Posts Tagged ‘oil’
Book Review “The Patch”
The People, Pipelines, and Politics of the Oil Sands
by Chris Turner
Simon & Schuster Canada
published September 19, 2017
I requested a review copy of this book ahead of publication from NetGalley. That means I got a document – as opposed to an ebook – which was not in its final format, and is awkward to quote from. That also means some of the information and hard data was missing. And I did notice that several passages seem to be repeated: for instance, the anecdote about the Fort McMurray WalMart being too busy to stack the shelves – and too short of staff – that goods were simply left on pallets in the aisles. In fact a lot of the book is composed of stories and anecdotes, most of them engagingly told. I found it easy to get absorbed and stay engaged – so it would be a good choice if you have a long flight.
The publisher’s blurb is clear
“The Patch is the story of Fort McMurray and the oilsands in northern Alberta, the world’s second largest proven reserve of oil. But this is no conventional story about the oil business. Rather, it is a portrait of the lifecycle of the Patch, showing just how deeply it continues to impact the lives of everyone around the world.”
So it is not a polemic. Even though the author ran as a candidate for the Green Party, he does his best to remain even handed. Though my feeling was that perhaps he tries a bit harder to defend the “ordinary people” who work in the Patch, and clearly feels that they have not necessarily been treated well by the media or the opponents of fossil fuels. There is very little about the people who are actually responsible for the current direction of development. The Koch Brothers get a passing mention, as does Warren Buffet, but by and large the main characters are the people who deal with the actual work or are directly impacted by it. One of the leading characters is a bus driver, for instance. Another belongs to a local First Nation, who tries to combine working in the patch with a some maintenance of the traditional hunting for food.
Politicians do get get quite a bit of attention, as do some of the people who made the initial discoveries and technical advances. But financial and boardroom battles are generally treated lightly. This is not investigative journalism or muck raking, but it is frank about some of the rather cavalier attitudes towards issues like clean air, clean water and climate change. He is actually tougher on the environmentalists, who are given somewhat harsher coverage, I think. He is no fan of Bill McKibben, for example. He is quite clear that the Patch got chosen to be the poster child for climate change responsibility when in fact he feels we all share equally the responsibility for the daily choices that make the burning of fossil fuels inevitable.
It is also quite clear that Canadian politicians made the key decisions that created the present situation. The extraction of usable fuel from the tar sands was always a very dodgy proposition – technically and financially. It was never really an easy choice to make given that there were at most times other sources of usable petroleum easier and cheaper to extract and market: but mostly in other places. The oil industry – and the politicians – both wanted to be able to secure supplies closer to their markets, and under the control of governments that would be if not always friendly at least understanding and amenable. Dealing with regimes in places like the Middle East and West Africa is not an easy way to make a fortune.
On many occasions the companies engaged in developing the Athabasca tar sands had to review falling prices, rising costs and seemingly endless production problems. The book deals with these in a breezy, informative way without too much jargon or technical bafflegab. Many times it must have looked like it was a losing proposition that had already cost a fortune, looked unlikely to be profitable even in the long term and was not going to be simple to remedy. Huge sums have been invested, and still need to be spent, to make the process of extraction and processing possible if not exactly viable. What has always made the critical difference has been politicians willing to commit public funds where skeptical commercial decision makers saw huge risks and doubtful rewards. As we have seen in BC with LNG recently, this is not an unusual position for Canadian politicians to take. And it is not confined to energy either: there are always people only to ready to detect possible boondoggles where public funds are being used for major capital projects. Indeed, I think that kind of mindset may be one of the things behind the popularity of public/private partnerships. As we have seen only too clearly, too often the private sector has been the major beneficiary of unwillingness to go for the conventional public sector route.
The key decision in the book is the one made by Jean Chretien in the mid 1990s to provide tax breaks to rescue the industry, in particular the two major oil sands producers, Suncor and Syncrude Canada Ltd. He also persuaded Ontario to join with Alberta and the federal government in making capital investments when one of the original investors dropped out. Indeed one of the recurring themes is how often the uncertainties of the extraction process and a drop in oil prices almost stopped development, but how local and national politicians remained committed to seeing the development of the industry – both for the jobs and the revenue streams it promised.
