Develop Renewable Energy, Not the Keystone XL Oil Pipeline

Summary.  TransCanada, the sponsor of the Keystone XL pipeline project, filed an updated application for approval with the U. S. Department of State.  The Department issued a Draft Supplemental Environmental Impact Statement evaluating the application.

It addresses many immediate environmental concerns focusing on the pipeline route and its environmental integrity.  This post focuses on a more fundamental issue.  It restates the opposition of this blog to approval of the pipeline because if granted, the project would ensure a long-term commitment to continued and prolonged emissions of carbon dioxide, a principal greenhouse gas.

The energy economy is likened to a zero-sum enterprise, balancing investments in conventional carbon-based fuels for energy, worsening global warming, and developing renewable energy sources, improving the global climate.  The longer mankind accumulates higher and higher levels of atmospheric greenhouse gases, the worse global warming and its harmful effects on humanity become.  It behooves all nations to abate emissions and migrate to a carbon-free energy economy, sooner not later.  Accordingly, it is recommended to deny the XL permitting application.

Background.  The Keystone XL oil pipeline (XL) is an international transport pipeline project intended to carry bitumen (Alberta tar sands oil) from the Canadian border to refineries on the U. S. Gulf Coast.  Its sponsor is TransCanada Keystone Pipeline, LC.  Since the project has an international aspect, involving oil transport across the Canada-U.S. border, it requires positive review by the U. S. Department of State (DOS) and approval of the President.  The query to be resolved is whether approving XL is in the national interest.

         A first approval request was considered in 2011 with inconclusive results.  The proposed route passed over important subterranean aquifers in Nebraska.  The DOS Environmental Impact Statement (EIS) generated at the time dealt extensively with this issue.  Ultimately concerns over the susceptibility of the pipeline to failure leading to contamination of the aquifers led to failure to approve the project.

TransCanada has modified the proposed route through Nebraska to reduce  potential contamination of aquifers.  In addition, a portion of the original pipeline project from Oklahoma to the Gulf Coast is now under construction, as it does not require approval by the Administration.  The revised application has resulted in a Draft Supplemental EIS (SEIS) prepared by DOS in March 2013.  After formally releasing the SEIS in April 2013, any interested party may submit comments (see Note for details) for consideration and possible response before the final SEIS is issued.

         Tar Sands.  The oil available in Alberta is a surface-accessible mixture of a thick oily substance with the consistency of tar, called bitumen, with sand and clay.  Bitumen must be heated with hot steam to liquefy it, permitting separation from the minerals mixed with it.  Before shipping, bitumen is further refined to provide a synthetic crude oil suitable for pipeline transport.  Alternatively, bitumen can be diluted with liquid hydrocarbons to permit it to be pumped in the pipeline as well.

The Provincial Premier of Alberta, the province in which the tar sands are located, visited Washington, D.C. for the fourth time in 18 months during the week of April 8, 2013.  Alison Redford came to lobby for favorable action on XL.
 

Manmade global warming has become a serious problem in recent decades.  Mankind’s burning of fossil fuels, and other industrial and agricultural practices, are generating ever-increasing amounts of greenhouse gases that are released into the atmosphere.  These accumulate because most carbon dioxide, the product of burning, and some others of the gases, remain in the atmosphere for long times.  There is no natural mechanism that removes these gases once emitted.  They remain active, accumulating to create a more intense greenhouse effect, for a century or longer.  It is the total accumulated burden of greenhouse gases, not their annual rate of emissions, that governs the intensity of the greenhouse effect.

The Draft Supplemental Environmental Impact Statement.  This post discusses aspects of the SEIS presented in the Executive Summary.
 

The American portion of the pipeline under review extends from the Canadian border in Montana, traverses South Dakota and Nebraska and ends at Steele City, NE.  This portion is 875 miles (1408 km) long and 36 inches (91 cm) in diameter.  It will carry Canadian tar sands bitumen.  A branch, carrying shale oil from North Dakota, and other crude oils, will join it.  Its total capacity is intended to be 830,000 barrels per day, of which 555,000 barrels per day is currently committed to transporting Canadian bitumen.  Ultimately the sources of the oil stocks it will carry would be determined by market decisions. 
 

The SEIS devotes extensive attention to potential localized environmental effects, especially in the case of leakage.  These have been amply addressed elsewhere, including the SEIS, by both proponents of the pipeline and its environmental opponents. 

Construction of the U. S. portion of XL is estimated to cost US$3.3 billion for directly incurred expenses.  Direct employment during construction would be about 3,900 full time jobs over the 1-2 years envisioned for construction.  Once operating XL would need fewer than 50 employees.  The construction site is a moving front progressing along the route, requiring a 110 foot wide right of way during construction, which would be restored to a permanent 50 foot right of way upon completion, amounting to 5,584 acres (2,259ha) of land.  It includes 44 valve stations and 18 pumping stations along this segment. 

Climate change impact of XL.  The Executive Summary reports that operation of the proposed XL project is expected to lead to the emission of about 3.2 million metric tons of CO₂-equivalent per year of operation, mostly devoted to generating the electricity to operate the pumping stations along the pipeline.  The SEIS states this is comparable to the energy requirements of about 626,000 gas-powered cars, or about 398,000 homes using electricity, for one year. 

These figures account only for the operational emissions of the XL Project under review.  The full length of the U. S. portion of the pipeline from the Canadian border to a Gulf Coast terminus is about 1,700 miles, or almost twice the length of the proposed Project.  So the numbers in the preceding paragraph should be approximately doubled to account for transporting tar sands bitumen from the Canadian border to a Gulf Coast refinery. 

In addition, on a life-cycle basis extracting and refining of Alberta bitumen is more energy intensive than that of conventional oils, releasing about 17% more CO₂.  As noted above in the Background section, this is because of the extra heat energy needed to liberate the bitumen from its mineral composite.

