goes to a port on the Gulf Coast, and they already have a pipeline going to a refinery in Illinois (Keystone I pipeline), that would lead me to believe they plan on exporting the product carried on the Keystone XL. Is that in the national interest? And tar sands, which Keystone XL is going to be carrying, are especially corrosive, and the Keystone I pipeline has already had 14 leaks in about a year of operation — is that in our national Interest?
Should we just be the nation where the pipe crosses, potentially with leaks, en route from one foreign country to another? Is that in our national interest?

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BCFS

Just ignore anything thing that comes out of a politician’s mouth when discussing oil prices, whether that politician may be President Obama or Denny “I do believe I fell off my horse” Rehberg.  For that matter you can also ignore Faux News’ claim that financial speculation is the key culprit of high oil prices because the reality is that the main driver behind oil prices is a lack of sufficient supply.

The Oil Drum has a great analysis (which continues in the comments) up at their site that comes to this very conclusion.  It’s a long, and a very technical post, but well worth the read.

The basic problem the world is facing in the short-term is that the great oil exporters aren’t so great anymore.  You see, the major exporters have been massively developing their countries over the last 20 years trying to diversify their economies away from a dependence on oil exports.  This has strangely had the reverse effect of making their economies more reliant on oil.

In 2005 total world exports were 40.8 million barrels per day (mbpd) as compared with 35.7 mbpd in 2009, a  12.5% decline in only a matter of 4 years.  While data might not be available for 2010, the news only gets worse.  Both Russia and China have instituted export restrictions so as to support their domestic economies.  This will lead to a further reduction in total oil exports.  The news out of Russia, being the world’s second largest oil producer, does not bode well for the oil importing countries of the world.  Add in the fact that Saudi Arabian oil production peaked in 2005 and Russia peaked in 2007.  No country can replace these two producers and so the decline in world exports will continue and with it prices at the gas station here in America will continue to rise.

Two additional variables complicate the situation.  The first is political.  Already the Arab Spring is effecting oil exports coming out of the Middle East.  But on-top of the unrest directly leading to reductions in oil production regimes that are desperate to hold on to their power are already starting to spend oil revenue on social programs with the aim to buy the silence of their populace.  That leaves less money to invest in future oil production and will lead to an otherwise faster decline in production.

The second, is the economic principle of diminishing returns on investment.  This is an economic fact that was drilled into my head in economics class.  Usually, this principle is couched in the terms of labor vs. capital.  Each additional laborer produces a certain amount of profit, add too many workers and that rate of return decrease and will eventually go negative.  Same with capital.

Energy markets are subject to the same principle but in a slightly different manner.  The principle here is “energy returned on energy invested” (EROEI).  Back in the day when oil was first discovered, the EROEI was in the range of 30-50, meaning for every unit of energy expended in production, 30-50 units of energy were actually produced.  Now however, we are down to the point of extracting oil at an EROEI under 10, with tar sands right about 5.  So we are reaching the point of having to expend a lot more energy and money to get just a little bit of energy in return.

Now, You can take this principle and expand it a bit further.  Lets take for example infrastructure investment, in this case our national highway network.  Because this type of investment is public, the return on investment would be the total economic activity spurred by said investment, ranging from the construction jobs created directly from the investment to the development of real estate on former farmland and the sale of cars that fill up said highways.

Between 2004 and 2008 23,300 miles of additional roadway were built in America.  Now the first 23,300 miles that were built in the system way back under Truman contributed much more to the economic prosperity of our country than the last 23,300 miles.  Why is that?  It’s because of all that previous investment.  Not only is that last 23,300 miles a marginal amount at this point compared with all that previous investment,  but all those thousands of miles already built require a lot of investment each and every year just to maintain.  All the maintenance required to keep up that old investment takes away from the ability of a nation to invest in new infrastructure.

This same phenomenon is occurring in places like Saudi Arabia.  Once you’ve gotten to all the easy oil, you have to spend an increasing amount of money just to tread water.  From The Oil Drum:  Saudi Arabian oil officials met with Halliburton to discuss plans to boost their oil-directed rig count by roughly 30%.

