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mac
Joined: 07 Mar 1999
Posts: 17747
Location: Berkeley, California
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 Posted: Mon Oct 27, 2014 1:10 pm Post subject: |
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Energy companies talk about the market--but work hard for their subsidies. I think we can blame falling oil prices on everybody but Obama, or so say their apologists. What might it mean?
| Quote: | Falling oil prices have energized opponents of the proposed Keystone XL pipeline.
U.S. benchmark crude has tumbled 10 percent this month, closing at $81.01 a barrel in New York trading last week, and further declines are forecast. At $75, a government analysis said producers may be discouraged from developing Canada’s oil sands without pipelines like Keystone.
“It changes the narrative quite a bit,” Anthony Swift, an international lawyer at the Natural Resources Defense Council in Washington, said of the tumble in crude prices.
The pace of oil-sands production is key in the debate over Keystone, a Canada-to-U.S. line TransCanada Corp. (TRP) proposed in September 2008 when oil was more than $100 a barrel.
Environmentalists oppose developing oil sands because the process releases more greenhouse gases than other types of crude. President Barack Obama has said he won’t approve the $10 billion project if it would significantly exacerbate carbon pollution. It only would do that if it promotes more oil sands production.
“If you build cheap infrastructure to enable tar sands development, you are going to get tar sands development,” said Jim Murphy, a senior attorney at the National Wildlife Federation. A lack of pipelines means less development, he said.
Transport Costs
An environmental analysis released by the State Department said oil prices would have to fall to $75 a barrel for Keystone XL to affect development of Canadian heavy crude. The report said higher transportation costs might have a “substantial impact on oil sands production levels” at that price, a scenario they deemed as unlikely.
When crude prices are higher, producers would find another way to get the heavy, tar-like bitumen delivered to refiners -- by trains, for example -- even if Obama blocked the link, a January environmental assessment from the department said. The State Department is overseeing the review because the pipeline would cross an international border.
Now that prices are lower, environmental groups are renewing their argument that Keystone is a linchpin to oil-sands development and rail isn’t a reliable option. At the very least, they say, the tumble shows the State Department’s assumptions aren’t reliable.
Kevin Book, an analyst at ClearView Energy Partners in Washington, said falling oil prices may help environmentalists make a case that alternatives like rail, which cost more, aren’t viable. But he called the current price drop a “blip” that probably won’t affect the U.S. review of Keystone.
“I don’t believe you have too many people making the case that oil is going to fall in the $70 range and stay there for five years,” Book said in an interview.
Some analyses predict a rebound, and the State Department said its assumptions are based on long-term price models not short-term swings. For this year, crude reached $107.26 on June 20, and fell to $80.52 on Oct. 22 -- the lowest since late June 2012.
Bank of America Corp. predicts West Texas Intermediate could fall as low as $75 a barrel in the next three months, according to an Oct. 23 note.
Philipp Chladek, an analyst for Bloomberg Intelligence, said the Organization of Petroleum Exporting Countries is likely to cut production to avoid a further fall in prices.
OPEC Prices
“My conviction is that if OPEC doesn’t cut, they’re signaling they’re OK with a low oil price, this could really get things going,” he said in an e-mail.
Environmental groups tie their opposition to research showing the production and refining of the oil sands releases more carbon dioxide than conventional oil. They call Keystone a threat to the climate.
Keystone could add the equivalent of as much as 27.4 million metric tons of carbon dioxide a year over what a less-carbon intensive type of oil would release. The pipeline’s carbon is equal to emissions from about 5.7 million cars or 7.8 coal-fired power plants, the State Department said.
A 2013 draft environmental review concluded Keystone “is unlikely to have a substantial impact on the rate of development in the oil sands.”
The NRDC, the Sierra Club, National Wildlife Federation and other groups lobbied the department to remove that statement, urging officials to account for rail’s higher cost.
Rail Costs
The final report concluded Keystone probably wouldn’t affect development, even though it concluded rail might add as much as $8 per barrel to the transportation costs. In a win for environmentalists, the report included a scenario in which the absence of Keystone could affect development, if oil prices fell below $75 a barrel.
Shawn Howard, a spokesman for TransCanada, said the Calgary-based pipeline builder has commitments from the oil sands producers to ship using Keystone XL, showing their confidence that the market is sustainable.
“They don’t build projects like this on short-term prices, it’s with a long-term view in mind,” Howard said in an interview.
Environmentalists also say their viewpoint is validated by announcements of canceled or delayed projects. In September, Statoil ASA postponed its 40,000-barrel Corner project in Alberta, citing costs and “limited pipeline access.”
“Project cancellations like this are tangible proof that delays on pipeline projects like Keystone lead to real reductions in tar sands investment and associated carbon pollution,” six environmental groups, including NRDC, National Wildlife Federation and the Sierra Club, said in a statement.
Statoil said it allocates money to its most competitive projects. “We have never booked or planned for capacity in Keystone XL for Corner,” spokesman Knut Rostad said by e-mail. “The postponement of Keystone was thus in no way directly related to our decision.”
