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"Excess" US Refinery Products Need To Be Exported

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"Excess" US Refinery Products Need To Be Exported

Unread postby ROCKMAN » Fri 31 May 2013, 14:23:27

This thread touches on several others we’ve been bouncing around. We’ll see if this one has the legs to run for a while. Some POTENTIAL dot connecting as I see it. The most important dot to appreciate IMHO: any foreign oil shipped to the US can be re-exported to another country. This is already going on at a very small scale with oil being sent from the US to China. This is not US policy but LAW. Not 100% sure but I believed it’s linked to US trade agreements with other countries and, as such, might be very difficult to alter IMHO. So if oil from the Canadian oil sands, which may belong to a Chinese company, is pipelined to the Texas Gulf Coast it could be shipped to China via the Panama Canal. Which is currently undergoing expansion to handle the very large tankers.

Now refined products: if the oil that is shipped into the US is owned by a foreign company and is then run thru a refinery that is also owned by foreign companies but happens to be located in Texas, it would seem logical that those products could be shipped out of the US to any other country the refinery choses. Of course, this refers to the Motiva refinery in Port Arthur, Texas, which is owned jointly by Royal Dutch Shell and Saudi Arabia. A refinery that was redesigned (in the largest upgrade in the history of the country) specifically to handle Saudi and Canadian oil sand production. They did initially stumble by having some piping issues but those have been fixed for the most part. Of course, shipping oil into the US and refining it is one thing. You still need the facilities to ship those products out of the country. So from: http://www.downstreamtoday.com/news/art ... a_id=39668

Enterprise Unveils Plans for Texas Refined Products Export Facilities

“Enterprise Products Partners Thursday announced the partnership is developing two refined products export facilities to meet the growing demand for additional refined products export capability on the United States Gulf Coast. By utilizing Enterprise’s existing refined products pipeline, storage and terminal facilities in southeast Texas, Enterprise will provide customers with significantly improved access to its marine facilities at its ports in Beaumont, Texas and on the Houston Ship Channel. Export service at the Beaumont marine terminal will initially handle Panamax size vessels and is expected to begin service in the first quarter of 2014, followed in mid-2014 by its expanded marine terminal on the Houston Ship Channel that will be initially sized to handle up to Aframax class vessels.”

And where have they been shipping products to?

“Enterprise has traditionally served as a feeder system which delivers refined products to the Midwest. Over the past year, Enterprise has repurposed its Southern Complex in order to increase supply and market access, system flexibility and capacity. Storage capacity at the partnership’s Southern Complex facilities has more than doubled to approximately 12 million barrels; key pipeline segments serving major refining centers have been made bi-directional; and new interconnects provide access to major, third party interstate pipeline systems. The Southern Complex is directly connected for refined product receipts from the Colonial Pipeline and 10 refineries in southeast Texas, representing 3.3 million barrels per day of refining capacity. In addition, the Southern Complex offers access to three interstate pipelines and one intrastate pipeline. Enterprise’s Southern Complex provides its customers with enhanced flow assurance and market choices.” Key words IMHO: repurpose; flexibility; bi-directional; new interconnects; market choices.

IOW they have a great flexibility to ship up to 3.3 million bbls of product every day to whoever can pay the max price. Maybe consumers in NYC, Kansas City or maybe in Beijing.

“We are excited to announce our vertical integration into refined products export services,” said Michael A. Creel, chief executive officer of Enterprise’s general partner.” Key words IMHO: “vertical integration”. If you aren’t familiar with that biz model you might want to research it.

“This expansion is driven by the tremendous growth of U.S. crude oil production from the development of the shale plays coupled with an increase in Gulf Coast refining production and strong international demand for U.S. refined products.

And despite this tremendous growth we still import more than 6 million bopd. So what exactly does increased domestic production have to do with exporting product? Oh..yeah: "...an increase in Gulf Coast refining production and strong international demand...". Now I understand...the increased US oil production has nothing to do with exporting product.

"In five short years, the United States has transitioned from importing approximately 1 million barrels per day (“MMBbls/d”) of refined products in 2007 to exporting more than 1 MMBbls/d in 2012, with most of these exports supplied by refineries on the Gulf Coast. I would like to congratulate our commercial, engineering and operations team for the development of this capital efficient plan to repurpose and expand existing facilities including the reactivation of our marine facility in Beaumont.” There's that little word again: repurpose. Maybe it's like "re-gifting" our products and sending them to China for Christmas?

