Utah set to be home of first oilsands mine project in U.S. by end of 2015
By Geoffrey Morgan | July 21, 2015 6:12 PM ET
CALGARY – Despite fierce opposition from American environmental groups, the first commercial oilsands mine in the United States is just months away from starting up after receiving final regulatory approvals from officials in Utah late last week.
“We’ll be in production later in the fall with commercial production before the end of the year,” U.S. Oil Sands Inc. chief executive Cameron Todd said about a 2,000-barrel-per-day oilsands mine being built in eastern Utah. Stuart Gradon/Postmedia News
“We’ll be in production later in the fall with commercial production before the end of the year,” U.S. Oil Sands Inc. chief executive Cameron Todd said in a phone interview Tuesday.
Calgary-based U.S. Oil Sands is working through the summer to complete a 2,000-barrel-per-day oilsands mine in eastern Utah, which would make it the first commercial oilsands mine in the United States when it begins producing later this year.
Todd noted that oilsands deposits have been used in the U.S. in the past, including in the construction of the first roads in Utah, but have never been mined on a commercial scale. The Uinta basin in the northeastern and central southeastern of the state has more than 50 identified oil sands deposits, with an estimated total of 20 to 32 billion barrels of oil in place.
Late on Friday afternoon, the Utah Department of Natural Resources’ Division of Oil, Gas and Mining announced approvals for an amendment to US Oil Sands’ mine, which is currently under construction about 200 miles southeast of Salt Lake City.
The decision, released after a public hearing on the mine, requires U.S. Oil Sands to conduct water monitoring and submit a monitoring plan for the project by Nov. 1, and the company has indicated that it will comply with those regulations.
Officials from the Utah division of oil, gas and mining did not respond to a request for comment on Tuesday.
Repost from the San Francisco Chronicle [Editor – This report signals a highly significant shift in the discussions surrounding climate change and the oil industry: cut demand … or cut supply? A must read! – RS]
Gov. Brown wants to keep oil in the ground. But whose oil?
By David R. Baker, July 26, 2015 8:16pm
California Gov. Jerry Brown, right, delivers his speech during a conference on Modern Slavery and Climate Change in the Casina Pio IV the Vatican, Wednesday, July 22, 2015. (AP Photo/Alessandra Tarantino)
Even the greenest, most eco-friendly politicians rarely utter the words Gov. Jerry Brown spoke at the Vatican’s climate change symposium last week.
To prevent the worst effects of global warming, one-third of the world’s known oil reserves must remain in the ground, Brown told the gathering of government officials from around the world. The same goes for 50 percent of natural gas reserves and 90 percent of coal.
“Now that is a revolution,” Brown said. “That is going to take a call to arms.”
It’s an idea widely embraced among environmentalists and climate scientists. Burn all the world’s known fossil fuel supplies — the ones already discovered by energy companies — and the atmosphere would warm to truly catastrophic levels. Never mind hunting for more oil.
But it’s a concept few politicians will touch. That’s because it raises a question no one wants to answer: Whose oil has to stay put?
“They’ve all got their own oil,” said environmental activist and author Bill McKibben, who first popularized the issue with a widely read 2012 article in Rolling Stone. “Recognizing that you’ve got to leave your own oil — and not somebody else’s — in the ground is the next step.”
Take California.
No state has done more to fight global warming. By 2020, under state law, one-third of California’s electricity must come from the sun, the wind and other renewable sources. Brown wants 50 percent renewable power by 2030 and has called for slashing the state’s oil use in half by the same year.
But he has shown no interest in cutting the state’s oil production. He has touted the economic potential of California’s vast Monterey Shale formation, whose oil reserves drillers are still trying to tap. And he has steadfastly refused calls from within his own party to ban fracking.
“If we reduce our oil drilling in California by a few percent, which a ban on fracking would do, we’ll import more oil by train or by boat,” Brown told “Meet the Press.” “That doesn’t make a lot of sense.”
California remains America’s third-largest oil producing state, behind Texas and North Dakota. The industry directly employs 184,100 Californians, helps support an estimated 271,840 other jobs and yields $21.2 billion in state and local taxes each year, according to the Los Angeles County Economic Development Corporation.
‘Phasing out oil drilling’
Any governor, no matter how environmentally minded, would have a hard time turning that down. Even if many environmentalists wish Brown would.
