Keystone XL survived politics but economics could kill it

[Yo_Mama_Been_Loggin]

LINCOLN, Neb. — The proposed Keystone XL pipeline survived nine years of protests, lawsuits and political wrangling that saw the Obama administration reject it and President Donald Trump revive it, but now the project faces the possibility of death by economics.

Low oil prices and the high cost of extracting Canadian crude from oil sands are casting new doubts on Keystone XL as executives with the Canadian company that wants to build it face the final regulatory hurdle next week in Nebraska.

The pipeline proposed in 2008 has faced dozens of state and federal delays, many of them prompted by environmental groups who ultimately persuaded President Barack Obama to deny federal approval in November 2015. President Donald Trump resuscitated the project in March, declaring that Calgary-based TransCanada would create "an incredible pipeline."

After all that, a TransCanada executive raised eyebrows in the energy industry last week when he suggested that the pipeline developer doesn't know whether it will move forward with the project. Paul Miller, an executive vice president who is overseeing the project, told an investor call that company officials won't decide until late November or early December whether to start construction.

"We'll make an assessment of the commercial support and the regulatory approvals at that time," Miller said in the conference call Friday with investors.

http://www.msn.com/en-us/money/markets/keystone-xl-survived-politics-but-economics-could-kill-it/ar-AApkRRm?li=BBnbfcN&ocid=edgsp

[Sen. Walter Sobchak]

1. It comes down to whether or not refiners on the Gulf Coast retool or not

The refineries on the Gulf Coast have been equipped for heavy crude for about the last sixty years, retooling to use lighter feedstock is a massive commitment. If the export ban had stayed in place there would have been better odds for a major shift in preference.

[mr_lebowski]

2. So, Tar Sands is LIGHTER than what teh Gulf Refineries are used to/tooled for?

I'd never heard 'things' explained quite like that ...

I'm not questioning you, just wondering what the chemistry involved is? I think I know what 'sweet' means ... low sulfur content ... but what's the diff. between 'light' and 'heavy'? And why is are teh Gulf refineries tooled for 'heavier' than 'tar sands'?

BTW ... 'what, waving the fucking gun around?'

[Sen. Walter Sobchak]

3. No, it's an acceptable substitute for heavy caribbean crude they have used for decades

Precisely how light or heavy (although it is always heavy) it is depends on what it is diluted with and is a function of refiner preference and simply what is available and whether the refiner is going to extract the diluent or not.

The refineries began using heavy caribbean crude, primarily from Venezuela because it was cheap and production from the mature oil fields in Texas began to decline in the late 1950's and the cost of drilling new wells skyrocketed. When Venezuela collapsed Alberta stood at the ready - however oil derived from the oil sands has been exported to the US for fifty years.

US refiners need to get out their crystal balls and decide whether to adapt to the new light crude that is available because of the fracking boom or to persist with heavy crude. The appeal of sticking with heavy crude is the Canadian product is cheaper but that is largely because Canada lacks the infrastructure to export much to anyone other than the US.