Kenmare ND - Upside Down Under

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Upside Down Under

By Marvin Baker, a new weekly column in The Kenmare News


Is Keystone XL dead in the water?...

Posted 11/11/14 (Tue)

On Oct. 30, Trans Canada made a formal application to the National Energy Board in Ottawa requesting the necessary permits to build the Energy East pipeline.

Energy East is said to be Keystone XL on steroids and will serve as an alternative to the Keystone XL pipeline which has become an international political football.

In fact, former New Brunswick Premier Frank McKenna said, “the best way to get Keystone built is to make it irrelevant.”

The purpose of this new pipeline is to transport crude oil from the tar sands of northern Alberta to the same refinery in St. John, New Brunswick that was supposed to accept the Bakken crude that exploded at Lac-Megantic, Quebec in July 2013.

Trans Canada officials got tired of waiting on Pres. Barack Obama to sign an international agreement allowing Keystone to proceed across the international boundary.

Energy East is actually plan C and will cost almost $4 billion more than Keystone XL. Plan B was to build a pipeline from Hardisty, Alberta to the British Columbia coast where tar sands oil could be loaded on barges and shipped to the Pacific Rim.

That has essentially failed because of environmental concerns from First Nations people in British Columbia’s interior.

Since that time, the push began for Energy East which will cross 2,900 miles and will carry 30 percent more crude oil than Keystone.

And just like Keystone, Energy East won’t be built without dissent. Public forums need to take place and small protests in Quebec have already been the thorn in the side of Trans Canada officials.

The difference is, there is already a natural gas pipeline from Dryden, Ontario to Ottawa that is expected to be converted to crude oil and linked to Energy East.

As Trans Canada goes full speed ahead with its plans to build Energy East, Keystone continues to be marred by politics and protests, now mainly farmers in Nebraska who don’t want a 36-inch oil pipeline crosing their property.

On Sunday, the Roy Green radio show was dedicated to debate about Keystone XL and Energy East.

Talk show host Roy Green, who set up an interview with Sen. John Hoeven, R-N.D., was obviously distraught when Hoeven didn’t call into the program, which runs coast to coast in Canada on the Corus Radio Network.

Throughout the entire two hours, Green took jabs at Hoeven for not keeping his word and blowing off a live radio interview.

Since Hoeven didn’t call, Green asked listeners to call in and it seemed the consensus is to favor Energy East instead of Keystone.

Does that mean that Keystone XL is dead in the water even though Congress expects to get it on the fast track for approval now that Obama is a lame duck?

Apparently no, but it may not have the significance as once thought. For one thing, if and when Energy East transports tar sands crude to St. John, there is also direct access to the St. Lawrence Seaway, which could then ship that same oil from St. John to Houston, which is also the final destination via Keystone.

The other piece of that puzzle is that Enbridge, or a subsidiary thereof, has received approval from the Federal Energy Regulatory Commission to build a rail unloading facility at Flanagan, Ill. That facility is supposed to transport tar sands oil from northern Alberta to Flanagan by rail, then on pipeline to refineries in Cushing, Okla., and Houston.

What one has to consider in that scenario is where are the oil trains going to cross the international boundary? We’ve already been assured by the Saskatchewan Energy Ministry that it won’t be going to Berthold through Northgate. However, it could be Portal or Pembina. That remains to be seen.

What might save Keystone is refiners realize that tar sands oil is thicker than normal crude and they’d like to blend it with oil from North Dakota, Wyoming and Colorado to make it more attractive in the marketplace. It’s about the same as blending wheat in an elevator to get a better protein.

Unfortunately, if this rail line and Energy East both come to fruition, Keystone could be reduced to irrelevance as McKenna pointed out.

What it means in theory is that Keystone wouldn’t carry nearly the volume of oil that it would have if Flanagan rail and Energy East weren’t being planned.

Trans Canada and the Canadian government have both stated they are tired of being dependent on the Unites States and just might ship their tar sands oil east.