IOW: Don’t worry folks: watch my left hand with all that excess Bakken/Eagle Ford oil we have and the oversupply of products that have “forced” us to export that excess. It has nothing to do with the POD and the increasing value of products on the international market. A market that the new export facilities and a wider canal will allow greater access to. No need to pay any attention to my right hand with that imported oil being turned into products that are being shipped out of the country. Even as an oil patch insider that sort of spin irritates me some. But I guess they don’t have the nerve to tell the American people the plan is to put our consumers in more direct completion with foreign consumers. After all, we're trying to do it with NG so why not refined products. We may still get all those products for ourselves…as long as we’re willing to outbid those other new potential buyers.

You don’t think the potential of all those Chinese refinery JV’s to eventually remove product from the international market is a factor in this export expansion? Naa…just a coincidence I’m sure.
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Re: "Excess" US Refinery Products Need To Be Exported

Unread postby C8 » Fri 31 May 2013, 16:38:42

Why don't the Canadians just build their own refineries, cut out the middleman, and ship direct to China?
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Re: "Excess" US Refinery Products Need To Be Exported

Unread postby ROCKMAN » Fri 31 May 2013, 18:39:06

C8 – You must have missed my earlier post:

“British Columbia newspaper publisher David Black said China’s largest bank has agreed to provide financial backing for his proposed Kitimat-based heavy oil refinery. The refinery would cost $25-billion to build and all its output would be sold to Asian markets, Mr. Black said in a statement Thursday.

Mr. Black’s company, Kitimat Clean Ltd., and the Industrial and Commercial Bank of China (ICBC) signed a memorandum of understanding in which ICBC agreed to be the refinery’s Chinese financial advisor and cooperate in financing it and associated pipelines. Chinese companies will be involved in the engineering and construction of the refinery, but ownership will remain in Canadian hands, Mr. Black said in the statement. He also said the refinery will prevent the shipment of bitumen in tankers off B.C.’s coast. Tankers will instead be loaded with product."

So a fair bit of oil sands production many assumed would be sold to US refiners won’t be. Similar to how many folks assume that a lot DW Brazil oil production would make it to our refineries. BTW the Chinese will be helping them also to build out their refinery infrastructure. Getting’ easier to connect those dots now? LOL

BTW: have you heard about the 50,000 bbls per day Eagle Ford oil that will be heading to eastern Canada refineries?

dot…dot…dot…dot
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Re: "Excess" US Refinery Products Need To Be Exported

Unread postby C8 » Fri 31 May 2013, 19:43:30

Thanks Rock- Its amazing how little you hear about resource nationalism from US politicians. Yeah, there is somebody here and there, but the big dawgs don't talk it much. Globalization has become the sacred cow of US politics- we will be looking at $7 a gallon gas and being told that its best for the nation to export. I am not a nationalist BTW- just old enough to remember back in the 70' and 80's when you heard so many mainstream politicos talking about American oil for Americans (substitute steel, corn, whatever for oil). That meme seems to be totally dead, its an incredible triumph of big money over grassroots populism really. I guess everything is media Astroturf these days, I can't find major grassroots anywhere- not real people- just media zombies barking talking points.

I went to the store today and was really stunned by the price of food items. The farmer sells to the Chinese too and I guess we have to pay more for it- not even our own nation anymore- just a collection of international businesses. I am old enough to remember when people generally regarded America as being for Americans. If you are not from that time I guess it would be hard to understand. Not saying its totally bad- I understand the benefits also- but man is it different. Over half of the people in the world live in Asia, if they get richer and richer and keep bidding up our own stuff and buying it than the average American is going to become much poorer as his paycheck sits still while prices rise. Nothing unnerves me like rising food prices- cause you gotta eat. And no real resource nationalism talk from big politicos. Its a different world from when I grew up. I guess we're not really a country anymore- just individuals in the same place.
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Re: "Excess" US Refinery Products Need To Be Exported

Unread postby Loki » Fri 31 May 2013, 20:31:18

ROCKMAN wrote:So if oil from the Canadian oil sands, which may belong to a Chinese company, is pipelined to the Texas Gulf Coast it could be shipped to China via the Panama Canal.