This writer has estimated the CO₂ burden arising from actual combustion of tar sands bitumen, in the presumed form of gasoline, petroleum coke and other products of refining.  Depending on assumptions made, this estimate may have an error of perhaps 15%.  The result obtained is about 100 million metric tons of CO₂/year resulting from burning the full complement of bitumen proposed for transport by XL.  [Update 04/23/13:  This XL-derived annual emissions forecast represents about 4.5% of total CO₂ emissions for 2011 originating from burning petroleum-derived fuels in the U. S., according to data from the 2013 Annual Energy Outlook of the U. S. Energy Information Administration (Table A18), excluding international marine (bunker) fuels,]

 

Analysis

 

This blog has opposed the XL pipeline for a fundamental reason, one little argued by others.  It should be the policy of the U. S. to accelerate the transition of our energy economy away from one dependent on carbon-based fuels toward one that relies on renewable energy sources that do not emit greenhouse gases.  As pointed out in many recent posts, this should be done as soon as possible. 

Long Lifetime of Emitted GHGs. A major fraction of CO₂, the main greenhouse gas, emitted into the atmosphere remains there for at least one century and probably longer.  (Natural processes remove the minor portion, but cannot accommodate the full amount emitted.)  Thus atmospheric CO₂, and other manmade GHGs, will keep accumulating more and more until the rate of emission approaches zero.  This higher level of atmospheric GHGs worsens global warming and all its harmful effects on the planet and to mankind.  Thus early steps toward decarbonization of the energy economy are needed.

President Obama addresses climate change.  President Obama has proclaimed his support for efforts to combat global warming in both his Second Inaugural Address and his 2013 State of the Union address.  An important signal backing up his policy would be denial of a permit for XL.  This is because of the major additional annual rates of emission of CO₂ over the long term that its operation entails, as detailed above.  Transnational transport and burning of Canadian bitumen and its refined products would contribute about 106 million metric tons of CO₂ each year, for the full operational lifetime of the pipeline, i.e., for several decades.  The U. S. should take a policy stand that it will not be responsible for, or condone, such continued emission of GHGs, but rather that it will instead support deployment of renewable energy sources.

Pronouncements by TransCanada and the Alberta Premier are contradicted by their  actions.  The SEIS, presumably relying on declarations made by TransCanada, notes that it may not matter whether the U. S. approves the XL application.  Production of bitumen in Alberta and of crude oil in North Dakota would continue.  It states there are alternative modes of transport, involving other pipelines, rail, and truck, to carry Canadian bitumen to the Gulf.  Other destinations are also noted but were not evaluated. It also points out that the Gulf refineries already receive crude oil for processing by tanker transport from other sources.

Even so, TransCanada is actively campaigning for approval of XL and is laying groundwork for the Project.  For example, Mary Pipher, a Nebraskan opposed to the Project, points out in the New York Times of April 17, 2013 that TransCanada is using threats of exercising eminent domain (legal expropriation of property) against landowners along the XL right of way.

Alison Redford, the Premier of Alberta, has visited Washington, D.C. four times in the last 18 months seeking favorable action on XL.  During her most recent visit, she declared “We’re an exporting economy,” saying that Alberta’s bitumen would be harvested regardless of the approval of XL. “Alberta does have other options,” such as Canada’s Atlantic or Pacific coasts (New York Times, April 9, 2013).

The actions by TransCanada, described by Ms. Pipher, and the persistent campaigning in the U. S. by Premier Redford, clearly show that these interests are not ambivalent about the final decision on XL.  They are heavily invested in the outcome, and apparently actively pursue a favorable outcome.  To grant approval would further set back mankind’s pursuit of decarbonizing our energy economy by condoning continued fossil fuel use.

 

Conclusion: The energy economy is a zero sum enterprise.  In weighing whether to approve the Keystone XL pipeline, the choice is not whether to approve it or simply to reject it. Rather the correct decision to consider is whether to prolong the fossil fuel energy economy or to expand our renewable energy economy.

As noted above, the pipeline, if built, commits us to continued atmospheric emissions of CO₂ from this oil over its full service lifetime, i.e. 40 years or more.  [Update 04/23/13:  This represents about 4.5% of emissions from petroleum use in the U. S.]  The longer we delay to abate emissions, the harder it becomes.

The alternative strategy is to shift the investment that would be going into projects such as the pipeline into developing industrial scale, renewable energy sources and energy transmission infrastructure instead. We should stop harvesting tar sands oil and build wind farms and solar farms instead, and should reject new oil pipelines in favor of new transmission lines from those farms to energy consumers. The US$3.3 billion investment envisioned for the XL Project segment could develop significant renewable energy facilities such as these.  In this way, the overall energy economy is preserved, job demand remains vibrant, and global warming is addressed in a meaningful way.

[Update 04/23/13:  Cynthia Giles, Assistant Administrator for Enforcement and Compliance Assurance of the U. S. Environmental Protection Agency (EPA) commented on the SEIS in a letter to DOS dated April 22, 2013.  The comments identify aspects of the SEIS that are inadequate and require further analysis or support.  These include (among others) first, the 17% or higher greater emission of GHGs required to produce Alberta bitumen compared to a range of crude oils from conventional sources.  The letter requests an assessment of overall social costs for this increase.  Second, the letter requests a more thorough market analysis supporting the SEIS conclusion that regardless of whether the Project is approved Alberta bitumen production will not change significantly.  Third, the letter requests further details on how the U. S. and Canada can cooperate to mitigate GHG emissions in the production of bitumen (including carbon capture and storage) and possible use of renewable energy to power the operation of the pipeline.  These and other failings in the SEIS currently preclude the EPA from approving the XL Project.]

 

Note
 

Public comments on the SEIS may be submitted

a) by email to keystonecomments@state.gov,
 

b) using the internet at http://www.keystonepipeline-xl.state.gov/, or
 

c) by mail to:

U.S. Department of State

Attn: Genevieve Walker

NEPA Coordinator

2201 C Street NW Room 2726

Washington, D.C. 20520.