There is a widespread misconception that oil and gas dominates the Canadian economy. In fact it is (with mining) around 8% of GDP and less than 15% of exports. Neither figure appears anywhere in this book. Indeed, much of the time, the usual story of how dependent we are on fossil fuels – and especially oil – is emphasized. There is no mention of the possibility that this is in the process of changing – and changing rapidly – thanks to the improving technology and falling cost of renewables like solar and wind power. Nor the rapidly increasing sales of electric vehicles for both private and commercial uses, and the decline of car ownership and use in urban areas threatening the dominance of oil for transportation energy.
I was quite taken aback by the number of times some phrases and dates recurred in the text. “On any given day” and “2015” were frequently cited. That’s because most of the story is set in Fort McMurray – and everything changed there, very dramatically, with the fire in 2016. That, of course, gets its own chapter.
When I was reading the book the news was full of hurricanes – Irma was demolishing Barbuda and threatening havoc in Cuba and Florida. We were enjoying – at long last – a refreshing break from a summer of heat and smoke from wildfires. Climate change does get attention – but somehow more with the connotation that it is the obsession of a minority rather than the concern of everyone – which of course is quite understandable when written from a North American perspective and where the most recent official policy in Canada and Alberta is that the oil patch is considered an essential component of an orderly and economically viable transition to renewables, in due course, in the fullness of time, with due regard to the realities yadda, yadda.
Again there is no mention that the horizon for taking effective action to limit climate change to a point where human life is even possible is getting much closer – three years is the most recent estimate . This is not a matter where we can give both sides equivalence. Yes, there will still be motor vehicles and they will still need liquid fuels. The probability that we can change fast enough to avoid 2ºC of global warming – and all the tipping points that get triggered along the way – is by no means assured. And the consequences of failing to slow the current rapid increase of fossil fuel consumption are going to be dire.
It does not comfort me at all that the key decisions are going to be made by the current generation of politicians, and I do notice that Canada has not only fallen far behind the leaders in dealing with climate change but shows no sign at all of tackling the problem with the urgency it demands. So the conclusions of this book that we will have to put up with political necessity and unsatisfactory compromises is both true and truly depressing.
That doesn’t mean I don’t recommend this book as a worthwhile use of your time. But do not expect to get anything more from it than the idea that somehow we will muddle through. Frankly, I do not think that is Good Enough this time. I think we need a more trenchant critique of Trudeau and Notley – and a more hopeful look at some of the alternatives. And actually in areas like wind power Alberta is actually far ahead of BC. Not that that is saying much either.
There Will Be Spills
My opposition to the TransMountain Pipeline expansion is that it will be redundant sooner rather than later. But if course that is not taken into account by any regulatory process. The pipeline has been approved and the new BC government seems to rewinding its pre-election promise to stop it. It will not just feed the export terminal in Burnaby, it will also feed the oil refineries in Washington state. It is also very unlikely that much of dilbit will be exported to Asia: most of it will go to the US refineries that can cope with heavy crudes. This will inevitably lead to the extirpation of the resident orca population in the Salish Sea already suffering due to the lack of salmon that they depend on. The rest of this post is taken from a Greenpeace press release. Once again I doubt that the corporate media will do anything but soft shoe shuffle around this issue and perhaps bleat again about jobs (just as they did with LNG) even though the employment prospects for renewables are far better than fossil fuels.
New report reveals one spill a week in US from three tar sands pipeline companies
3 August 2017 (EDMONTON) — A map and policy brief released today by Greenpeace detail a legacy of spills — roughly one every week in the United States since 2010 — from three companies proposing to build four tar sands pipelines. The map plots the location and size of 373 spills from pipelines owned by Kinder Morgan, Enbridge, TransCanada and their subsidiaries, totaling 63,221 barrels of hazardous liquids in just seven years.
