CNBC: Economics no longer makes Keystone pipeline viable

[Newsjock]

Source: CNBC

... As Congress rushes to approve the long-delayed Keystone XL pipeline, it is questionable whether or not the project will make as much of a difference as proponents expect. Since June, crude oil has declined by 28 percent, pushing the price that oil from new wells in Canada may command below what the expected cost will be to produce it.

The so-called "heavy oil" extracted from sand in Alberta, which the proposed pipeline would carry to Nebraska, en route to refineries on the Gulf Coast, will cost between $85 and $110 to produce, depending on which drilling technology is used, according to a report in July by the Canadian Energy Research Institute, a nonprofit whose work is often cited by Keystone proponents. West Texas Intermediate crude oil traded today at $76.67.

"Anything not under construction (is) at risk of being delayed or canceled altogether," said Dinara Millington, vice president for research at Calgary-based CERI. Her cost estimates include the price of drilling new wells, meaning that existing wells that have already been paid for can continue to pump oil profitably, she said.

CERI' s analysis squares with the views of other experts, who have pointed to low prices as a sign that economic facts, at least for now, don't match political rhetoric coming from Washington, where Keystone has been a goal for both Republicans and for Senate Democrats from oil-producing states.

Read more: http://finance.yahoo.com/news/economics-no-longer-makes-keystone-153213747.html

[yallerdawg]

1. If absolute useless BS keeps the electorate happy...

let's give it to them. Maybe Obama could sheepishly tag it to the debt limit or a budget bill, "give" a little to get a little. It wouldn't be the first time the fox outsmarted the hens.

Canadian oil isn't foreign oil, so as we add to the glut that is making American oil unprofitable while the Saudis undercut us, let's give this one to bipartisan compromise.

It will probably end up a pipeline to nowhere.

[karynnj]

6. No - oil prices change and when they go up, the approval is still there

I would suggest that we INCREASE the cost of production. This could be done by requiring that the company that owns Keystone MUST buy insurance (NOT self insurance) to pay for potential oil spills. I assume they could write this in such a way that even selling the pipeline would require the same of new owners if they want to put any tar sand oils through it.

This would be a great amendment to Landrieau's (or anyone else's ) amendment. It would be fun to see Republicans vote against this provision. It is highly justified as the benefits go to them and they should bear the REAL economic costs.

[Duppers]

15. yes!

[moonbeam23]

20. What good does that do?

How can mere money fix forever damage to the water for the "breadbasket of america"? You can't eat money!

[karynnj]

31. You completely missed my point

1) I am absolutely against passing Keystone
2) I was disputing that passing it now - because it might not happen so it doesn't matter - is wrong
3) What I suggested is what could be a POISON PILL if the requirement is costly enough. It might also be a poison pill that should be hard to justify a vote against.


I should add that doing this because Landrieu is deluded into thinking that she is losing because she is not seen as pro oil enough is ridiculous -- especially when the DSC is not giving her money. (ie they think it is more important to save their campaign money than to hold to their values and protect the environment.)

In addition, it is a slap in OBAMA's face - as he has just signed the agreement with China. How much better it would be if Democrats s[poke of the importance of that agree - not just for climate change -- but because it is a game changer in our relationship with China.

PS I suspect Landrieu could be helped by Obama's immigration order if she can use it to bring out more Latinos and liberals --- but only if she drops this idiotic idea that KXL is what will save her.

[csziggy]

9. "Canadian oil isn't foreign oil" - it isn't US oil

And the major reason the pipeline is needed is to pump oil to the Gulf Coast in order to export the oil to other countries, NOT to bring it to the US market.

Why should the US potentially pollute our aquifers to pump Canadian oil across the US to sell to other countries?

[KamaAina]

10. "Canadian oil isn't foreign oil"

I strongly suspect that most Canadians, including quite a few here at DU, would vigorously disagree with that.

[yallerdawg]

11. This is going to happen.

We have to make lemonade out of stoopidity, and Obama has worked magic on this stuff before.

I'm pretty sure Canadian oil cannot be foreign oil, we are seriously trying to become energy independent as long as it is profitable to pull it or squeeze it or frack it out of the ground. Republicans wouldn't support foreign oil, would they?

[Sunlei]

32. not oil it is canadas sludge from their oil sands, nasty stuff they want to transport across usa

refine in the usa and ship to china.

Canada has met their own domestic oil needs and can export for pure profits.

Canada should refine right on-site, right on THEIR countries oil sands/oil shale mess.

[J-Stone]

17. Canada isn't another country?

How the hell is oil from a foreign country not foreign oil?
You almost had it right because there is no such thing as foreign oil. It is all corporate oil and corporations don't give a damn what country it comes from because they end up with all of it anyway.
Canadian oil is foreign oil if you are talking about the country of origin. It is not actually foreign oil though because all oil is corporate oil.