 

© 2013 Henry Auer

TransCanada’s Keystone XL Pipeline: Not in the U. S. Long-Term Interest

Summary.  The Keystone XL pipeline is proposed to carry Canadian crude oil originating in the Alberta tar sands to coast of the U. S. Gulf of Mexico.  As part of the approval process, the U. S. Department of State issued an Environmental Impact Statement on Aug. 26, 2011, which, overall, supports construction of the pipeline.  This post analyzes the report in the broader context of President Obama’s energy and environmental policies.  It is concluded that the XL pipeline would not be in the long-term interests of the U. S.  The project would not be consistent with the President’s policies promoting reduced emissions of greenhouse gases, since a) fossil fuels are burned to extract crude oil from Alberta tar sands, b) the additional flow of oil for decades means increased emissions of greenhouse gases when the refined oil is burned, and c) a considerable portion of the refined product is likely to be exported rather than being consumed domestically.  It would be far more beneficial to promote large-scale renewable energy projects in order to reduce our emissions of greenhouse gases.

Introduction.  The Keystone XL Project (XL) involves construction and operation of a pipeline carrying Canadian crude oil originating in the Alberta tar sands to refineries and ports on the coast of the Gulf of Mexico.  The applicant in XL is TransCanada Keystone Pipeline, LP (Keystone).  For an international project such as this, a Presidential Executive Order requires the U. S. Department of State (State) to determine whether the project is in the national interest.  As part of this review, State issued its Final Environmental Impact Statement (EIS) for XL on August 26, 2011.  This post is based on the Executive Summary of the EIS (link accessed Aug. 30, 2011). In addition to the EIS, State will consider further reviews from the U. S. Departments of Energy, Defense, Transportation, Homeland Security, Justice, Interior, and Commerce, and the Environmental Protection Agency (EPA).  Thus, consideration for approval assesses broad issues of national interest, as well as the need to satisfy various environmental considerations during both construction and operation.  This post reviews the environmental assessment as presented in the EIS, and discusses aspects of national interest from a broad perspective of energy policy.

The Proposed XL Project.  The pipeline is to be a 36 inch (91 cm)-diameter pipe capable of routinely carrying 700,000 barrels (1 barrel = 42 U.S. gallons, 147 L) of oil a day, with the option of increasing flow to a maximum of 830,000 barrels a day.  This represents 8-10% of U. S. imports in June 2011 from its 15 largest suppliers (link accessed Sept. 1, 2011).  The full length of the pipeline is to be 1,711 mi. (2,753 km), of which 1,384 mi (2,227 km) will be in the U. S. 

An existing Keystone pipeline extending from Steele City, Nebraska to Cushing, Oklahoma is part of the overall proposal.  Details of the issues considered in the EIS are presented at the end of this post.

Analysis.  Warming of the long-term average global temperature in recent decades is a reality that has been traced by temperature measurement at sites all around the planet.  The warming is directly traced to the increase in our atmosphere’s content of carbon dioxide (CO₂) and other greenhouse gases.  Global warming has already produced many extreme weather events around the globe whose effects on human welfare are severe, including drought and famine, flooding with consequent devastation, and forest wildfires.  These are predicted to become more severe as more CO₂ enters the atmosphere.

For these reasons it is important to strive toward a worldwide zero-emissions regime for greenhouse gases as soon as possible.  CO₂, once emitted into the atmosphere by burning fossil fuels for energy, remains there for a long time, at least 100 years (except for the CO₂ taken up by green plants in photosynthesis and absorbed by the oceans).  We can think of the atmosphere as a bathtub containing CO₂ (see this post).  The faucet is filling the bathtub with more CO₂ coming from fossil fuel combustion, but the drain is essentially closed, keeping most of the added CO₂ from escaping.  So the bathtub keeps filling higher and higher.  Increased atmospheric CO₂ is predicted to make extreme weather events, and detrimental changes in regional climatic conditions, worse than they are today.

President Obama has set the goal of reducing the greenhouse gas emission rate by the federal government by 28% by 2020 (link accessed Sept. 1, 2011). (We should remember that all remaining emission released each year continue to accumulate, as explained above, adding to the atmospheric CO₂ concentration.)  Laudably, the administration has supported small research and development projects, and granted start-up support, to small companies that are creating new technologies intended to achieve that goal.  In recent speeches the President has extolled job creation and enterprises engaged in renewable energy manufacturing, such as wind turbines and solar power.  In addition his administration has issued regulatory guidelines that significantly increase fuel efficiency of cars and trucks in the coming decade, first to 35.5 miles per gallon (mpg; 0.0662 L/km) by 2016, and further to 54.5 mpg (0.0431 L/km) by 2025, for cars and light trucks (link accessed Sept. 1, 2011).  Emissions standards are also being proposed for medium- and heavy-duty trucks.

The President’s recent decisions to resume limited offshore drilling for oil (link accessed Sept. 1, 2011), and opening the U. S. Atlantic and northern Alaska coasts to drilling (link accessed Sept. 1, 2011), however, are not consistent with his greenhouse gas goal. 

Nor would approval of the XL pipeline project support the President’s objective.  Although cast in the framework of helping the U. S. attain independence from foreign, potentially hostile, suppliers of our energy needs, approval of the pipeline would have the profound disadvantage of prolonging our dependence on fossil fuels.  The more oil and gas we burn, the more CO₂ is released and the more full the atmospheric “bathtub” becomes, worsening the effects of global warming.  The new oil wells and the XL pipeline transporting crude oil from Alberta represent fuelling commitments that last for decades, so that by these actions the U. S. is committing to increasing the atmospheric CO₂ concentration for decades to come. 

Offshore oil drilling costs billions of dollars.  The low-hanging fruit of drilling shallow wells has largely been harvested, so that the more expensive, and more risky, deep water drilling is all that remains.  The XL pipeline is forecast to cost US$7 billion.  This post respectfully proposes that energy companies that are willing to commit such large amounts of capital to prolong America’s demand for harmful oil and gas could just as easily commit to development of renewable energy.  After all, as energy companies, their business plans could justifiably be changed to develop renewable energy.  Their profits from undertaking such projects would be comparable to those expected from the oil-based development currently being programmed. 

