Pipeline has economic advantages

By Quentin Wagenfield

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At first glance, it's hard to imagine anyone opposed to the Keystone XL Pipeline that would deliver Canadian oil 1,179 miles to Gulf Coast refineries. After all, Canada has the oil, we need it, and they want to sell it to us.

Now that Nebraska Gov. Dave Heineman agrees that rerouting the proposed pipeline away from the environmentally sensitive Sand Hills Regions solves his objections to the “disturbance of Nebraska's land, water resources and “special areas,” it looks like there should be no objections - the State Department recommendation sees 42,100 average jobs created over a 1-to-2-year construction period providing $2.05 billion in earnings; construction material requirements from U.S. businesses about $3,3 billion; and short-term revenues to some states, about $65 million. Temporary housing camps required for construction workers could generate $2 million in property taxes for host counties.

In addition, the Hart Heavy Oil Outlook sees heavy demand from local and overseas customers through 2035. The refineries are prepared to process this demand up to 2 million barrels per day from the Canadian oil sands.

So why are picketers encouraging President Obama to veto the project if Congress approves? They're concerned about carbon dioxide and ghg (greenhouse gases) polluting the atmosphere. The tar sand oil (bitumen) from the massive Florida-size oil area (third largest oil reserve in the world) is mostly strip-mined as a tarry solid. Heated water then melts and frees the oil from its sandy source. It's then heated and pressurized into a thick crude, which is diluted with light hydrocarbon liquids to become dilbit (diluted bitumen). It can then be transported by pipeline.

The process releases large amounts of harmful atmospheric pollution, 17 percent more ghg than conventional production worldwide. Environmentalists already concerned with atmospheric pollution see this addition as the “tipping point” for severe health and climate change concerns.

Profitability is another factor. Charles A.S. Hall of the State University of New York developed a measure called the “energy return of investment” (EROI), which compares the ratio of energy provided per unit of energy spent. Although the tar sands' EROI is much less than that obtained from conventional oil sources, the latter's EROI continues to drop rapidly over the past several decades because of deeper drilling required and added expenses incurred from offshore drilling. However, the tar sands' EROI was found to be greater than that from ethanol, biodiesel and heavy oil from California.

So are the negatives sufficient reason to drop the pipeline project? NASA Climate scientist James Hansen states, “Moving to tar sands, one of the dirtiest, most carbon-intensive fuels on the planet, is a step in exactly the wrong direction, indicating either the government doesn't understand the situation or they just don't give a damn.”

The best answer is that the economic advantages outweigh the negatives of the questionable global warming effects from the oil sands' process. Also, if we don't take the oil, China will, and the pollution remains. Pollution is still a concern and is being closely watched. Through enhancements, producers have reduced the per-barrel emissions 26 percent since 1990.

A University of Victoria study determined that recovering and burning all of Canada's oil sands reserves that are economically feasible to develop would raise global average temperatures by only .036 degrees Fahrenheit. And further reductions in ghg emissions from oil sands production is expected.

l Quentin Wagenfield, retired from Rockwell Collins as a technical writer and programmer, is a freelance writer from Cedar Rapids. Comments: wagen@q.com