According to a Saudi oil official interviewed by Reuters, the investment in new drilling rigs “is not to expand capacity. It’s to sustain current capacity on new fields and old fields that have been bottled up.” (1) This news on its own should be troubling as it infers that the Kingdom is facing significant declines on currently producing fields. Even more troubling is the recent statement by another senior Saudi oil official that the Kingdom “expects oil production to hold steady at an average of 8.7 million barrels per day to 2015.”

Increasing investment by 30% just to stay barely above water.

Drill-Baby-Drill!

by jhwygirl

25 American mayors around the U.S. signed a letter off to Secretary of State Hillary Clinton outlining their concerns over the controversial Keystone XL pipeline, which would transport Canadian Tar Sands oil.

I’m pretty sure our council has a resolution out regarding the transport of the big rigs for the nasty dirty Tar Sands…and I’m pretty sure it does, in part, refer to the overall impacts of the extraction. Seems Missoula should be continuing to represent its opinion in these matters.

In other news, the state department recently announced that it would be doing a supplemental EIS on the pipeline.

Let’s hope Missoula provides official public input.

One fact they’ll have to look at?

The firms involved have asked the U.S. State Department to approve this project, even as they’ve told Canadian government officials how the pipeline can be used to add at least $4 billion to the U.S. fuel bill.

U.S. farmers, who spent $12.4 billion on fuel in 2009, according to the U.S. Department of Agriculture, could see expenses rise to $15 billion or higher in 2012 or 2013 if the pipeline goes through.

At least $500 million of the added expense would come from the Canadian market manipulation.”>

Let’s hope our Senator Jon Tester is looking out for Montana’s agricultural community on this one – and saying “NO” to this pipeline.

By JC

Well, it was just a matter of time until our Governor’s hollow words took a turn to the right. In a little noticed story tucked back inside the B Section of last Sunday’s Missoulian, we find out that Exxon–the world’s richest corporation–is protesting nearly a million dollars in taxes in the small Montana town of Lockwood. The protest amounts to 44% of the town’s tax base, and will cost 18 jobs:

Leaders in Lockwood met with ExxonMobil executives and representatives from the Montana Department of Revenue on Thursday to discuss Exxon’s decision and the ramifications it could have for the school district.

“What we will do we don’t know at this point,” said Eileen Johnson, superintendent of the Lockwood School District.

District officials first heard the news from Exxon officials when they met on Thursday. Exxon sent five officials to the meeting, including two of its tax experts from Houston.

Those officials traveled to Helena on Friday to meet with state leaders. A call to Exxon’s Lockwood office Friday was not returned.

“Meet with state leaders…” Hmm, I wonder just what the governor or his underlings are telling Exxon? “C’mon on in, the door’s open, we need your ‘jobs, jobs, jobs.'” I wonder what the next public proclamations from Schweitzer will be about this situation? Push harder for the project because we need even more jobs now? Maybe Exxon is pushing for a little bit of quid pro quo? Pay to play? Extortion…??? So many questions, and so few answers.

I know many of our commenters here think that Exxon and the Canadian oil cartel are such fine upstanding corporate citizens, what with they provide us all the tar for our hippy bike paths. But when the world’s richest corporation has the ability to throw small communities in our state into total disarray and turmoil by simply protesting its taxes, well then, they are no friend to our state and should be dealt with accordingly.

And in related news:
tar sands resistance

International Tar Sands Resistance Summit, Nov 19-22 at Lubrecht

The Indigenous Environmental Network and Northern Rockies Rising Tide are pleased to announce the “International Tar Sands Resistance Summit,” which will take place November 19-22 at the Lubrecht Experimental Forest conference center, 30 miles east of Missoula, Montana, USA. The summit is designed to be a place where individuals representing tar sands-impacted communities can come together to strategize, learn skills and network in order to grow and strengthen the international effort to effectively resist the most destructive industrial project on the planet, the Alberta tar sands. The four-day convergence will focus primarily on connecting individuals and communities affected by the Alberta Tar Sands, the XL Energy Pipeline, and the proposed mega-load shipments. This event is free and open to the public, but due to limited space we will have to cap the number of attendees. Feel free to register online , but please be sure to read the information provided on the form.




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