A profitable renewable energy project is exemplified by Portland, Oregon’s solar-powered electric vehicle recharging stations (link accessed Aug. 26, 2011).  Portland is striving to have all forms of municipal transport based on electric power. This blog reviewed electric cars in an earlier post, pointing out precisely this need for renewable energy sources for these vehicles. 

A main argument used in the EIS to support the XL pipeline is that it would satisfy demand for crude oil at the Gulf Coast refineries (see Details, below).  It is implied that that demand originates domestically, and that the added supply would be consumed domestically in America.  In fact, according to the U.S. Energy Information Agency (link accessed Sept. 1, 2011) exports of finished petroleum products from the Gulf Coast increased from 703,000 barrels per day in 2005 to 1,580,000 barrels per day in 2010.  Thus support for the XL project cannot be based on domestic demand; rather there is no overriding national interest related to the U. S. domestic energy economy that is served by the project.  

Conclusion.  The XL pipeline project is proposed to transport large amounts of crude oil from the Alberta tar sands to U. S. Gulf Coast refineries in order to satisfy domestic demand and relieve reliance on petroleum imports from other foreign sources.  The project is not in accord with President Obama’s energy policies promoting renewable energy and reducing emissions of greenhouse gases.  Producing crude from the tar sands is far more energy intensive than producing crude from conventional wells, according to the U. S. Environmental Protection Agency (link accessed Sept. 1, 2011) and the EIS, detailed below.  Burning the refined products from this newly added source of fossil fuels would emit large, additional, amounts of CO₂ into the atmosphere, worsening global warming and its consequences, for many years to come.  Overall, the project does not appear to promote long-term U. S. energy and environmental interests.  Rather, the U. S. should strive to implement policies promoting energy efficiency and renewable energy sources as rapidly as possible. The world-wide benefit of working toward a zero-emissions energy economy would be considerable.

Details. 

This section summarizes the Environmental Impact Statement’s Executive Summary.

The proposed route of the pipeline is shown in the map below.

Source: U. S. Department of State. http://www.keystonepipeline-xl.state.gov/clientsite/keystonexl.nsf?Open (link accessed Aug. 30, 2011)

The pipeline itself is to be buried approximately 4 ft (1.2 m) below ground level, and passes at least that far below stream and river beds when it crosses these waterways.  Except in Nebraska, underground aquifers that the path encounters are far below the depth of the pipeline.  The project includes 30 above ground pump stations, over 100 valves, and an oil storage facility in Cushing, Oklahoma.  The overall projected cost is US$7 billion.  The pipeline, if approved, would begin operation in 2013.

Tar Sands.  The oil available in Alberta is a surface-accessible mixture of a thick oily substance with the consistency of tar, called bitumen, with sand and clay.  Bitumen must be heated with hot steam to liquefy it, permitting separation from the minerals mixed with it.  Before shipping, bitumen is further refined to provide a synthetic crude oil suitable for pipeline transport.  In addition, bitumen can be diluted with liquid hydrocarbons to permit it to be pumped in the pipeline as well.

Justification for XL.  The EIS states that demand for crude oil is high and growing in refineries on the coast of the Gulf of Mexico.  The principal objective of XL is to transport crude oil to the Gulf coast in response to this demand. A related objective is to fulfill market demand of the refineries, which currently get 5.1 million barrels per day, of their total capacity of 8.4 barrels per day, from abroad.

Safety considerations. The EIS states that Keystone agreed to 57 project-specific conditions, in addition to generic regulatory criteria already in place, for building and operating the pipeline.  The specific conditions govern design standards for manufacturing and testing the pipe, design and construction of the project including stringent pressure testing during construction, and remote sensing and data acquisition during operation that is intended to detect leaks at as low as 1.5 to 2% of the flow rate.

Frequency and severity of spills is discussed in detail.  The EIS reviews Keystone’s previous spill history, noting that they tend to be quite small in size and few in number.  Keystone projects a maximum potential spill volume of 672,000 gallons (note: not barrels) over 50% of the pipeline, and a maximum potential of 2.8 million gallons in a particular section of 1.7 mi (2.7 km).  Keystone is required to submit an Emergency Response Plan and a Pipeline Spill Response Plan for review before beginning operation.  In the event of a detected leak, pipeline pumps would stop, and isolation valves closed, all within 12 minutes.

Potential environmental impacts of leaks.  The most serious environmental impacts of leaks would occur in sensitive areas such as wetlands, rivers and streams, shallow groundwater areas, near drinking water supplies, and regions with sensitive wildlife or plants.  Both physical impacts on the oil on the terrain and toxicological impacts of oil on life forms are discussed in detail.

Passage through the North High Plains Aquifer System (including the Ogallala aquifer and the Sand Hills aquifer unit) is specifically mentioned.  These are important drinking water and irrigation water sources, and important sections of the aquifers pass close to grade surface for about 65 mi (105 km) in Nebraska.  State assessed in detail potential dangers to aquifers and water supply wells in preparing the EIS.  No sole-source aquifers, or aquifers that are principal drinking water sources, are crossed by the proposed pipeline route.  Based on previous spill experience, the EIS states that impacts of a spill would typically be limited to several hundred feet from the location of a spill, including, if at a shallow aquifer site, a limited area.  The EIS states “In no spill  incident scenario  would  the  entire Northern  High  Plains Aquifer system be adversely affected”.  

State specifies that Keystone should have an independent consultant approved by State and the federal regulatory agency, and the U. S. Environmental Protection Agency, to review its risk assessment, and identify any needed additional measures to be taken, based on the analysis.

Alternatives to the XL project were considered and dismissed.

First, not building the pipeline was considered.  It was assessed that even so, demand for Canadian crude on the Gulf Coast would remain undiminished.  It was evaluated that alternative use of rail or truck tank containers, or other pipelines, could partially fill the need.  Other crude would arrive from foreign sources by ocean tanker.  At the source, it was evaluated that Canadian producers would find other non-American consumers.

