Tag Archives: Tar sands crude

Alberta’s possible pivot to the left alarms Canadian oil sector

Repost from Reuters

Alberta’s possible pivot to the left alarms Canadian oil sector

By Scott Haggett and Nia Williams, May 4, 2015 7:07am EDT
Alberta NDP Leader Rachel Notley meets with Mayor Naheed Nenshi in his office in Calgary, Alberta, April 30, 2015. REUTERS/Todd Korol

(Reuters: CALGARY, Alberta) – Canada’s oil-rich province of Alberta is on the cusp of electing a left-wing government that can make life harder for the energy industry with its plans to raise taxes, end support for key pipeline projects and seek a bigger cut of oil revenues.

Polls suggest Tuesday’s election is set to end the Conservative’s 44-year reign in the province that boasts the world’s third-largest proven oil reserves and now faces recession because of the slide in crude prices.

Surveys have proven wrong in Canadian provincial elections before and voters may end up merely downgrading the Conservatives’ grip on power to a minority government.

Yet the meteoric rise of the New Democratic Party and the way it already challenges the status-quo of close ties between the industry and the ruling establishment has alarmed oil executives. The proposed review of royalties oil and gas companies pay the government for using natural resources and which could lead to higher levies, is a matter of particular concern.

“Now is not the time for a review of oil and natural gas royalties,” Tim McMillan, president of the Canadian Association of Petroleum Producers, the country’s top oil lobby, said in a statement.

A 2007 increase in the levy was rolled back when the global financial crisis struck and oil executives say today the time is equally bad to try it again.

Yet the left’s leader Rachel Notley, a former union activist and law school graduate, has shot up in popularity ratings in the past months advocating policies that have been anathema for many conservative administrations.

She says she would not lobby on behalf of TransCanada Corp’s controversial Keystone XL pipeline or support building of Enbridge Inc’s Northern Gateway pipeline to link the province’s oil sands with a Pacific port in British Columbia. Citing heavy resistance from aboriginal groups to the Enbridge line, Notley says Alberta should back those that are more realistic such as TransCanada’s Energy East pipeline to the Atlantic ocean.

PACKING UP?

Notley also advocates a 2 percentage point rise in Alberta’s corporate tax rate to 12 percent to shore up its budget that is expected to swing from a surplus to a C$5 billion deficit in 2015/2016 as energy-related royalty payments and tax revenues shrink.

Even with the proposed corporate tax hike Alberta’s overall taxes would remain the lowest nationally. Oil executives warn, however, that any new burdens at a time when the industry is in a downturn, shedding jobs and cutting spending, could prompt firms to move corporate head offices out of the province.

“Business is mobile,” said Adam Legge, president of the Chamber of Commerce in Calgary where most of Canada’s oil industry is based. “Capital, people and companies move.”

Ironically, the challenge the oil industry and the Conservatives face is in part a by-product of Alberta’s rapid growth fueled by the oil-sands boom.

The influx of immigrants from other parts of Canada and overseas has changed the once overwhelmingly white and rural province. Today Alberta is one of the youngest provinces and polls show younger and more diverse population is more likely to support left-wing causes such as environment and education and more critical of big business. The New Democratic Party still only got 10 percent of the votes in the 2012 vote, but an election of a Muslim politician as a mayor of Calgary in 2010 served as an early sign of the changing political landscape.

The Conservatives themselves and their gaffe-prone leader Premier Jim Prentice also share the blame for the reversal of fortunes with one poll showing them trailing the left by 21 percent to 44 percent.

Prentice angered voters when he told Albertans to “look in the mirror” to find reasons for the province’s fiscal woes and then passed a budget in March that raised individual taxes and fees for government services but spared corporations.

Scandals – Prentice’ s predecessor left last year because of a controversy over lavish spending – and blunders added to the party’s woes.

The NDP vaulted to the top of the polls after Notley’s strong performance in an April 23 televised debate, when Prentice, former investment banker, drew fire for suggesting his rival struggled with math.

Then there is voter fatigue with a party seen as too comfortable and scandal-prone after decades in power.

