Obama to block Keystone Pipeline

[AlBell]

What? 1000 bbl of oil dumped in the Yellowstone River doesn't do it for you?

July 1st, 2011.

Look it up.

No... obviously he's refering only to spills in acquifers in Nebraska only.

Yellowstone spill? Nope, doesn't do it. Let's look at actual damage after a couple years.

Bolded is thread topic.

 

[lomiller]

Just for a little more background:
http://commoditiesstreetjournal.com...-on-wti-lls-crude-oils-have-diverged-in-2011/
http://www.jeffrubinssmallerworld.c...ng-canadian-producers-over-1-billion-a-month/

Essentially the part of the pipeline that is already built goes top Cushing Ok, which is an important storage and distribution hub for the NYMEX. The part that is being blocked would carry oil from this distribution hub to the refineries on the Gulf Coast.

Right now there is more oil coming into Cushing than there is refinery capacity or demand. Meanwhile refineries on the east coast and gulf coast can’t get enough oil to keep their refineries busy. At the same time oil coming in from Canada and North Dakota can’t find buyers. This is resulting in higher gasoline prices in the US while at the same time costing Canadian oil producers upwards of $1 billion a month.

 

[BobTheDonkey]

Just for a little more background:
http://commoditiesstreetjournal.com...-on-wti-lls-crude-oils-have-diverged-in-2011/
http://www.jeffrubinssmallerworld.c...ng-canadian-producers-over-1-billion-a-month/

Essentially the part of the pipeline that is already built goes top Cushing Ok, which is an important storage and distribution hub for the NYMEX. The part that is being blocked would carry oil from this distribution hub to the refineries on the Gulf Coast.

Right now there is more oil coming into Cushing than there is refinery capacity or demand. Meanwhile refineries on the east coast and gulf coast can’t get enough oil to keep their refineries busy. At the same time oil coming in from Canada and North Dakota can’t find buyers. This is resulting in higher gasoline prices in the US while at the same time costing Canadian oil producers upwards of $1 billion a month.

And while I can appreciate that existing businesses want their hands on this crude oil, why should we cater to them at the likely expense (and I say likely due to the frequency of oil spills in other pipelines) of natural resources/environmental damage? If the demand for this crude is so great, if so much is being lost by not having it refined, why not build a new refinery in the north from whence the petroleum products can be distributed to surrounding northern states without having to travel all the way to the Gulf before coming back?

 

[BenBurch]

Yellowstone spill? Nope, doesn't do it. Let's look at actual damage after a couple years.

Bolded is thread topic.

If you think Nebraska is magic and that what happened in Montana can't happen in Nebraska, you're deluded.

 

[NoahFence]

And while I can appreciate that existing businesses want their hands on this crude oil, why should we cater to them at the likely expense (and I say likely due to the frequency of oil spills in other pipelines) of natural resources/environmental damage? If the demand for this crude is so great, if so much is being lost by not having it refined, why not build a new refinery in the north from whence the petroleum products can be distributed to surrounding northern states without having to travel all the way to the Gulf before coming back?

I think the problem being faced by the Oil Industry is that your comment makes sense. They don't like that.

 

[BobTheDonkey]

I think the problem being faced by the Oil Industry is that your comment makes sense. They don't like that.

Well, of course not. That means the possibility of less monopolization of the market and/or more out-of-pocket costs because there are fewer states involved in the construction so less $$$ in tax benefits, etc. Plus they'd have to face that their current refineries are hardly as environmentally friendly as they could be - and the new refinery wouldn't be able to be grandfathered in rather than have to meet all the current regulations.

And, of course, the obvious: if the crude goes to the refineries in the south, it's more easily exported than if it's refined in the north. Of course, what the north ceases to require from the southern refineries could still be shipped overseas, but that's different crude/products or some-such.

 

[Molinaro]

I think the problem being faced by the Oil Industry is that your comment makes sense. They don't like that.

Refineries are very expensive to build. A refinery to process 100,000 barrels/day costs on the order of $1,500,000,000 to build. The Keystone pipeline has a goal of transporting 700,000 barrels a day. As you scale up the barrels/day capacity of a refinery the construction cost goes up on a per barrel basis, not down. Lower capacity refineries cost less per barrel/day.

Spending billions to build a new refinery while other refineries are running below capacity does not make sense.

 

[mhaze]

And while I can appreciate that existing businesses want their hands on this crude oil, why should we cater to them at the likely expense (and I say likely due to the frequency of oil spills in other pipelines) of natural resources/environmental damage? If the demand for this crude is so great, if so much is being lost by not having it refined, why not build a new refinery in the north from whence the petroleum products can be distributed to surrounding northern states without having to travel all the way to the Gulf before coming back?