Second, system alternatives including alternate pipeline and transport modes as mentioned above were further evaluated.  None of the pipelines available would serve the needed volume of crude oil shipments, 380,000 barrels per day delivered to Texas alone.  Expanding other pipelines to fill the need would offer no better option than the XL project.  Trucking would worsen highway congestion and lead to significant greenhouse gas emissions.  Expansion of existing rail lines to provide the needed capacity would be somewhat better than the XL project, but their use would increase greenhouse gas emissions, emit considerable noise pollution and adversely impact communities on the route.

Third, five major route alternatives for pipeline construction were considered, all avoiding or minimizing exposure to the Ogallala and Sand Hill aquifers.  The alternative paths are all longer; all were eliminated based on cost and environmental factors.

Other alternatives still were also considered, in response to comments on a draft EIS.  State “did not find any of the major alternatives to be preferable to the proposed Project for the reasons presented in the final [full] EIS and summarized [here]”.   

Environmental Impacts.  The EIS considers numerous natural and societal impacts of the XL project.  The most significant evaluation relates to increased emissions of greenhouse gases as a result of sourcing crude oil from the Canadian tar sands.  It evaluated the full cycle from extraction, upgrading, transportation, refining and combustion.  Depending on specific assumptions made, the EIS concludes that for a gasoline product between 2 and 17% more greenhouse gases are produced than from conventional crude oils.  Based on assumptions employed, the EIS reports that the crude oil to be shipped by the XL pipeline would emit between 3 and 21 million metric tons of carbon dioxide (the main greenhouse gas) per year.

This writer finds this conclusion somewhat disingenuous.  Once at the refinery, the steps of refining and combustion are essentially the same for all sources, and should be removed from the total assessment.  It is widely known that extraction of crude oil from tar sands requires a high input of energy, not required to produce conventional crudes (see Analysis above).  This extra energy is obtained by burning fossil fuels, releasing greenhouse gases as a result.  Thus the production step enhances the percent greenhouse gas emissions significantly higher than the low range of 2 to 17% identified. 

A large number of other potential environmental impacts of the project are discussed in detail; essentially all are considered to be temporary in nature, occurring only during and shortly after construction of the pipeline.

© 2011 Henry Auer

Producing More Natural Gas in the U. S.: The Pickens Plan

Summary.  The U. S. uses about 25% of the world’s energy, yet has only about 4% of the world’s population.  As part of its energy supply, the U. S. uses large amounts of petroleum, over half of which is imported.  Much of the petroleum is used to fuel transportation. 

Natural gas is a fossil fuel that is widely abundant in the U. S., and is more accessible as a result of recent technological improvements.  Natural gas could be used supplant our dependence on petroleum as a fuel.  Nevertheless, extracting this natural gas is tied to controversial problems related to leakage of natural gas, or methane, a far more potent greenhouse gas than carbon dioxide, from the wells into the atmosphere, and to potential contamination of ground water and surface water with toxins from the drilling compositions used.

The entrepreneur T. Boone Pickens is promoting extensive use of natural gas to fuel transportation, in order to supplant gasoline, which is derived from petroleum including the oil imports.  He has helped author legislation that would provide tax incentives for the use of natural gas in vehicles, and for the manufacture of vehicles that can burn natural gas.

Developing natural gas as an interim solution to providing energy to the U. S. transportation market would be a useful contribution, providing the problems associated with its production can be resolved.

Introduction.  Fossil Fuel Use in the U. S. The U.S., with 4% of the world’s population, uses about 25% of its energy.  According to the U. S. Energy Information Agency,  a source of independent energy statistics, as of 2009 the U. S. used 18.8 million barrels of petroleum a day, of which 9 million barrels a day was for gasoline used in transportation.  72% of U. S. oil consumption was for transportation.  Supplying this consumption included 9.7 million barrels a day of net petroleum imports (11.7 barrels of crude oil and other petroleum products are imported, but some petroleum was also exported), corresponding to 51% of total consumption.  The U. S. produced 7.3 million barrels of total petroleum products a day, which included crude oil as well as the liquefied equivalent of natural gas.

Coal is the worst of the three fossil fuels, producing the most carbon dioxide (CO₂), the important greenhouse gas, for a given amount of heat energy released.   Greenhouse gases arising from human activity are a major contributor to global warming. 
Natural gas is the most efficient of the fossil fuels, emitting the least CO₂ for the amount of heat energy obtained.  It can be used in electricity plants as well as to fuel cars and trucks when the engine is properly modified.  Nevertheless, natural gas fuel still emits CO₂.  Optimally we should move to renewable energy as soon as possible.

Natural gas is an abundant domestic fuel resource, especially with the development in recent years of hydraulic fracturing technology (“fracking”) to extract it from gas-containing shale formations that occur widely in the U. S.  (see the map below).

Gas shale formations in the U. S., shown in pale green.  Copied from http://fracfocus.org/hydraulic-fracturing-how-it-works/hydraulic-fracturing-process

World-wide, supplies may be sufficient to last as long as 250 years.

At least one major oil company, Shell, is actively producing natural gas as a supplement to extracting crude oil.  In 2012 the company will produce more natural gas than petroleum.  Shell notes that modern gas-fired electricity generating plants emit half the CO₂ of modern coal-fired plants, and 60%-70% less than older, less efficient coal plants.

Hydraulic Fracturing.  Fracking involves two aspects.  The first is horizontally-directed drilling, whereby a vertical shaft is drilled to a depth predicted to contain gas within the rock, then the drilling is reoriented horizontally to reach the oil shale formations.  Several horizontal extensions can be extended from one shaft.  The second aspect is the use high pressure fracturing liquids to rupture the gas-bearing rock and release the natural gas to be brought to the surface.  The fracturing liquids are controversial because they contain proprietary mixtures of chemicals which potentially can contaminate ground water or surface water.