“It’s still the same gang, the same policy, same procedures, the same concept of entitlement,” said one executive at a large oil and gas producer who declined to be named because he is not authorized to talk to the media. “I know some extremely neo-conservative guys who have said enough is enough.”

(Additional reporting by Julie Gordon in Vancouver and Mike De Souza in Ottawa; Editing by Amran Abocar and Tomasz Janowski)

How the State Department secretly approved a major tar sands expansion

Repost from DeSmogBlog
[Editor:  Sign the CREDO petition opposing the Enbridge expansion scheme.  – RS]

Emails: How State Department Secretly Approved Expanding Piece of Enbridge’s “Keystone XL Clone”

By Steve Horn, April 20, 2015 – 03:58

DeSmogBlog has obtained dozens of emails that lend an inside view of how the U.S. State Department secretly handed Enbridge a permit to expand the capacity of its U.S.-Canada border-crossing Alberta Clipper pipeline, which carries tar sands diluted bitumen (“dilbit”) from Alberta to midwest markets.

The State Department submitted the emails into the record in the ongoing case filed against the Department by the Sierra Club and other environmental groups in the U.S. District Court for the District of Minnesota. Collectively, the emails show that upper-level State Department officials hastened the review process on behalf of Enbridge for its proposed Alberta Clipper expansion plan, now rebranded Line 67, and did not inform the public about it until it published its final approval decision in the Federal Register in August 2014.

According to a March 17, 2014 memo initially marked “confidential,” Enbridge’s legal counsel at Steptoe & Johnson, David Coburn, began regular communications with the State Department on what the environmental groups have dubbed an “illegal scheme” beginning in at least January 2014.

Enbridge State Department Emails
Enbridge State Department Emails | Image Credit: U.S. District Court for the District of Minnesota

Environmental groups have coined the approval process an “illegal scheme” because the State Department allowed Enbridge to usurp the conventional presidential permit process for cross-border pipelines, as well as the standard National Environmental Policy Act (NEPA) process, which allows for public comments and public hearings of the sort seen for TransCanada’s Keystone XL pipeline.

Further, the scheme is a complex one involving Enbridge’s choice to add pressure pump stations on both sides of the border to two pipelines, Enbridge Line 3 and Enbridge Line 67, to avoid fitting under the legal umbrella of a “cross-border” pipeline.

Hastening the approval process — and thus dodging both the conventional presidential permit and NEPA process — came up in a June 6, 2014 memo written by Coburn and his Steptoe co-counsel Josh Runyan. Enbridge’s legal argument centered around ensuring profits for its customers “consistent with its obligations as a common carrier.”

State Department Enbridge Emails
Image Credit: U.S. District Court for the District of Minnesota

“Wrap This Up…Running Out of Time”

On March 18, 2014, Ona Hahs, Attorney-Advisor for the State Department’s Office of the Legal Advisor, informed her Department colleagues in an email that “we have to wrap this up” because she was informed by Coburn that Enbridge was moving forward with the project and about to break ground on it.

State Department Enbridge Emails
Image Credit: U.S. District Court for the District of Minnesota 

Just over a week later on March 27, 2014, Hahs emailed her colleagues again, informing them that Coburn had just called her again and they were “running out of time” to offer Enbridge what it requested.

State Department Enbridge Emails
Image Credit: U.S. District Court for the District of Minnesota

A month later, Robert Cekuta — then Deputy Assistant Secretary of State for the State Department’s powerful and industry-friendly Bureau of Energy Resources (BER) and now U.S. Ambassador to oil-soaked Azerbaijan — wrote a memo on April 24, 2014 to former BER head Carlos Pascual recommending approval of the “illegal scheme.” 

Pascual now serves as a non-resident Fellow at the Columbia University Center on Global Energy Policy, which many suspect is funded by the oil and gas industry, but the Center does not disclose its funding sources. Pascual signed his “CP” initials on the “approve” line, meaning Enbridge’s project had the State Department seal of approval.