That's the whole plan for the Keystone pipeline, is it not? It was explicitly designed for export, not for domestic US use. A fact that pretty much all of its supporters conveniently ignored.

British Columbia newspaper publisher David Black said China’s largest bank has agreed to provide financial backing for his proposed Kitimat-based heavy oil refinery.
[/quote][/quote]
Yeah, good luck getting BC's cooperation with that.

Much like all the coal and LNG export terminals proposed for Oregon and Washington. We don't want them and folks are fighting tooth and nail to prevent them. One of the coal export terminals on the Oregon coast was recently taken off the table, thankfully, as the trains would have run less than a mile from where I live. Very few Oregonians supported it and many were vehemently opposed to it.

Of course, now they're talking about “repurposing” a proposed LNG import terminal, for which they already have some permits, into an export terminal. The only goal of this proposal is to make a very small coterie of people who don't live in Oregon even richer than they already are, while the rest of us will get to pay more for natural gas, and lots of Oregonians will be forced via eminent domain to have a pipeline punched through their land. I doubt it'll go anywhere, at least I hope so.
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Re: "Excess" US Refinery Products Need To Be Exported

Unread postby ROCKMAN » Fri 31 May 2013, 21:16:53

loki - "Yeah, good luck getting BC's cooperation with that." Actually all I've seen from BC politicians so far is fully giddy support. They want the jobs. It's a done deal AFAIK. I think I read that even one of the native tribes is partnered up on one of the smaller rprojects. As always: follow the money.
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Re: "Excess" US Refinery Products Need To Be Exported

Unread postby Loki » Fri 31 May 2013, 21:30:31

C8 wrote:Its amazing how little you hear about resource nationalism from US politicians. Yeah, there is somebody here and there, but the big dawgs don't talk it much. Globalization has become the sacred cow of US politics- we will be looking at $7 a gallon gas and being told that its best for the nation to export.

Yep, unfortunately. Neo-liberal globalist ideologies have really warped the public discussion. These ideas aren't even open to debate since both parties ascribe to them whole-heartedly.

I am not a nationalist BTW- just old enough to remember back in the 70' and 80's when you heard so many mainstream politicos talking about American oil for Americans (substitute steel, corn, whatever for oil).

I'm not old enough to remember that, but that's interesting. How widespread was the talk about “American oil for Americans”?

Re. food, your worries are justified. The best recent example is Argentina, which exported large quantities of food while there was widespread hunger, malnutrition, and even pockets of famine during their economic crisis. The BMJ reported in November 2002 that dozens of children had starved to death in the northern provinces (which also happen to be home to the major soy producers). It said these deaths “were the tip of the iceberg” and that malnutrition had affected 2 million Argentinian children. A World Bank study found that 17.5% of Argentinians had suffered hunger in 2002, and 6% had suffered “severe hunger.”

Meanwhile, Argentine was the fifth largest food exporter in the world. One researcher dubbed it the “Argentinean Paradox,” explaining how people can starve in the midst of abundance. China and the EU simply outbid poor folk in Argentina, aided and abetted by industry concentration.

A good reason to grow your own :wink:
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Re: "Excess" US Refinery Products Need To Be Exported

Unread postby ROCKMAN » Fri 31 May 2013, 21:38:10

C8 – easy to understand why US politicians don’t bring it up. Right now it’s mostly a theoretical problem down the road. And what mitigation efforts can they offer: The US National Oil Company buying pieces of foreign oil fields like China has been doing for the last 15 years? The US govt loaning me $25 billion to build a refinery in Washington state that can refine oil sands production? The US govt using its political powers to make our friendly neighbor to the south, Venezuela, sign long term supply contract with a Texas refinery like they’ve done with Chinese refineries? The US govt buying half of the Motiva refinery from the Dutch and Saudis? Maybe pass laws violating trade agreements with other countries?

It seems to be boiling down to a simple situation: US companies can’t compete with Chinese resources and political leverage and the US govt isn’t structured in such a way it can. What is President Obama going to do: call up the Canadian politicians and ask them to not send any oil sands products to other countries while explaining why he hasn’t signed the Keystone permit? That would be a rather uncomfortable conversation for the POTUS, eh?
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Re: "Excess" US Refinery Products Need To Be Exported

Unread postby ROCKMAN » Sat 01 Jun 2013, 10:08:59

More unintended consequences

Oil traders have quietly begun shipping U.S. crude oil from Texas to Canada, raising the ire of U.S. East Coast refiners who may pay four times as much for a similar voyage. In the latest oil trading trend to emerge from the unexpected boom in U.S. shale production, the firms have hired at least seven foreign-flagged tankers to run the route to Canada this year. U.S. refiners, however, are required by a shipping law from 1920 known as the Jones Act to use more costly U.S.-owned and operated ships if they want to tap into the oil bounty emerging from the Eagle Ford fields of Texas, highlighting the uneven playing field that is taking shape in the Atlantic basin.