Problems with Natural Gas. The problems with natural gas are two-fold.  Natural gas (i.e., methane) is itself a greenhouse gas which, when released without burning into the atmosphere, is 25x as potent a greenhouse gas as CO₂.  The New York Times on April 11^th, 2011 reported that today’s natural gas wells, especially those using hydraulic fracturing (“fracking”) to release the gas from unconventional shale, leak significant amounts of methane into the atmosphere.  These wells therefore worsen the global warming conundrum, rather than help it.

Second, fracking uses toxic chemicals in water to get the gas out.  Unfortunately the chemicals, as well as toxic substances (metals, radionuclides) leached from the shale, may contaminate ground water and may be released into surface waste water.  The Energy Policy Act of 2005, shepherded by Vice President Dick Cheney, explicitly excluded fracking from coverage under the Safe Drinking Water Act (SDWA).   The New York Times reports  that a study by Rep. Henry Waxman and others finds that hundreds of millions of gallons of fracking compositions containing carcinogens regulated under SDWA were in common use in natural gas recovery.    

This important issue was addressed in a hearing held by the U. S. Senate Committee on the Environment and Public Works on April 12, 2011.  Principal witnesses included Robert Perciasepe, Deputy Administrator of the Environmental Protection Agency (EPA).  One important policy disagreement centered on whether it was sufficient, for protection of the public and its water resources, to allow each state to regulate hydraulic fracturing wells individually, or alternatively was it necessary for the EPA to issue regulations applicable nation-wide.  A second related to instances in which waste water from fracking activities passes through treatment facilities with the fracking contaminants remaining in the effluents, rather than having been removed by treatment.

The Pickens Plan for Use of Natural Gas in Transportation.  T. Boone Pickens, a businessman active in the oil and gas industry, recognizes the disadvantageous position the U. S. is in with regard to its energy economy.  Although the biggest single country supplying the U. S. with oil is Canada, a friendly neighbor, a large fraction comes from countries of the Organization of Petroleum Exporting Countries (OPEC), whose geopolitical interests do not necessarily coincide with those of the U. S.  Using the 2009 rate of imports, but the April 2011 price of about $100/barrel, the U. S. is transferring about $219 billion a year to OPEC countries alone.  This is not in this country’s political or economic interest.

Pickens has responded to this situation with a plan to develop natural gas and alternative energy in order to reduce our dependence on imported petroleum.  This post focuses on the natural gas portion of the plan.  Pickens recognizes that natural gas should not be considered a permanent or complete solution the energy challenges facing the U. S., but rather should be used in the interim to allow fully alternative, renewable energy sources to be developed.  In the long run he believes that, for transportation, new technologies need to be developed and implemented that effectively replace fossil fuels entirely. 

In the meantime he believes that natural gas can serve as a bridge fuel that is more advantageous than using gasoline and diesel made from imported crude oil.  He proposes that cars, light trucks and heavy freight trucks all run on natural gas.  He especially believes that fleet operators and heavy trucks would benefit; his web site states that currently there are no batteries adequate for driving heavy trucks.

Mr. Pickens has promoted the NatGas Act of 2011 (New Alternative Transportation to Give Americans Solutions Act of 2011) (H.R. 1380), sponsored by a bipartisan group of 76 representatives.  The bill offers tax credits a) for use of natural gas as an alternative fuel or in an alternative fuel mixture, b) for a new vehicle powered by natural gas, including heavy trucks weighing more than 26,000 lbs, c) for vehicles converted to operate on natural gas, d) for a refueling facility that dispenses natural gas, and e) to manufacturers producing vehicles operable with natural gas.

Conclusion.  Expanded use of natural gas as a fuel for use domestically in the U. S. would contribute significantly, in the near term, to lowering emissions of CO₂.  By using natural gas we reduce payments of large amounts of money to foreign suppliers of petroleum, many of whose interests do not necessarily coincide with those of the U. S.  The Pickens plan for promoting use of natural gas as a transportation fuel makes sense in the near term.  Nevertheless, the significant problems associated with producing natural gas by hydraulic fracturing, which will be the dominant technology going forward, must be satisfactorily investigated and resolved.  At best, natural gas may make sense to serve as a fuel for use during the transition to fully renewable energy.  We should develop renewable energy as soon as we can.

© 2011 Henry Auer

The Libyan Oil Crisis Argues for Developing Renewable Energy

Summary.  The present political crisis in Libya, which produces 2% of the world’s oil, has resulted in a sharp spike in the price of oil.   The U. S. is projected to need a slightly higher amount of oil in future decades, of which an increasing amount will be imported from foreign sources.  Because of a) a projected increase in production of oil world-wide from reserves that to date are undeveloped or unidentified, b) an increase in the number of cars world-wide, and c) a consequent strong increase in the price of oil, the U. S. will be sending large and increasing amounts of funds abroad to buy the needed oil.  In view of this situation, the U. S. should wean itself from its dependence on imported oil.  Burning fossil fuels contributes to global warming by emitting greenhouse gases (mainly carbon dioxide, CO2), which have recently been shown to contribute directly to weather extremes.  Forest fires, droughts and floods resulting as effects of global warming have enormous economic costs associated with them.  It would be beneficial instead to invest expenditures now to limit greenhouse gas emissions by imposing economic penalties for use of oil and other fossil fuels.  This could be achieved by a cap-and-trade mechanism, or through a carbon tax.  The revenues from these policies could be distributed to the treasury or the public, or be applied to support innovative research and development of renewable energy sources.  As many have said, “If not now, when?”

A Sharp Spike in the Price of Oil.  The United States, as well as other countries of the world, is addicted to fossil fuels for their energy needs.  The present political crisis in Libya, which produces 2% of the world’s oil, has led to a shock-provoked spike in the price of oil in the last few days (see the 1-year price chart in the graphic below).  On this day, February 23, the price peaked at $100/barrel; according to Barron’s.  As may be seen, the price increased sharply from about $88/barrel on February 16 to its present price in 1 week.

Crude Oil Price, US$/barrel

Source: http://online.barrons.com/data

This week’s events show that the threat of instability in a very small fraction of the world’s oil supply has a dramatic effect on its price.  This effect, on a percentage basis, is much more profound than the amount of oil potentially lost if Libya were to cease production. 