State Department Enbridge Emails
Image Credit: U.S. District Court for the District of Minnesota

Though officially written by Cekuta, the bottom of the memo indicates it was drafted by both Hahs and Michael Brennan. Before serving in various capacities for the State Department beginning in 2003, Brennan worked for Shell Oil as its Manager for Export Sales Business Development in Asia and Latin America, according to his LinkedIn profile.

Later that same day, Brennan fired an email off to Coburn informing him of the State Department approval decision.

“Keystone XL Clone” Precedent Cited

In the June 6 memo penned by Enbridge’s counsel, its attorneys explained why “interconnections on Line 67 can take place in advance of the U.S. Department of State’s issuance of the Supplemental Environmental Impact Statement (‘SEIS‘) and the requested Presidential Permit to authorize Enbridge to operate the border segment of Line 67 at its design capacity of 880,000 barrels per day.”

Among the myriad legal cases cited in the memo, Coburn and Runyan pointed to the Sierra Club, et al v. U.S. Army Corps of Engineers case reported on by DeSmogBlog, which Enbridge argued and won as a defendant.

Coburn and Runyan wrote that the Sierra Club v. Army Corps of Engineers case rejects the legal “argument that construction of pipeline outside the area of federal permitting jurisdiction could be [prohibited] pending NEPA review.”

Because construction of the pump stations and interconnections are not occurring within the border segment of Line 67, and are independent from the Line 67 border capacity expansion…this activity is not required to await the completion of the SEIS,” they wrote.

That case, like the current one, centered around NEPA.

In that one, the U.S. Army Corps of Engineers handed Enbridge a controversial Nationwide Permit 12 permit to build its now-operational Flanagan South pipeline, which Sierra Club argued circumvented the NEPA process. It appears that case set an important legal precedent.

Flanagan South connects to Alberta Clipper in Flanagan, Illinois and ends in Cushing, Oklahoma via a connection to the Seaway Twin pipeline, which Enbridge co-owns with Enterprise Products Partners. From there, the heavy tar sands dilbit is taken to Gulf coast refineries, the same ones TransCanada’s Keystone pipeline system currently feeds into.

Together, all three pipeline pieces make up what DeSmogBlog has called the “Keystone XL Clone” pipeline system.

“Stand Down”

Asked about the emails, Doug Hayes, the Sierra Club attorney working on the U.S. District Court of Minnesota case, wrote in an email to DeSmogBlog that he thinks the State Department is essentially partaking in a dereliction of duty.

“There is absolutely no question that the State Department has the authority to tell Enbridge to stand down and follow the process that was always intended,” wrote Hayes. “The State Department is just not taking its presidential permitting responsibilities seriously and letting Enbridge call the shots.”

Neither representatives from Enbridge, the Steptoe & Johnson attorneys nor the State Department officials involved in the behind-the-scenes permitting of the “illegal scheme” responded to requests for comment sent by DeSmogBlog.

A hearing is scheduled for September 10 at the U.S. Courthouse in Minneapolis, Minnesota for the environmental groups’ Motion for Partial Summary Judgment, which was submitted on April 6.

 

NRDC Attorney: The tar sands invasion that can be stopped

Repost from NRDC Switchboard, Danielle Droitsch’s Blog

The tar sands invasion that can be stopped

Danielle Droitsch
Danielle Droitsch, senior attorney with NRDC, Canada Project Director, International Program.

By Danielle Droitsch, April 28, 2015

Many across the United States are aware of the tar sands threat posed by the proposed Keystone XL pipeline but what many may not know is the U.S. faces a looming threat that is bigger than just this one pipeline. We call it a tar sands invasion. The plan would be to complete a network of pipelines (both new and expanded), supertankers and barges, and a fleet of explosive railway tank cars. What is at risk? San Francisco Bay, Puget Sound, the Great Lakes, the Hudson River and other places we all call home. While the threat of this invasion is already here with the proposed Keystone XL pipeline, the good news is that citizens across North America are rising up to respond and repeal the assault with a clear message: Not by pipeline, not by rail, not by tanker. The good news is that public opposition to tar sands oil is rising and projects like Keystone XL and Northern Gateway have been delayed. The tar sands assault is not inevitable. In fact, the U.S. doesn’t need this dirty form of fuel and neither does Canada. The time has come to limit tar sands expansion in favor of a cleaner and brighter energy future.