The trend was highlighted on Monday by U.S. government data showing crude oil exports to Canada leapt to a 13-year high of 124,000 barrels per day, double rates from last year. Much of that was in the form of shipments by rail, pipeline or barge, which have been steadily rising for months. The latest such cargo is aboard the Everglades, which loaded a 500,000-barrel cocktail of light, sweet crude in Nederland, Texas late last week. The tanker is en route to the Come-by-Chance refinery in Newfoundland, which is now run by South Korea's national oil company. While the exports to Canada are perfectly legal (provided the exporter has a license from the U.S. Department of Commerce), they are shining a spotlight on a vexing market anomaly: one created not by gaps in energy infrastructure like the pipeline shortages that made winners out of Midwest refiners, but by a nearly century-old regulatory legacy.

COSTLIER GASOLINE: The Jones Act requires any voyage between U.S. ports to be on a U.S.-flagged, built and manned vessels. Supporters say it has protected U.S. maritime jobs since it was first introduced, and supported prices for owners of U.S.-flagged vessels. But only around three-dozen such tankers now exist, and most of those are already busy on routine routes. That leaves little spare capacity to exploit the new Gulf-to-East Coast voyage. The average cost for a Jones Act compliant vessel to sail from the Gulf Coast to the East Coast is around $70,000 a day, according to shipping sources, almost four times the $16,000 a day it costs for a foreign-flagged tanker sailing to Newfoundland, scarcely a day's longer journey. So even though fuel produced in Canada is shipped back to the east coast it competes pricewise against the more expensive products of US refiners allowing the Canadian refiners a higher profit margin even when the undercut domestic prices a tad to gain market share. It's estomated this situation is adding 10 to 15 cents per gallon to east coast consumers.

But as mentioned there’s a way to get around crude export restrictions: crack the crude here and ship the products overseas. And remember: those laws restrict the export of DOMESTICLY produced crude…not crude produced in another country and shipped through the US…like the Canadian oil sands production. Production of condensate from shale will reach almost 1 million barrels a day this year, 66 percent more than in 2010 and about 14 percent of total domestic oil output, according to RBN Energy LLC, an energy consultant in Houston. Exports of most crude grades are banned under 1970s laws and Valero Energy Corp. (VLO) and Kinder Morgan Energy Partners LP (KMP) are building refineries to process shale into products that can be shipped. And, as mentioned earlier, there are two major expansion of product export infrastructure going on in the Gulf Coast.

dots...dots...and more dang dots
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Re: "Excess" US Refinery Products Need To Be Exported

Unread postby americandream » Sat 01 Jun 2013, 18:12:15

C8 wrote:Why don't the Canadians just build their own refineries, cut out the middleman, and ship direct to China?


With Chinese manufacturing data exceeding expectations, international co-operation of capital will reach new heights. Also, we will increasingly see the emergence of a global culture which blurs national business arrangements as markets internationalise.
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Re: "Excess" US Refinery Products Need To Be Exported

Unread postby Oily Stuff » Sat 01 Jun 2013, 19:12:38

Excellent, Rockman; thought provoking to say the least. I adhere to principles of free enterprise and to idealism that allows American business to function in free markets. But I think that is an antiquated (and definitely polly anna) way of looking at the energy world we live in today and that will very soon change our way of lives forever. With regards to energy I too have become fiercely nationalistic.

If we had any kind of energy policy in this country it would fundamentally embrace conservation of our nation's resources for the future of our children and grandchildren. If for instance unconventional tight oil and tight gas resources are to be our savior in the US let us forgo the downsizing to 45 acre spacing and save some of it for down the road. I find it interesting that government, especially this particular administration, is not all over regulating the oil and gas industry, up and downstream, in the name of nationalism. Energy independence should equate to energy security. But if its going in the front door and out the back, where is the security in that?