“Just like we have a plan for increasing renewables, we need a plan for phasing out oil drilling in California,” said Dan Jacobson, state director for Environment California.
It’s difficult for politicians to even talk about something as stark as putting limits on pumping oil, he said.
“Solar and wind and electric cars are really hopeful things, whereas keeping oil in the ground sounds more like doomsday,” Jacobson said.
And yet, Jacobson, McKibben and now apparently Brown are convinced that most fossil fuel reserves must never be used.
The percentages Brown cited come from a study published this year in the scientific journal Nature. The researchers calculated that in order to keep average global temperatures from rising more than 2 degrees Celsius — 3.6 degrees Fahrenheit — above preindustrial levels, the world’s economy can pump no more than 1,100 gigatons of carbon dioxide into the atmosphere between 2011 and 2050. Burning the world’s known fossil fuel reserves would produce roughly three times that amount, they wrote.
Most governments pursing climate-change policies have agreed to aim for a 2-degree Celsius warming limit, although many scientists consider that dangerously high. So far, global temperatures have warmed 0.8 degrees Celsius from preindustrial times.
“The unabated use of all current fossil fuel reserves is incompatible with a warming limit of 2 degrees Celsius,” the study concludes.
Nonetheless, states, countries and companies with fossil fuel reserves all have an obvious and powerful incentive to keep drilling.
The market value of oil companies, for example, is based in part on the size of their reserves and their ability to find more. Activist investors warning of a “carbon bubble” in their valuations have pushed the companies to assess how many of those reserves could become stranded assets if they can’t be burned. The companies have resisted.
President Obama, meanwhile, has made fighting climate change a key focus of his presidency, raising fuel efficiency standards for cars, pumping public financing into renewable power and pushing for cuts in greenhouse gas emissions from power plants.
Cut demand or cut supply
But Obama has also boasted about America’s surging oil and natural gas production — and tried to claim credit for it. Last week, his administration gave Royal Dutch Shell the green light to hunt for oil in the Arctic Ocean. Keeping oil in the ground does not quite square with his “all of the above” energy policy, observers note. At least, not American oil.
“The same government that is working very hard to get a Clean Power Plan is allowing Shell to go exploring for hydrocarbons in the middle of nowhere, oil that may never be producible,” said climate activist and former hedge fund executive Tom Steyer, with audible exasperation.
He notes that Obama, Brown and other politicians intent on fighting climate change have focused their efforts on cutting the demand for fossil fuels, rather than the supply. Most of the policies that climate activists want to see enacted nationwide — such as placing a price on emissions of carbon dioxide and other greenhouse gases — would do the same, ratcheting down demand rather than placing hard limits on fossil fuel production.
“The political thinking is the market itself will take care of figuring out which fossil fuels have to stay in the ground,” Steyer said.
Some climate fights, however, have focused on supply. And again, the issue of whose fossil fuels have to stay put has played a part.
Opponents of the Keystone XL pipeline extension, for example, see blocking the project — which would run from Canada to America’s Gulf Coast — as a way to stop or at least slow development of Alberta’s enormous oil sands. James Hansen, the former head of NASA’s Goddard Institute for Space Studies, famously declared that fully developing the sands would be “game over for the climate.”
Obama has delayed a decision on the pipeline for years. Given America’s own rising oil production, rejecting a project that could be a boon for the Canadian economy would be difficult, analysts say.
“The message would be, ‘We’re not going to help you develop your resources — we’ll essentially raise the cost,’” said UC Berkeley energy economist Severin Borenstein. He is convinced that Canada will develop the tar sands, regardless.
“It’s become such a huge symbol that it’s impossible for Obama to make a decision on it,” Borenstein said. “I think he’s just going to run out the clock.”
Letter to the editor, The Benicia Herald [Editor: Note that letters do not appear in the online edition of the Benicia Herald. Andrés Soto lives in Benicia and is well-known throughout the San Francisco Bay Area for his environmental justice advocacy and his mastery of the saxophone. I particularly like Andrés’ focus on 19th century historical context. – RS]
Not fooled by Big Oil and Big Rail
By Andrés Soto, July 23, 2015
Dear Editor:
Andrés Soto
The recent phenomenon of transporting dangerous, volatile Bakken Crude by rail has created an opportunity for the American people to learn the true motives of Big Oil and Big Rail and what we as impacted communities can do about it.