[thesquanderer]

29. Maybe it is not considered foreign oil because of NAFTA (n/t)

[Sunlei]

33. corps probably have tax free zones set-up for the pipeline/border/refines so the USA makes ZERO

All the USA people get from 'the deals' are the damage bills & disaster cleanup costs.

[lobodons]

28. Translation for Canadian oil is not foreign oil

Translation: Canadian oil is not Towel Head oil.

[arcane1]

2. Stupid question: why would "Senate Democrats from oil-producing states" want this?

Wouldn't they prefer to keep Canada's oil in the ground in Canada?

[GeorgeGist]

4. Probably because they need the oil companies ...

donation$ to their careers.

[LeftInTX]

16. It benefits the refineries on the Gulf Coast

Correct me if I'm wrong, but the tar sands from Canada require a certain type of refinery. Those refineries are on the the Gulf Coast.

[GeorgeGist]

3. Excellent.

[kentuck]

5. Robert Reich had a post about how Koch Bros.,

will benefit from the pipeline.

[Sunlei]

7. Utah just started their own shale/oil sand mines, we don't need Canadas environmental disaster

We have our own domestic Utah disaster instead, to look forward to.

[moonbeam23]

21. So true

That deserves a post all its own...a tale of greed., corruption, and stupidity worthy of the teabaggers!

[Octafish]

8. LOL. So, our leaders didn't need to shaft the Democratic base after all?

Big oil is so fickle.

[DCBob]

12. Dont get your hopes up...

The headline is a bit misleading. The comment refers to building new oil wells.. not specifically to the xl pipeline. Also once oil prices go back up then they this is moot point. I suspect if approved they will build it. There is plenty of oil already being produced that could be transported by the pipeline rather than by truck or rail.

[snooper2]

13. All they have to do is change the name and everyone will quit bitching about it

Don't ever see any threads about "The Front Range NGL Pipeline" ....


change Keystone to something like, Downward Steel 47R

[Fred Sanders]

14. No comment yet on what Canadians want, with their fucking oil.....America is so into itself.........

[subterranean]

24. TransCanada owns the oil, and the pipeline is their project.

What the people of Canada want doesn't really matter much. Many of them are against the pipeline, although a slim majority still support it.

[Fred Sanders]

25. What the people of Canada want does not matter much? You think Canada is like America...wrong.

Support in January was evenly split, but declining... their opinion matters as it requires governmental approval in Canada as well as Provincial approvals.

The alternative West Coast pipeline to XL, a trans-Camada proposal, is meeting heavy resistance in B.C.

"Canadians have a mixed view of the proposed Keystone XL pipeline but a majority still support the government approving the project, according to a new poll.

The survey released on Wednesday, conducted by Nanos Research on Dec. 14-16, 2013 and interviewing 1,000 Canadians, found the country split down the middle on their perspectives of Keystone. About 48 per cent said their views of the project were either positive or somewhat positive, while 46 per cent viewed it negatively or somewhat negatively.

Positive views were highest in Atlantic Canada and the three Prairie provinces, at just over 50 per cent. Negative views were most prevalent in British Columbia, however, with 63 per cent having negative or somewhat negative feelings about the pipeline. Barely one-third of British Columbians said they had a positive view of the project in a province where a divisive debate over pipelines has been raging for months."

[subterranean]

27. I thought the Canadian government had already approved it.

Not sure about the provincial governments, though. I suppose the declining support might make it harder for them to approve the project.

[Recursion]

18. It stopped being viable when oil hit $84, and it's at $78 now

And will be for a while.

This whole issue stopped being about reality a while ago.

Canada can find a cheaper way to do this than paying the US to pump crude down to the Gulf.

[progressoid]

19. I see a federal subsidy is someone's future!

[maxrandb]

22. Ain't that the truth

Happened here in Hampton Roads Virginia. Contracted with a private company to upgrade old tunnels and build a new one. If you've never been to the Norfolk, VA area, you have no idea of the joy of sitting for hours in traffic while trying to get through one of the only 3 tunnels in and out of the place.

Well, our old Repuke Governor and his Repuke Legislature pushed through a transportation bill for pay for this via a toll on the current tunnels. Problem is, about 23% of the people that used to use the tunnels daily, have found a way around. Might be 10 miles out of the way, but it means they're not paying close to $2 each way through the tunnel.

Well, no problem for the private company. Written into the transportation bill was a "guarantee" of revenue. If less people use the tunnel, and the projections of revenue generated don't meet a certain percent profit for the private company, we taxpayers here in Virginia kick in what's needed to meet the revenue target.

Effing company got some sweet deal of like a guaranteed 13% profit for the next 50 years. That's supposed to be when the tolls end.

[Hekate]

23. Imagine that. Please proceed with the veto, Mr. President.

[Demeter]

26. As if Economics mattered

It's PROFITS, for the profiteers, that matter. They have the angles, and the moola to grease the skids.

[Old Nick]

30. Ah, but it's not ABOUT economics to Republicans anymore

It's religion.

[NCTraveler]

34. Somehow this will be the start to additional tax breaks and subsidies to build it. nt.