These “Dirty Three” of pipeline companies, two of which are Canadian, are at varying stages of building four controversial oil pipelines from Alberta’s tar sands across North America. Data in the map and brief covers spills in the United States, where TransCanada is attempting to re-ignite the Keystone XL pipeline and Enbridge is in the late stages of permitting for its Line 3 Expansion pipeline, which would travel over 1,000 miles, crossing North Dakota and Minnesota to its destination on Lake Superior in Wisconsin. Kinder Morgan hopes to begin construction on the Trans Mountain Expansion pipeline in British Columbia this fall, while TransCanada has restarted the approval process for its Energy East pipeline, which would pass through six provinces.
Key findings in the brief include:
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Despite industry claims, pipeline spills have remained a steady problem, with significant spills of crude oil and petroleum products increasing over the last several years across many states along the three companies’ pipeline networks. The companies’ 373 spills since 2010 account for a total of 63,221 barrels of hazardous liquids, the largest being Enbridge’s 20,082 barrels of tar sands oil spilled into the Kalamazoo River.
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Extrapolating from current rates of incidents, Kinder Morgan can expect 36 significant spills (see Note 2 below), Keystone XL can expect 59 significant spills in its lifetime and Line 3 Expansion can expect 51.
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Along with being far more carbon-intensive than conventional crude, diluted bitumen has been shown to be much harder to clean up when spilled in water. Both Line 3 Expansion and Keystone XL make multiple water crossings and run near key watersheds and wetland habitats.
“This data exposes these tar sands pipeline companies’ worrying safety records. There’s good reason for concern among Indigenous Peoples and communities living along these companies’ pipeline routes on both sides of the border — it’s their lands and waters that would be directly contaminated by an oil spill. With these three companies and their subsidiaries creating one spill a week in the US, it’s not a question of ‘if’ there will be a spill, but ‘when and how big’ that spill will be,” said Mike Hudema, a climate and energy campaigner with Greenpeace Canada.
Financial support for these pipelines is being provided by banks including TD, RBC, CIBC and JPMorgan Chase. Credit union association Desjardins has also provided financial support, but recently announced a moratorium on oil pipeline financing and investments in response to concerns about the threats pipelines pose to the environment and Indigenous rights. Greenpeace Canada and Greenpeace USA are part of an international coalition of civil society and Indigenous organizations campaigning to urge financial institutions to pull their investments in tar sands pipelines given the high financial, reputational and environmental risks they pose.
(1) In Canada, pipeline spill reporting falls under a combination of federal and provincial jurisdictions, leaving Canadians without a central, up-to-date set of data due to discrepancies in the transparency, quality and user-friendliness across jurisdictions. One of the most comprehensive spill databases in Canada was actually compiled by Global Television, which showed that Alberta (the epicentre of tar sands production) averaged 2 spills a day for the 37 years covered by the dataset. [Note that the map linked to in this paragraph only covers Alberta.]
(2) PHMSA data for crude oil pipelines shows 0.001 significant incidents per year per mile, so assuming the U.S. rate for Kinder Morgan’s Trans Mountain Expansion pipeline, we would expect to see 0.001 sig spills/yr/mi x 715mi x 50yr = 36 significant spills in a 50 year lifetime.
“It’s our environment and our economy”
A guest post by Andy Shadrack
If Alberta Premier Rachel Notley and Prime Minister Trudeau think that they can dictate to British Columbians on the basis of whose economy and environment is more important, then they need to think again.
We have an important sport and commercial salmon fishery, and a coastline that is the envy of every tourism operator in the country. And yet Ms Notley and Mr Trudeau think we should sacrifice our economic interests for theirs.
First, no amount of money could fix a crude oil spill. Just ask the Alaskan fishermen and First Nations people impacted by the Exxon Valdez spill. So we are not talking about exporting twinkies, lumber, natural gas or even coal. We are talking about a substance that could severely damage or destroy our marine ecosystem.
BC has only one marine ecosystem and no amount of money could help rebuild it. Question: why are Alberta and Ottawa not supporting refining tar sands crude where it is being mined?
