Another campaign opposes Keystone pipeline, Yet another American with a big chequebook has formally launched an initiative to garner support via social media with the goal of convincing U.S. President Barack Obama to turn down the proposed Keystone XL Pipeline. This time it's Tom Steyer, one of Obama's bagmen and former hedge fund type who has turned into a renewable energy evangelist and makes his home in California. Steyer kicked off his campaign in Washington, D.C., this week no doubt flying across the country to do so in an airplane using fuel made from oil extracted from the ground. Of course,http://www.bugsbunnys8s.biz/, there was no acknowledgment of that small fact or even how the crude oil got to the refinery and from there,http://www.squadronblues13s.biz/, as jet fuel, to the plane's fuel tanks during his speech.
Instead there were some theatrics apparently involving a jar of oil meant to resemble what is extracted from the oilsands. It's safe to say Keystone XL continuing to bear the sins of a carbon-based economy is getting to be a bit tiresome. The troubling fact, however, is that the case for Keystone XL isn't helped when back in Alberta pipeline companies like Plains Midstream continue to have issues, or when an Apache Canada pipeline essentially carrying brackish water ruptures and no one hears about it for 11 days. In fact, the entire industry suffers both producers and pipeline companies when things like that happens. While Plains seems to have learned some valuable lessons from the spill of its Rainbow Pipeline in 2011, one of the largest in Alberta's history, the boiler plate statement on the company's website stating its team is "dedicated to safe, reliable and environmentally responsible operations" isn't quite enough to inspire confidence.
Plains has had two other Alberta incidents in the past two years a spill into the Red Deer River last spring and another near Manning last week. Plains is structured as a Master Limited Partnership, or MLP. The Canadian version was once called a royalty trust. The modus operandi of an MLP is to run the assets to generate as much cash for investors as possible and not necessarily to go big on reinvestment. Could the fact that some of its assets are not exactly bright,http://www.phoenixsun8s.biz/, shiny and new be part of the problem for Plains? Apache spilled brackish water in northern Alberta from a pipeline that's five years old and other questions arise. How much has to do with corporate culture? The regulatory environment under which these pipes have been subject? Is there a way to regulate pipelines so as to completely eliminate risk? And if the public is really worried about pipeline spills, why is rail accepted as an option? Because the public can see the rail cars and can't see pipe that's buried? None of these come with a neat answer. Without safety cultures, for example, airlines would not fly.
If the pipeline followed the example of the airline business, would that be enough for the detractors like Steyer and others to beat their swords into plowshares on the issue of Keystone XL and oil-sands development? Probably not. And what of the regulator's role? Too much regulation and something called transactional friction enters the equation and no investment happens. On the other hand, if the regulator is perceived as being too much at arm's length, there is a constituency out there who are worried it will be co-opted by the industry it is appointed to oversee. Then there is the issue of who is prepared to invest in the massive upgrade of aging infrastructure that is desperately needed on this continent. What's critical in all this is there needs to be a dialogue between industry and regulator that ultimately arrives at a conclusion defining what constitutes reasonable standards for regulation.
And then there is the issue of what's realistic in terms of risk. Risk can be minimized, but never eliminated. Thus it becomes a question of risk tolerance. There are more than 400,000 kilometres of pipelines running through this province. And south of the border there are more than 2.5 million miles of pipe criss-crossing the U.S., enough to circle the globe 100 times; the simple truth is that a continent as vast as North America would cease to function without its pipeline infrastructure. Period. Rail carries a different risk profile and comes at a higher cost. That's one thing when prices are high, but something else entirely if an industry is struggling to put a lid on costs. Expectations are high there will be a major environmental policy statement made by Obama next month. While it's likely the timing of Steyer's stunt was meant to influence, at least in part, the direction of that speech, including a statement turning down Keystone XL, commentary by the Washington,http://www.playoffs12s.biz/, D.C.-based consultancy on Friday suggests otherwise.
"Given that the legislative route on climate policy is closed, Obama will likely focus regulatory action on GHG performance standards for new power plants and eventually incorporating climate change considerations into National Environmental Policy Act decisions on infrastructure projects ... More broadly for Obama,http://www.jordangrapes5s.biz/, his second-term environmental legacy, especially if he moves forward with KXL, will be focused around EPA and the targeting of coal-fired power generation."
Which is exactly where it should be. According to Robert Skinner, president of Kimacal Energy Strategies Ltd., four coal-fired plants owned by one company in the U.S. generate 80 million metric tonnes of carbon dioxide 30 mmt more than the 50 mmt generated by all the oilsands production that takes place today. That statistic alone shows the fight about greenhouse gas emissions, the oilsands and Keystone XL is entirely misplaced. Hopefully, Obama's policy statement in the coming weeks finally recognizes and addresses that fact.