Continuing derailments, explosions, fires and evacuations have shined the light on the Profit At Any Cost attitude of Big Oil and Big Rail. These industries grew up together in the late 19th century and led to some of the most egregious periods of income inequality, corruption and social conflict in US history.
Now these industries are asking us to trust them and allow them to bring Bomb Trains through our communities, putting our town’s economic viability at risk for a short-term economic gain. Exploding trains all over North America tell us a different story and we are not fooled.
Currently, the Valero Crude By Rail Project and the Phillips 66 San Luis Obispo Crude By Rail Project both put our town at risk for a catastrophe. Communities all over the country are standing up to oppose this high risk venture by Big Oil and Big Rail. Recently, the WesPAC Crude By Rail Project in Pittsburg, California removed the rail part of the project to make it a straight pipeline project.
Fracked Bakken Crude and strip mined Alberta Tar Sands Crude are just two of the Extreme Extracted Crude strategies by Big Oil to bring oil to market that would be better left in the ground. An intelligent global cooling plan to save our planet for future generations and all species requires the we leave the oil beneath the soil!.
Valero has already admitted it can and is bringing Extreme Crude in by barge to the Port of Benicia, thus it does not need the Valero Crude By Rail Project to be profitable. Therefore, it begs the question: Why would we, the people of Benicia, allow this project to proceed when it is just too dangerous?
Global warming is going to cause significant parts of Benicia to be underwater. Shouldn’t we be working on preventing that, rather than trying find ways to contribute to the problem?
We are the people of Benicia and our voices need to be heard! The Benicia Planning Commission and the Benicia City Council have a responsibility to listen to us and do what is in the best interests of ALL Benicians. Stop Valero’s Dangerous Crude By rail Project!!!
Repost from OnEarth Magazine, Natural Resources Defense Council [Editor: Significant quote: “The Kalamazoo River still isn’t clean. Let’s not forget how much it cost to (not completely) clean the Kalamazoo. The current price tag is $1.21 billion (and rising), making it the most expensive onshore oil spill in U.S. history.” – RS]
Remember the Kalamazoo
Five years ago, a pipeline spilled a million gallons of tar sands crude into a Michigan river—and we’re still cleaning it up.
By Brian Palmer, July 22, 2015
Skimmers, like these used to clean up the Deepwater Horizon spill, were useless in Kalamazoo, where the tar sands crude sank to the bottom. Photo: NOAA
Five years ago, in the middle of the night, an oil pipeline operated by Enbridge ruptured outside of Marshall, Michigan. It took more than 17 hours before the Canadian company finally cut off the flow, but by then, more than a million gallons of tar sands crude had oozed into Talmadge Creek. The oil quickly flowed into the Kalamazoo River, forcing dozens of families to evacuate their homes. Oil spills of that magnitude are always disastrous, but the Kalamazoo event was historically damaging.
The first challenge was the composition of the oil. Fresh tar sands crude looks more like dirt than conventional crude—it’s far too thick to travel through a pipeline.
Try pumping this through a pipeline. Photo: Suncor
To get this crumbly mess to flow, producers thin it out with the liquid constituents of natural gas. Diluted bitumen, or dilbit, as it’s called in the tar sands industry, is approximately three parts tar sands crude, one part natural gas liquids.
When dilbit gushed into Talmadge Creek in 2010, the mixture broke apart. The volatile natural gas liquids vaporized and wafted into the surrounding neighborhoods. The airborne chemicals were so difficult to find and eliminate that Enbridge decided it would be better to simply buy some of the homes that were evacuated, preventing the residents from ever returning.
The tar sands oil, which stayed in the water, presented an even bigger chemistry problem. Most forms of oil, including conventional crude, are less dense than water. That’s why oil makes such pretty colors when dropped into a rain puddle—it floats and plays tricks with the sunlight. Traditional oil spill cleanup technology relies heavily on this density relationship. Skimmers and vacuums remove it from the surface. Floating booms prevent surface-level oil from moving into environmentally sensitive areas.
Tar sands crude behaves differently. “Tar sands bitumen is a low-grade, heavy substance,” says Anthony Swift, director of NRDC’s Canada Project (disclosure). “Unlike conventional crude, when bitumen is released into a water body, it sinks.” (See “Sink or Skim,”onEarth’s infographic on why tar sands oil is more difficult to clean up than conventional crude.)