That way we could all benefit from purchasing Canadian refined oil products and end the importation of foreign oil. The answer I keep getting is that it is too expensive and not a viable economic solution.
Well, guess what, exporting crude oil through BC’s fragile marine ecosystem is not a viable economic alternative either. Nor do we want to be held hostage to Alberta’s economic needs.
We in BC have as much right to protect our environment and economy as Albertans. So, Ms Notley, a little less of “it’s our right” and “the federal government has made adecision”, as Mr Trudeau also promised us that the impacts of resource extraction would be balanced against the needs of protecting the environment.
It’s our environment and our economy that’s at stake here, so please start by respecting us and that fact. After that, we can negotiate as equal partners in confederation and not from some subservient position of just because you mined it, you have a right to export it.
Andy is someone I met when I joined the Green Party of BC. He posted this on his facebook page today. I decided to copy and paste it here.
Divestment
The Guardian is currently running a campaign to try to get the Bill Gates and Wellcome Foundations to divest from fossil fuels. This is running concurrently with other campaigns to try to get institutions to divest including Harvard University. Yesterday the Guardian’s campaign included a tweetstorm, and I got an email from Alan Rusbridger suggesting I write to one of the directors of the Wellcome Trust to explain why I thought divestment is a Good Idea. In fact this idea came from the people who had signed up to the Guardian’s petition who thought that individual letters might be more persuasive than just signatures.
The Guardian is, of course, owned by a Trust, which is why it can be independent. And they have already divested. As have I. Here is some of what I wrote to the Chair of the Wellcome Trust.
As a former non-executive member of the board of BP, I sure you recall when that organisation called itself “Beyond Petroleum”. I wonder if you share the great disappointment many of us felt when that approach was abandoned. In retirement, I have an investment portfolio, managed by professional brokers and owned by one of the big Canadian banks. I have been talking to them about the importance of divestment from fossil fuels. I was particularly concerned that my fund manager seemed completely unaware of the investment opportunities in renewable technologies such as wind and solar power generation. I have also been very much aware that many of the companies my funds were invested in were supporting climate change denial and through the activities of people like the Koch brothers, who are heavily invested in the Alberta tar sands, actively working to frustrate changes to cleaner technologies. I have divested my funds from pipelines and fossil fuel power generation companies and instructed my brokers to buy stock in cleaner energy companies. I think that this has had the useful effect of changing my broker’s range of reading materials, and not focussing so closely on short term market fluctuations.
In Vancouver we are currently fighting against expansions of port facilities to allow for more export of diluted bitumen. Our provincial government is encouraging the expansion of LNG exports by reducing taxes and royalties in an attempt to make financially dubious investments look more attractive. A recent fuel oil spill in the harbour here has concentrated attention on how ill equipped we would be to deal with a dilbit spill on our coast, especially in view on ongoing cut backs by the Canadian government in our Coast Guard. I am sure your experience of the impact of the Deepwater Horizon disaster must make you concerned too about the threat that increased oil exploration and exploitation poses to all life on earth.
I am sure by now you will have read the following paragraph many times. Please take the time to read it again.
“Your organisations have made a huge contribution to human progress and equality by supporting scientific research and development projects. Yet your investments in fossil fuels are putting this progress at great risk, by undermining your long term ambitions. Climate change poses a real threat to all of us, and it is morally and financially misguided to invest in companies dedicated to finding and burning more oil, gas and coal. Many philanthropic organisations are divesting their endowments from fossil fuels. We ask you to do the same: to commit now to divesting from the top 200 fossil fuel companies within five years and to immediately freeze any new investments in those companies.”
Thank you for reading my note. I hope the Wellcome Trust will divest from fossil fuels, as so many other academic organisations are doing.