Tar Sands Invasion Map 4-27-15.jpg

A new report released by NRDC reveals that the amount of tar sands crude moving into and through the North American West Coast could increase by more than 1.7 million barrels per day if industry proposals for pipelines, tankers and rail facilities move forward. For more information about this new information see posts by my colleagues Anthony Swift and Josh Axelrod. Why the west coast? With the majority of the world’s heavy oil refinery capacity, the United States including the west coast is a critical market for the tar sands industry. To be clear, Keystone XL still remains at the heart of the industry plan to expand tar sands and gain access to the global market. But industry is still pushing hard for other ways to expand especially as KXL flounders. It is important to keep in mind the tar sands industry – which currently produces about 2 million barrels per day (bpd) – plans to triple production to exceed 6 million bpd in the next fifteen years. The oil industry has made clear it needs all of its rail and pipeline proposals to achieve its massive production goals.

We know that the tar sands industry and Canadian government has long had a plan to quadruple or more tar sands extraction in Canada. KXL has always been a huge part of that. But it is now very clear that they also plan to access the U.S. and global market through every means possible.

This threatened invasion puts our communities, waters, air and climate in jeopardy. The Tar Sands Solutions Network has done an outstanding job outlining many of the different campaigns that are emerging across North America. This plan threatens to expose communities from California to New York to health, safety and environmental risks unless the public rallies to stop it. Here are some of the specific impacts that North America faces as a result of the tar sands invasion:

  • Across the West Coast, tar sands laden tanker and barge traffic could increase twenty-five fold, with a projected 2,000 vessels along the Pacific West Coast– including the Salish Sea and the Columbia River–shipping nearly two million barrels of tar sands crude every day.
  • A dozen proposed rail terminals would substantially increase tar sands by rail traffic going through densely populated American citizens like Los Angeles and Albany New York risking explosive derailments of hazardous crude unit trains
  • Nearly a million barrels of tar sands would be destined for California and Washington refineries, exposing fenceline communities in Anacortes, San Francisco and Los Angeles to increasing toxic air pollution.
  • In the Midwest, the pipeline company Enbridge is moving to nearly double the flow of tar sands moving through the Great Lakes region, an area that already has suffered from a 2010 spill of more than 800,000 gallons of the tar sands into the Kalamazoo River in Michigan sending hundreds of residents to the hospital. Four years later, the cleanup, which has cost more than $1 billion, is still unfinished.
  • On the East Coast, the tar sands industry is seeking to build the Energy East pipeline across Canada. The pipeline would run from Alberta east across Canada to New Brunswick and Quebec, carry 1.1 million barrels of tar sands oil per day and require hundreds of oil tankers traveling along the East Coast and Gulf Coast annually, through critical habitat of the extremely endangered Right Whale.
  • In Albany, New York, a proposed oil transfer facility could lead to the shipment of tar sands oil on barges down the Hudson River or rail cars along the river destined for facilities in the New Jersey and Philadelphia areas.
  • In Maine, Vermont, and New Hampshire, the constant threat of a proposed reversal of the aging Portland-Montreal Pipeline is likely to arise again as Enbridge completes work on a pipeline reversal that will connect the tar sands directly to Montreal this summer.
  • This network of pipelines will feed refineries that produce millions of tons of hazardous petroleum coke waste – known as “petcoke” – which are piling up in residential neighborhoods like Chicago.
  • In Canada, pipeline companies are trying to access the west and east costs with pipeline proposals that would ship the heavy tar sands oil across pristine landscapes in British Columbia or across the Prairies into Ontario and Quebec. Communities are raising concerns about the threat of a spill to waters from the pipeline or tankers leaving the Bay of Fundy of the Gulf of St. Lawrence.
  • And last but not least, communities in Alberta at ground zero have been facing the enormous consequences of tar sands development which has brought about significant contamination of water, air, and land. Increasingly, there are calls for a moratorium on development.