Skimmers, like these used to clean up the Deepwater Horizon spill, were useless in Kalamazoo, where the tar sands crude sank to the bottom. Photo: NOAA
Put simply, the spilled dilbit traveled in every direction—into the air, with the current, to the bottom of the river—at the same time. The U.S. Environmental Protection Agency’s indisputably naïve response reveals how little anyone knew about tar sands crude. The EPA demanded that Enbridge remove the oil from wetlands surrounding the pipe by August 27, a little more than one month after the spill began. The agency wanted the stuff out of the creek, river, and shorelines by the September 27. Those deadlines would have been practical for a typical spill—but not for a tar sands oil spill. A half-decade later, some of the oil still remains—though, much of that has to do with Enbridge botching the cleanup effort (see onEarth’s three-part series, “The Whistleblower”).
Enbridge’s bungling began even before the spill. First, the company knew the pipeline was vulnerable by 2005, if not earlier. When the rupture finally came in July 2010, operators dismissed the alarms as a malfunction of the system for 17 hours before finally accepting that the pipeline had failed. Making things worse, six hours after Calhoun County residents were complaining to 911 about the smell of oil, Enbridge employees were still trying to fix the problem by pumping additional oil into the pipeline. In its review of the accident, the National Transportation Safety Board faulted Enbridge’s “culture of deviance” for what happened, pointing out that the response team in the first hours consisted of four local pipeline maintenance employees who were inadequately trained and made a series of bad decisions.
Not only did Enbridge fail to make the EPA’s initial cleanup deadline, it also blew through a series of fallback deadlines across more than four years. Not until late 2014 did the agency finally sign off on the remediation effort, handing the remaining responsibilities to the Michigan Department of Environmental Quality.
As the cleanup winds down, though, there is little cause for celebration. “The Kalamazoo River still isn’t clean,” says Swift. “The EPA reached a point where additional cleanup might do more harm than good. Much of the river is still contaminated.”
Some local residents accuse the company of overstating its progress. “In the process of beautifying everything and giving money to everybody and making everybody feel good about it, they’re not really telling people about the dangers still there in that water,” says Linda L. Cypret-Kilbourne of Michigan’s Potawatomi tribe.
It’s not clear when the river will go back to pre-spill quality. After conventional oil spills, crews eventually back off and allow microbes to break down the last bits of crude. That approach isn’t a good option in Kalamazoo. First, the area doesn’t have a large natural population of oil-eating microbes like the Gulf of Mexico has. In addition, tar sands crude contains very high levels of heavy metals, which don’t break down easily.
Let’s not forget how much it cost to (not completely) clean the Kalamazoo. The current price tag is $1.21 billion (and rising), making it the most expensive onshore oil spill in U.S. history.
“ The Kalamazoo River still isn’t clean. The EPA reached a point where additional cleanup might do more harm than good. Much of the river is still contaminated. ”
It’s tempting to dismiss the slow, botched, expensive, and still-unfinished cleanup as growing pains. Tar sands imports have risen significantly since 2010, as has public awareness of the difference between the Canadian crude and the conventional product. In the five years since the incident, we should have improved tar sands oil spill response. But we didn’t.
If another Enbridge spill were to happen tomorrow, the company might respond more quickly, but huge volumes of heavy tar sands crude would still pour out of the pipeline. David Holtz of the Michigan chapter of the Sierra Club told reporters that a rupture in Enbridge Line 5, another pipeline that runs through Michigan, would be disastrous.
“If they hit the shutoff valve immediately after a rupture, there would still be more than 650,000 gallons of oil spilled into the Great Lakes,” he said.
Cleaning it up would be as challenging today as it was five years ago. There have been no technological breakthroughs since 2010. The tar sands industry should accept a large portion of the blame for this stasis.
“The efforts to improve spill response have been caught up in a public relations war,” says Swift. “The tar sands industry wants you to believe that oil is oil, and that its product involves no heightened concerns. As a result, spill responders are working with largely the same tools today as in 2010.”
Tar sands pipelines—like the one operated by Enbridge, or TransCanada’s proposed Keystone XL pipeline—run for thousands of miles, crisscrossing the United States and Canada in elaborate networks. They entail certain risks, and those risks are not going away. We have to decide how to respond. If we accept them, we must work to minimize the consequences by developing the appropriate safety measures and technology. Or we can reject them by eliminating tar sands from our energy infrastructure. The one thing we must not do is to pretend they don’t exist. The Kalamazoo spill is a reminder. It won’t be the last.
You must be logged in to post a comment.