I do not expect that he will change his mind just because he reads my letter. In fact I already have had a response which you can read here. I think it probably reflects the fact that this is an organisation based in the UK, where there is not quite the same direct influence of corporate funding of politics as there is now in the United States thanks to Citizens United. I also do not believe that Shell, BP and Koch Industries (and so on) are run by “fair minded people”. Quite the contrary. I think that they are using the funds invested in their companies to defeat any serious efforts to change the current trajectory of increasing fossil fuel consumption. The possibility of there being some significant shift at the upcoming Paris conference must be alarming them as they hold huge amounts of what will become stranded assets – essentially valueless – if there is a determined move to limit fossil fuel extraction.
I hope that as a reader of this blog you too will consider what you can do to help towards reducing the use of fossil fuels – transit expansion and better land use being two of the most effective. If you are an alumnus, and you get the steady stream of begging emails that I do from your alma mata, perhaps you too can add your voice, or sign up to the Guardian’s campaign. Individually we probably will have an infinitesimal impact: but collectively it will be a mighty roar, that will be hard to ignore. I hope so, for all our sakes.
The Cost of Energy
The recent IPCC report has been very clear about the need to get out of fossil fuels. They are also realistic in predicting that it is going to take a while to turn things around. What surprises me is the continued reluctance of the elite to absorb the message – but maybe there is an easier way to get across to them.
There has already been a significant change in energy markets, not just because the price of renewables (solar, wind and so on) has been dropping rapidly. The rush into fracking for oil and gas in North America has depressed oil prices.
Now it may be argued that this is merely short term volatility and that OPEC could cut back its output to prop up prices. But equally, OPEC may be getting concerned about losing market share and needing to protect its revenue stream. Sales at lower prices being better than no sales at all.
I have already been arguing in other fora – such as twitter and facebook – that the dropping oil price ought to be a much bigger consideration for opponents of increasing fossil fuel dependence. The current crop of LNG projects in BC seem to me to be the most obvious candidates. British Gas has already pulled out of Prince Rupert: can Squamish be far behind? The provincial government has already dropped its revenue estimates, even though it was already willing to pretty much give away the resources through low royalties, it has recently cut the tax regime too. I do not understand why they continue to pursue projects which offer very little in terms of employment (relative to other energy opportunities) and now little revenue, especially in the near term. “British Columbia’s auditor general says doing business with the oil-and-gas industry has cost the province’s coffers about $1.25 billion in royalties even before most of the product has been pulled from the ground.” Vancouver Sun
But the pipeline projects that are essential to expanding the tar sands and getting diluted bitumen to oil refineries also seem to be not only deservedly unpopular, but increasingly unnecessary. The tar sands are already heavily subsidized, but even so “ninety percent of future oil sands projects at risk from eroding oil price” according to a new report from Carbon Tracker.
I have long argued that the only thing to do with difficult to extract fossil fuels is to leave them in the ground. For one thing it is now clear that we have more than enough geothermal energy resources available to meet all our needs. While not strictly speaking “renewable” it is not likely that the earth’s core is going to cool down rapidly if we exploit these resources anymore than putting up solar panels to capture sunlight risks dimming the sun. The good thing about geothermal is its constant availability which makes it really useful to provide power when sunlight and winds are not available.
The problematic thing is that transportation, especially in North America, is still heavily dependant on energy dense liquid fuel. Even though batteries are getting better, and energy efficiency improvements such as hybrids are helping reduce demand for gasoline, much more attention is being directed – quite properly – to the fall in car use. I think that is much more to do with the falling buying power of consumers than secular change in transport demand. The grab of the 1% has gone much too far, and the economic impacts of the impoverishment of the rest of the population are now becoming more apparent. So far the knock on effects into social unrest have been relatively weak, but that cannot continue indefinitely, absent a change in policy direction from most national governments. Obviously austerity is not working and cannot work. The changes in mode to walking and cycling can be achieved in some urban areas, but in most suburbs significant shifts in land use are needed to put origins and destinations in better proximity. That is going to take some time to achieve.
Rail versus pipeline is the wrong question
The following article arrived in my in box this morning from David Suzuki . I am copying it in its entirety since it expresses exactly what I would write.