No.

Industry doesn't need your "advice".

 

[Brainster]

The real reasons this is opposed so vehemently is that the tar sands are refined twice, once at the source to make the synthetic crude and once at the destination. At the source, they have to take what is a waxy sour product and change it to a light sweet product, and the result is a lot of pollution. Yes, its pollution in another country, but some people have realized that it's on the same planet, and might not be a great idea.

Well, it's a good thing that those tar sands aren't going to be polluting anywhere on this planet. Ooops!

 

[BobTheDonkey]

Refineries are very expensive to build. A refinery to process 100,000 barrels/day costs on the order of $1,500,000,000 to build. The Keystone pipeline has a goal of transporting 590,000 barrels a day. As you scale up the barrels/day capacity of a refinery the construction cost goes up on a per barrel basis, not down. Lower capacity refineries cost less per barrel/day.

Spending billions to build a new refinery while other refineries are running below capacity does not make sense.

Pushing refineries to their max capacity doesn't make sense either. From a pure bottom line of the business standpoint, sure. But from a maintenance and capability standpoint, it's generally not wise to push anything to it's full capacity for long.

The Keystone XL portion, what we're talking about, is estimated to cost approx $7,000,000,000. At approx 4.66x what it would cost to build your 100,000 barrel/day refinery. So, that's 466,000 barrels/day at the same approximate cost of your pipeline, for a loss of 50,000 barrels/day. Without the added costs of shipping the refined products back north nor the environmental disasters lurking in the corner (that are common, not infrequent, in oil pipelines).

 

[Molinaro]

Pushing refineries to their max capacity doesn't make sense either. From a pure bottom line of the business standpoint, sure. But from a maintenance and capability standpoint, it's generally not wise to push anything to it's full capacity for long.

The Keystone XL portion, what we're talking about, is estimated to cost approx $7,000,000,000. At approx 4.66x what it would cost to build your 100,000 barrel/day refinery. So, that's 466,000 barrels/day at the same approximate cost of your pipeline, for a loss of 50,000 barrels/day. Without the added costs of shipping the refined products back north nor the environmental disasters lurking in the corner (that are common, not infrequent, in oil pipelines).

No.

1st, you quoted before my edit where I corrected the capacity goal of Keystone. They intend on transporting 700,000 barrels/day.

2nd, you completely ignored my point about scaling up the capacity of a refinery does not incur a linear increase in construction costs.

A 20,000 barrel/day refinery can cost as little as $20 million to build. Increasing the capacity by 5x results in a cost increase of 75x. It is not a linear relationship.

Even using your numbers based off my initial post a capacity increase of 4.66x will result in a cost increase more on the order of 60x. That's several tens of billions for a refinery to handle what this pipeline will transport.

And your suggestion that having a refinery sitting idle is good, compared to a refinery running at capacity is just plain silly.

 

[BobTheDonkey]

No.

1st, you quoted before my edit where I corrected the capacity goal of Keystone. They intend on transporting 700,000 barrels/day.

2nd, you completely ignored my point about scaling up the capacity of a refinery does not incur a linear increase in construction costs.

A 20,000 barrel/day refinery can cost as little as $20 million to build. Increasing the capacity by 5x results in a cost increase of 75x. It is not a linear relationship.

Even using your numbers based off my initial post a capacity increase of 4.66x will result in a cost increase more on the order of 60x. That's several tens of billions for a refinery to handle what this pipeline will transport.

And your suggestion that having a refinery sitting idle is good, compared to a refinery running at capacity is just plain silly.

Yes, I did quote that part of your post. However, my information comes from Wikipedia - which while not the most accurate at all times, is close enough. What you're talking about with your 700,000 is included somewhere in all of this.

1) Basically, there were multiple phases to this project. Keystone XL is estimated to add 590,000BBL/day capacity to the pipeline. The Keystone pipeline already has a capacity of approx 510,000BBL/day. The 700,000BBL/day number is a mid-way phase between the current Keystone pipeline and the final phase. Keystone XL, what we're discussing here, does not add 700,000BBL/day to the mix.

2) I was referring to building multiple refineries

Are the current refineries all sitting idle? If they were to not be idled, would that put all the refineries at max capacity?

Currently, according to this (U.S. Energy Information Administration), the current refineries are already operating at approx 85% of (total) capacity with only 921,000BBL/day capacity not in use. While adding 590,000BBL/day to the current refineries wouldn't be putting them at 100% capacity, it would edge them up toward 92-95%. And that's in Oct 2011. Check the few months prior where there was less than 700K/day extra capacity not already in use.