Increased Demand for Oil Predicted for the U. S. The consumption of oil in the U. S., and the amount projected to be needed in future decades, is shown by the dark red band in the following graphic.

Actual fuel usage up to 2009 and modeled projections after that date.

Source: U. S. Energy Information Agency Annual Energy Outlook 2011 – Early Release Overview.  http://www.eia.gov/forecasts/aeo/

The amount of oil that will need to be imported increases slightly over the period 2009 to 2035.

The world-wide production of oil, projected to 2035 by the International Energy Agency (IEA), is shown in the following graphic.  The dark blue band shows projected delivery from sources known today, and the light blue triangle shows expected but unproven delivery from oil reserves that remain to be identified or developed.  The gold band shows projected oil production from unconventional sources such as tar sands and shale oil.



Reproduced from World Energy Outlook 2010 © OECD/IEA.  http://www.worldenergyoutlook.org/docs/weo2010/weo2010_london_nov9.pdf



Increased Demand Due to Higher Numbers of Cars. Oil is used world-wide to refine gasoline for use as a vehicle fuel.  The IEA projects total vehicle counts in the world through 2035 in the following graphic, broken down by region.  (The OECD is the Organization for Economic Co-operation and Development, consisting of economically developed countries including the U. S., Europe, Japan and Australia.)  Non-OECD countries include India and Brazil, for example.

Reproduced from World Energy Outlook 2010 © OECD/IEA.  http://www.worldenergyoutlook.org/docs/weo2010/weo2010_london_nov9.pdf

It is seen that the projected number of vehicles almost doubles from 2008 to 2035, with significant increases coming from developing countries (orange and red bands).  They will require ever-increasing amounts of gasoline to fuel them.

Higher Prices Predicted for Oil As Demand Grows. As oil demand throughout the world increases in the next decades, the price can be expected to continue increasing.   Some predictions prepared by the U. S. Energy Information Agency are shown in the following graphic.  The various scenarios are to be discussed in the full version of the Annual Energy Outlook 2011.  The Reference scenario traces the projected price if minimum efforts are made to limit consumption.

Source: U. S. Energy Information Agency Annual Energy Outlook 2011 – Early Release Overview.  http://www.eia.gov/forecasts/aeo/pdf/0383er(2011).pdf

The increasing share of American need for oil coming from abroad, coupled with the anticipated increase in price as shown in the graphic above and the growth in the number of cars on the road, mean that over the coming decades, Americans will be sending many billions of dollars abroad to buy oil, in ever-increasing amounts,. 

Why Not Reduce Dependence on Oil? It is fair to ask, given these predictions of expanding demand and increasing cost, “Wouldn’t it make sense to adopt policies that wean the U. S. from its dependence on oil imported from abroad?” 

Global Warming from Man-Made Greenhouse Gases Is Already With Us. This blog has treated the effects of burning increasing amounts of fossil fuels on global warming in several earlier posts (see, for example,

http://warmgloblog.blogspot.com/2010/10/we-need-to-achieve-alternativesustainab.html ;

http://warmgloblog.blogspot.com/2010/11/steven-chu-u-s-energy-secretary.html ; http://warmgloblog.blogspot.com/2010/10/co2-bathtub.html ).   These offerings point out that it is crucial to abate greenhouse gas emissions as soon as possible, because the level of greenhouse gases that lead to global warming in the earth’s atmosphere continues to grow.  

Greenhouse Gases Are Directly Related to Extremes of Weather.  Reducing emissions is necessary because the atmosphere already has a high enough greenhouse gas content to cause severe climatic effects on the planet.   Indeed, two recent papers published in Nature show, for the first time, that greenhouse gases originating from human burning of fossil fuels has directly contributed to extreme weather events such as heavy rain and flooding in recent years (see Note 1).

Economic Basis for Addressing Global Warming Now.

Economic Damage Wrought by Extremes of Weather.  Forest Fires.  Droughts and floods have been predicted for the last two decades as part of the weather disruptions brought about by global warming.  Regions of drought make more likely the occurrence of severe forest fires, such as those in the western U. S. in recent years.  These destroy valuable commercial timber lands and private homes, and have required intensive fire-fighting activities.  Forest fires consumed almost 7 times more federal land during the 1987-2003 period than during the preceding 17 years, and has been attributed to global warming. Such events potentially have losses in the billions of dollars.

Agriculture.  Drought in the U. S. affects water resources that nourish urban areas and irrigate farms.  Limitations on drinking water, and restricted irrigation, lead to potentially large economic losses in water supply activities and lost agricultural yield.  Abroad, in 2010 severe droughts in Russia and Australia severely reduced wheat harvests, adversely affecting world-wide availability of food.  Wheat prices around the world have risen considerably as a result, including in the U. S.

Floods. Major floods in the U. S. (“100-year floods”) have occurred repeatedly in recent years.  Examples include Hurricane Katrina in 2005 and several floods in the Mississippi-Missouri river basin.  Hurricane Katrina was the costliest natural disaster in the U. S., and produced tragic loss of life.   Human suffering leads to economic loss, and the adverse economic impact on the New Orleans area has been huge.

Elsewhere in the world, the tremendous flooding of the Indus river basin in Pakistan may be at least partly correlated with global warming.  20% of the population of the country has been directly affected, and one estimate of overall long-term economic impact may be more than US$40 billion.  Although this occurred abroad, the U. S. is likely expected to contribute to major relief and recovery efforts, incurring unforeseen budgetary expenses.

By this selection of potential economic effects that may be attributed to global warming, it is seen that enormous economic expenses and losses have already occurred, and are likely to increase in amount and severity in coming decades, as a result of global warming.