To contact the reporter on this story: Jim Snyder in Washington at jsnyder24@bloomberg.net
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mac
Joined: 07 Mar 1999
Posts: 17747
Location: Berkeley, California
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| Posted: Tue Nov 18, 2014 8:17 pm Post subject: |
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All sorts of big talk by the righties--you know, the ones that hate government and don't understand how to make anything work or compromise. Lots of predictions about ramming the pipeline down liberals throats, eh?
| Quote: | BY FRANK THORP V, CARRIE DANN AND ANDREW RAFFERTY
Senators supporting the Keystone XL pipeline on Tuesday came up one vote short of securing approval for the controversial project after days of intense lobbying from some of the pipeline’s biggest supporters in the upper chamber.
Fourteen Democrats joined all 45 Republican senators in voting for the pipeline, which needed 60 votes to pass. The finally tally was 59-41. |
Do you think that they will learn tactics and compromise from this? Not likely. |
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isobars
Joined: 12 Dec 1999
Posts: 20935
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| Posted: Tue Nov 18, 2014 8:36 pm Post subject: |
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| nw30 wrote: | | I'd consider buying stock in trucking and rail companies that do business in this area. |
Plus ServePro, BluSky Restoration, and TAS Environmental Services. |
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mrgybe
Joined: 01 Jul 2008
Posts: 5180
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| Posted: Wed Nov 19, 2014 12:32 am Post subject: |
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| Bye bye Senator Landrieu. Perhaps the Republicans should have bought off some other Democrat senator with hundreds of millions in taxpayer money to secure that 60th vote........you know, the way they purchased Ms Landieu's vote to get the ACA through. |
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nw30
Joined: 21 Dec 2008
Posts: 6485
Location: The eye of the universe, Cen. Cal. coast
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| Posted: Wed Nov 19, 2014 12:36 am Post subject: |
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No biggie on the vote today, it's going to come around again in about 10 weeks, then BHO can sharpen his veto pen,,,,,,,,,,,,,,,,,,,,, or will he?
Can't believe anything he says anymore, his credibility is sooooo gone. |
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MalibuGuru
Joined: 11 Nov 1993
Posts: 9299
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| Posted: Wed Nov 19, 2014 1:39 am Post subject: |
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| mac wrote: | All sorts of big talk by the righties--you know, the ones that hate government and don't understand how to make anything work or compromise. Lots of predictions about ramming the pipeline down liberals throats, eh?
| Quote: | BY FRANK THORP V, CARRIE DANN AND ANDREW RAFFERTY
Senators supporting the Keystone XL pipeline on Tuesday came up one vote short of securing approval for the controversial project after days of intense lobbying from some of the pipeline’s biggest supporters in the upper chamber.
Fourteen Democrats joined all 45 Republican senators in voting for the pipeline, which needed 60 votes to pass. The finally tally was 59-41. |
Do you think that they will learn tactics and compromise from this? Not likely. |
If they'd had 14 Republican votes for the ACA, it probably would have been a better bill. I'm wondering after Landrieu loses whether the same D's will vote for it a 2nd time around. |
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boggsman1
Joined: 24 Jun 2002
Posts: 9120
Location: at a computer
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| Posted: Wed Nov 19, 2014 8:51 am Post subject: |
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| 5 of the D 's won't be there in January . What could happen is Obama could sign it into law as part of a larger deal. If he does , we might get a clintonesque Obama for his last two years. Can anyone say $50 oil? And S & P 2500? Pinch me😎 |
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mac
Joined: 07 Mar 1999
Posts: 17747
Location: Berkeley, California
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| Posted: Wed Nov 19, 2014 10:47 am Post subject: |
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| Bard--for a change I agree with you. Had McConnell allowed open legislative procedures for the ACA, instead of blocking all Republicans from voting for the ACA no matter how amended, it would have been a better bill. This is, of course, the same Senate minority leader, soon to be majority leader, that blocked reform of intelligence gathering yesterday. You libertarians need to work a little harder at understanding just how terrible your "leaders" are. |
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mrgybe
Joined: 01 Jul 2008
Posts: 5180
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| Posted: Wed Nov 19, 2014 11:18 am Post subject: |
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| boggsman1 wrote: | | 5 of the D 's won't be there in January. |
Precisely. That's why they were finally free to do what they thought was right, rather than pander to Steyer's tens of millions in campaign contributions. BTW, do you have any idea how difficult it is to type with ski gloves on? Record low beaten by 6 degrees last night. |
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boggsman1
Joined: 24 Jun 2002
Posts: 9120
Location: at a computer
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| Posted: Wed Nov 19, 2014 11:44 am Post subject: |
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| mrgybe wrote: | | boggsman1 wrote: | | 5 of the D 's won't be there in January. |
Precisely. That's why they were finally free to do what they thought was right, rather than pander to Steyer's tens of millions in campaign contributions. BTW, do you have any idea how difficult it is to type with ski gloves on? Record low beaten by 6 degrees last night. |
It continually baffles me, having lived it myself, why humans will subject themselves to cruel and unusual punishment, when a spetacular alternative is just a short move away. Its one of life's great unaswerable questions. |
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