Not only are you advocating pushing the refineries to nearly max capacity on a regular basis (which just generally isn't wise), you're advocating doing so in place of building new, more environmentally-friendly refineries and using pipelines (that are known to be risky to the environment) to move that crude hundreds/thousands of miles to said refineries only to be shipped back as various petroleum products. From an evironmental standpoint, your position is disastrous. From an economic standpoint, your position is hardly defensible (added costs of upkeep on pipeline plus increased shipping costs to get products to market).

Combining significant environmental concerns to the weak economic concerns hardly justifies this pipeline.

 

[Molinaro]

Where does this 'only to be shipped back' fantasy come from?

And where does this assertion that running a refinery near capacity is a bad thing come from?

And what on earth makes you think building multiple new refineries is better than more efficiently making use of the one's already in use? You talk about disastrous environmental results while saying, lets build several more refineries.

You make no sense to me on any of your points.

 

[leftysergeant]

Where does this 'only to be shipped back' fantasy come from?

Good point. It isn't for our use, so why risk our natural resources to build the sludge line?

And where does this assertion that running a refinery near capacity is a bad thing come from?

From the mammalian section of someone's brain, as opposed to the ideas that spring from the reptilian brain of the average laissez faire capitalist. If you run any manufacturing facility at full capacity long enough, **** is going to break.

And what on earth makes you think building multiple new refineries is better than more efficiently making use of the one's already in use? You talk about disastrous environmental results while saying, lets build several more refineries.

Were you under the delusion that it is just three times harder to fight a fire and turn off the oil spigots in a 10000bbl refinery than it is in one of three 3000bbl refineries?

You make no sense to me on any of your points.

 

[Molinaro]

From the mammalian section of someone's brain, as opposed to the ideas that spring from the reptilian brain of the average laissez faire capitalist. If you run any manufacturing facility at full capacity long enough, **** is going to break.

That is a ridiculous thing to say. You act like running the plant within it's design limits is some terrible thing. What's terrible is having that extra capacity not being used. Having built the capacity, you are then not using it to generate the revenue that it could be providing and employing the number of people that could be employed. You can take your fantasies about refineries running near their capacity as some time bomb about to go off and shove it.

Were you under the delusion that it is just three times harder to fight a fire and turn off the oil spigots in a 10000bbl refinery than it is in one of three 3000bbl refineries?

Really? Those refineries that already exist and have been running for years catch fire on a regular basis? We need to build multiple new and smaller ones to alleviate these fire problems? I look forward to your links to the ongoing disasters that have been plaguing these long running plants.

You make no sense to me on any of your points.

I would make a general comment about your points, had you providing some. All I see is a stinking pile of absurdity that bears no relation to the reality of the situation.

 

[leftysergeant]

That is a ridiculous thing to say. You act like running the plant within it's design limits is some terrible thing. What's terrible is having that extra capacity not being used. Having built the capacity, you are then not using it to generate the revenue that it could be providing and employing the number of people that could be employed. You can take your fantasies about refineries running near their capacity as some time bomb about to go off and shove it.

Oh, my. Do you mean to tell me that you trust industry not to cut corners when there is an extra dime to be made, bec ause it might kill somebody?

Oh, dear.

Really? Those refineries that already exist and have been running for years catch fire on a regular basis?

Just often enough that fire fighters consider them a bit of a nightmare.

We need to build multiple new and smaller ones to alleviate these fire problems? I look forward to your links to the ongoing disasters that have been plaguing these long running plants.

It is also easier to clean up the pollution when a small one springs a leak. (WHEN, not "if.")

 

[Cobalt]

Oh, my. Do you mean to tell me that you trust industry not to cut corners when there is an extra dime to be made, bec ause it might kill somebody?

Oh, dear.

Do you build your own cars? Build your own planes? Fabricate your own guns and ammo?
No?
You trust companies not to cut corners when there is another dime to be made?
Oh, dear.

 

[Molinaro]

Oh, my. Do you mean to tell me that you trust industry not to cut corners when there is an extra dime to be made, bec ause it might kill somebody?

Oh, dear.

Argument by conspiracy fantasy. Yes, that's a sure fire way to prove a point.

 

[leftysergeant]

Argument by conspiracy fantasy. Yes, that's a sure fire way to prove a point.

What conspiracy theory? Unless the regulators watch their every move, count on their screwing up and sticking us with the cost of cleaning up.

 

[leftysergeant]

Do you build your own cars? Build your own planes? Fabricate your own guns and ammo?
No?
You trust companies not to cut corners when there is another dime to be made?
Oh, dear.

Of course, I don't trust them. I have to rely on their being laws in place to prevent their selling me dangerous crap.