Economic Incentive Policies to Limit Greenhouse Gas Emissions.  Unexpected economic burdens such as those sampled above may be considered to be one arm of a zero-sum scenario.  The other arm would involve undertaking planned investment expenditures to prevent global warming from occurring.  Policies to combat the emission of greenhouse gases include imposing negative incentives on burning fossil fuels and emissions of all greenhouse gases that add to the direct cost of using them.  This added cost, much of which would probably be passed along to the consuming public, has been a major negative political factor that has impeded enactment of policies at the U. S. federal level that would reduce greenhouse gas emissions.  (Other factors include the argument that developing countries like China and India, whose emissions have grown dramatically in the past decade, were excluded from coverage under the Kyoto Protocol.)   It would be more cost-effective, over the long term, to spend funds on these long-term preventive measures than to wait until we have to react on an emergency basis to climate-induced disasters.

Cap-and-Trade.  In the face of inaction at the federal level in the U. S., three regional agreements have been put in place in recent years: the Western Climate Initiative, the Midwestern Greenhouse Gas Reduction Accord, and the Regional Greenhouse Gas Initiative of the New England and Mid-Atlantic States.  All three of these accords rely on a cap-and-trade (market-based) mechanism to limit the emission of greenhouse gases.  Generally, the cap-and-trade mechanism works by issuing “emission allowances” to each industrial and commercial source.  The number of allowances establishes the cap, or upper limit, of greenhouse gas emissions across the program.  The cap is reduced each year.  The allowances can be bought or sold (traded) in a regional market, which establishes a price for emitting greenhouse gases and in essence creates a penalty for emitting.  This provides an incentive for each source to innovate in order to reduce emissions, thus lowering its expenses toward purchasing allowances each year.  Proceeds from the trades are delivered to the participating states, and are used at least partly to promote research and development of renewable energy enterprises.

Carbon Tax.  An alternative mechanism for limiting greenhouse gas emissions would be to impose a direct carbon excise tax on fossil fuels.  The tax rate is based on the amount of greenhouse gas emitted by the respective fuels.  The New York Times columnist Thomas Friedman has been advocating a carbon tax for several years, most recently on February 22, 2011.  Professor Daniel Esty of Yale University has also proposed a charge on burning fossil fuels that he calls a carbon charge, or a “harm charge”, on April 13, 2010. 

In each case, the authors propose imposing a low tax at the outset, then raising the tax according to a pre-established schedule, until it reaches a high enough level to have an effect on consumers’ energy habits.  Mr. Friedman suggests using the proceeds to reduce the U. S. national debt.  Prof. Esty, in contrast, suggests returning the proceeds to taxpayers by lowering the payroll tax (contribution to Social Security).  Overall, according to Prof. Esty, the higher cost associated with use of fossil fuels will lead businesses to change to measures and investments that increase conservation of fossil fuel use and produce a shift to renewable energy sources.

The Current U. S. Carbon Tax on Gasoline.  The United States imposes a modest tax on gasoline and diesel fuel at the federal level.  For gasoline currently it is US$ 0.184/gallon (US$ 0.049/liter).  (In contrast, as a result of high taxation, the representative price of gasoline in Europe in 2008 is about US$ 7.83/gallon, whereas in the U. S. it is about US$ 3.25-US$ 3.40/gallon.) As of April 2006 the federal tax is scheduled to fall to US$ 0.043/gallon on October 1, 2011.  This tax has been apportioned partly to the federal Highway Trust Fund, which is used mostly to support maintenance and expansion of the federal vehicle highway system, as shown in the graphic below:  

Collection and Distribution of Federal Gasoline Taxes, FY2001

It is to be noted that although the rectangles for the Highway Account and the Mass Transit Account appear the same size to the eye, the Highway Account is actually more than 5 times as large as the Mass Transit Account.

Source: U.S. Department of the Treasury, Internal Revenue Service, compilation of trust fund certifications dated June 18, 2001, Sept. 18, 2001, Dec. 28, 2001, and March 19, 2002; http://ncseonline.org/NLE/CRSreports/06May/RL30304.pdf.

The costs of cap-and-trade or a carbon tax would be higher than the current federal tax.

Opposition to the Present Carbon Tax.  Interest groups express differing opinions about the federal gasoline excise tax.  RedState.com feels that even the low present level of taxation on gasoline is too high. The group notes that combined federal and state gasoline taxes average about US$ 0.272/gallon.  It feels that with fuel prices rising, the taxes should be eliminated so that drivers don’t have to pay as much.  It also advocates eliminating federal support for highway construction projects.  On the other hand, the Public Policy & Sustainability Blog, which appears to be affiliated with Con-way freight, notes that the Highway Trust Fund is underfunded, requiring infusions from the Treasury to maintain its expenditures.  The blog suggests that the portion of the gasoline tax directed toward mass transit, such as high-speed passenger rail, be transferred into the Highway Account.

Conclusion.  The Libyan revolution in progress as this post is being written has critically affected its oil exports.  Even though only a small fraction of the world’s supply  is in question, the crisis has had a disproportionately large effect on the near-term price for oil, which results in higher prices of fuels for cars and trucks.  This has an adverse effect on our economic growth, and carries the disadvantage of transferring excessive wealth from the U. S. to the overseas producers of the oil.  Clearly, the instability and uncertainty of oil supplies from abroad should be a matter of serious concern to the American public, and to its government.

This occasion highlights the need for the U. S. to move away from its addictive dependence on fossil fuels for its transportation needs as soon as possible.  Renewable energy should be developed on an urgent basis to substitute for oil in our transportation.  Imposing a financial penalty on gasoline and diesel fuel, graduated over time, would help constrain our demand for these fuels, and would provide significant revenue for the federal treasury.  The penalty could come from a cap-and-trade system, or from a direct fuel tax, or from other mechanisms not yet identified.  The revenues could either be distributed as tax rebates to the driving public, or could contribute to paying down the national debt, or could be used to support research and development of alternative fuels and transportation modes as is currently done by the ARPA-E and other programs of the Department of Energy.  As many have said, “If not now, when?”

Note 1. Abstract available online free, or the full article for a fee or through personal or institutional subscription.  Many public libraries, and university libraries open to the public, receive the journal.

© 2011 Henry Auer