I have not used the image that accompanied the text since it does not actually depict the dangerous DOT111 cars that are one of the causes of the present problems. DSF chose a picture from flickr (good) that comes from Europe, where they use a quite different car (oops!). The picture below is from one of my flickr contacts in Quebec and shows “a loaded tank car on CN 710, stopped for a crew change at Turcot West in Montreal. Train is destined for Ultramar refinery at St-Romuald, QC (near Quebec City)”.
DOT111 rail car with crude oil placard
© Photo by Michael Berry on flickr – used with permission
Debating the best way to do something we shouldn’t be doing in the first place is a sure way to end up in the wrong place. That’s what’s happening with the “rail versus pipeline” discussion. Some say recent rail accidents mean we should build more pipelines to transport fossil fuels. Others argue that leaks, high construction costs, opposition and red tape surrounding pipelines are arguments in favour of using trains.
But the recent spate of rail accidents and pipeline leaks and spills doesn’t provide arguments for one or the other; instead, it indicates that rapidly increasing oil and gas development and shipping ever greater amounts, by any method, will mean more accidents, spills, environmental damage – even death. The answer is to step back from this reckless plunder and consider ways to reduce our fossil fuel use.
If we were to slow down oil sands development, encourage conservation and invest in clean energy technology, we could save money, ecosystems and lives – and we’d still have valuable fossil fuel resources long into the future, perhaps until we’ve figured out ways to use them that aren’t so wasteful. We wouldn’t need to build more pipelines just to sell oil and gas as quickly as possible, mostly to foreign markets. We wouldn’t have to send so many unsafe rail tankers through wilderness areas and places people live.
We may forgo some of the short-term jobs and economic opportunities the fossil fuel industry provides, but surely we can find better ways to keep people employed and the economy humming. Gambling, selling guns and drugs and encouraging people to smoke all create jobs and economic benefits, too – but we rightly try to limit those activities when the harms outweigh the benefits.
Both transportation methods come with significant risks. Shipping by rail leads to more accidents and spills, but pipeline leaks usually involve much larger volumes. One of the reasons we’re seeing more train accidents involving fossil fuels is the incredible boom in moving these products by rail. According to the American Association of Railroads, train shipment of crude oil in the U.S. grew from 9,500 carloads in 2008 to 234,000 in 2012 – almost 25 times as many in only four years! That’s expected to rise to 400,000 this year.
As with pipelines, risks are increased because many rail cars are older and not built to standards that would reduce the chances of leaks and explosions when accidents occur. Some in the rail industry argue it would cost too much to replace all the tank cars as quickly as is needed to move the ever-increasing volumes of oil. We must improve rail safety and pipeline infrastructure for the oil and gas that we’ll continue to ship for the foreseeable future, but we must also find ways to transport less.
The economic arguments for massive oil sands and liquefied natural gas development and expansion aren’t great to begin with – at least with the way our federal and provincial governments are going about it. Despite a boom in oil sands growth and production, “Alberta has run consecutive budget deficits since 2008 and since then has burned through $15 billion of its sustainability fund,” according to an article on the Tyee website. The Canadian Taxpayers Federation says Alberta’s debt is now $7 billion and growing by $11 million daily.
As for jobs, a 2012 report by the Canadian Centre for Policy Alternatives shows less than one per cent of Canadian workers are employed in extraction and production of oil, coal and natural gas. Pipelines and fossil fuel development are not great long-term job creators, and pale in comparison to employment generated by the renewable energy sector.
Beyond the danger to the environment and human health, the worst risk from rapid expansion of oil sands, coal mines and gas fields and the infrastructure needed to transport the fuels is the carbon emissions from burning their products – regardless of whether that happens here, in China or elsewhere. Many climate scientists and energy experts, including the International Energy Agency, agree that to have any chance of avoiding catastrophic climate change, we must leave at least two-thirds of our remaining fossil fuels in the ground.
The question isn’t about whether to use rail or pipelines. It’s about how to reduce our need for both.
By David Suzuki with contributions from David Suzuki Foundation Senior Editor Ian Hanington
Stephen Rees's blog 