Targeting at risk communities

The tar sands invasion puts a high toll on low-income and aboriginal communities located in railway corridors, near oil refineries, and next to petcoke waste sites. In refinery fence-line communities, emissions associated with tar sands are suspected to be even more detrimental to human health than existing harmful emissions from conventional crude. Derailments of tar sands unit trains – mile long trains carrying over a hundred tankers full of explosive tar sands crude – pose a catastrophic risk for communities throughout the country. And as more tar sands oil is refined in the United States, the public will also face increased health and environmental risks from massive piles of petroleum coke, a coal-like waste full of heavy metals that results from tar sands oil refining and can cause serious damage to the respiratory system.

Industry would like for you to believe that tar sands development is inevitable and there is nothing that can be done. Wherever they turn today they are being faced with public opposition. Expansion is not inevitable, especially because of this growing and formidable opposition.

A climate problem

It is clear that tar sands reserves – some of the world’s most carbon intensive – are at the top of the list of reserves that must remain in the ground. Mounting scientific and economic analysis shows that the tar sands industry’s proposed expansion plan is incompatible with global efforts to address climate change. The Intergovernmental Panel on Climate Change (IPCC) concludes that 75% or more of discovered fossil fuel reserves must remain in the ground in order to limit warming to the international two degrees Celsius goal. The clear inconsistency between tar sands expansion and efforts to address climate change have made opposition to tar sands expansion projects a clear rallying point for a broad group of allies advocating for action on climate.

A water problem

A tar sands spill from train, pipeline, or tanker could devastate local economies, pristine wilderness, harm human health, and lead to an especially costly and challenging cleanup. Tar sands spills have proven more damaging than conventional spills, as heavy tar sands bitumen sinks below the water surface making it difficult to contain or recover. A spill from shipping the tar sands crude could devastate communities, contaminate freshwater supplies or marine habitats and damaging local economies.

Undermining efforts to grow our clean energy economy

The growing exploitation of Alberta’s tar sands threatens to undermine North American efforts to build a clean energy economy and combat global climate change. Because most tar sands crude is destined for the United States, its expansion would create a greater dependence on the world’s dirtiest crude oil and undermine our transition to environmentally sustainable energy and a cleaner transportation fleet. Responding to the tar sands invasion will require solutions reduce fossil fuel use and spur low-carbon transportation and energy solutions such as broadened electric vehicle use and development of renewable and clean fuels.

This tar sands invasion can be stopped: Clean Transportation Solutions

The good news is this tar sands invasion can be stopped starting with leadership from government officials to embrace climate and sustainable transportation solutions. NRDC’s report for the west coast outlines detailed recommendations for decision-makers at all levels. The first step is for decision-makers at all levels to become familiar with the unique issues associated with tar sands oil and then to actively identify the full range of solutions to confront this problem. Without action, the U.S. will unintentionally become a thoroughfare for this oil undermining climate policies and presenting risks to communities and water. With support for regional clean energy policies, we can prevent the influx of tar sands crude and build the green infrastructure and public support necessary to begin transitioning to a clean energy economy.

Video: Stop Oil Trains in California

Repost from email by Ethan Buckner, Forest Ethics

For the past few years, momentum is building all along communities throughout California concerned about the growing threat of oil trains. ForestEthics, in partnership with filmmaker Bunker Seyfert, is excited to share this new short piece highlighting the campaign to stop the proposed Phillips 66 oil train terminal in San Luis Obispo County.
Please watch and share!  – Ethan Buckner, US Organizer, ForestEthics

Stop #OilTrains in California

California could be the site of the next oil train disaster, unless we take action now at ProtectSLO.org.

Multinational oil company Phillips 66 is proposing to expand its San Luis Obispo County refinery to receive oil trains carrying explosive, toxic, and carbon-intensive tar sands oil. If approved, more of these oil trains will begin rolling through California’s communities, threatening schools, homes, community centers, and parks. Over 5 million California residents live in the oil train blast zone.

The San Luis Obispo County Planning Commission and Board of Supervisors will make the final decision on this project, and they need to hear from us – residents of SLO County and other impacted California communities. Take action now and tell SLO County decision makers to reject this dangerous project.

Take action now at ProctetSLO.org.