The Saudi's are not stupid; there position regarding unconventional shale in the US must go something like...OK boys, you play with that expensive under the barrel stuff all you want over there; we'll cut back a little and then lets talk again in 5 years. Excuse me, you want to pay how much now for our oil? Your kidding, right?

Here in the US, for the sake of the almighty dollar, its make hay while the sun is shining and lets not worry about tomorrow. We'll find some more. New technology will save us.

I will be interested where these dots take us, carry on please, Rockman.

By the way, is it OK for me to be a little pissed that the entire world wants to use the GOM and the Gulf Coast for its energy highway and parking lot? I am plumb tired of that, really. Can't drill on the East Coast, not off California, no way, Jose. Y'all go head on in the GOM, don't make a mess that we have to watch on TV (really, we don't care all that much what kind of mess you make on those ugly beaches).... just get us the oil cheap and by Gawd, don't run out. Don't want to move tar sand gunk across BC, no loading terminals off pristine Canadian coastlines? Hey, lets build a pipeline to Texas! Let the Chinese load it down there, so what if they spill a little. Refineries? LNG ports? Not here, not in our backyard, no sir. Let Louisiana try it; Louisiana likes everything.
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Re: "Excess" US Refinery Products Need To Be Exported

Unread postby AirlinePilot » Sun 02 Jun 2013, 01:27:32

Oily Stuff wrote:By the way, is it OK for me to be a little pissed that the entire world wants to use the GOM and the Gulf Coast for its energy highway and parking lot? I am plumb tired of that, really. Can't drill on the East Coast, not off California, no way, Jose. Y'all go head on in the GOM, don't make a mess that we have to watch on TV (really, we don't care all that much what kind of mess you make on those ugly beaches).... just get us the oil cheap and by Gawd, don't run out. Don't want to move tar sand gunk across BC, no loading terminals off pristine Canadian coastlines? Hey, lets build a pipeline to Texas! Let the Chinese load it down there, so what if they spill a little. Refineries? LNG ports? Not here, not in our backyard, no sir. Let Louisiana try it; Louisiana likes everything.


nice rant!!! LMAO ;)
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Re: "Excess" US Refinery Products Need To Be Exported

Unread postby ROCKMAN » Sun 02 Jun 2013, 10:45:30

Little by little the reality is slipping out. Perhaps when summer gasoline prices start climbing the MSM will smell the blood in the water and start making the public aware of what our little tribe here already knows. From: http://priceofoil.org/2013/03/14/keysto ... -gasoline/

Keystone XL refineries already exporting 60 percent of their gasoline

“Proponents of the Keystone XL tar sands pipeline often cite energy security and the desirability of Canadian over Saudi or Venezuelan crude in promoting the project. But how does the pipeline enhance American energy security if much of the product it carries is refined and then exported? Research has shown that the pipeline’s major purpose is not to provide oil for the U.S., but to serve as an export pipeline fueling international markets. New data reveals that a full 60 percent of gasoline produced in 2012 at Texas Gulf Coast refineries was exported. These are the refineries that would process the majority of the tar sands bitumen flowing through the Keystone XL pipeline, if it were built.”

The writer stumbles a bit here. There is no “if” the pipeline is built. Construction of the entire system has not stopped for one day. All that’s been lacking is that very short border crossing section. In the meantime the crude has been bypassing that restriction via truck and rail transport.

“The changing dynamics of the U.S. oil market strongly suggest that exports would only rise over the lifetime of the pipeline. U.S. production is rising but consumption is declining and the industry will continue to maximize its profits through exports. Using government data for exports from Texas Gulf Coast ports and for Texas Gulf Coast refinery production, the data shows that these refineries are now exporting 60 percent of their annual production of ‘Finished Motor Gasoline’. In addition, 42 percent of the diesel produced by these refineries is currently exported, which is an 11 percent increase over 2011 diesel exports from these refineries. Finally, over 95 percent of their production of petcoke – a dirty coal substitute that is a byproduct of refining heavy oil – is exported. The State Department’s own analysis acknowledges that the majority of refined products produced on the Gulf Coast are already being exported. Those who believe that Keystone XL is necessary for U.S. energy supply might be surprised by this fact.”

Now it’s easier to connect the dots to the two expansions of export facilities on the Texas coast previously reported here. As this report clearly shows the current administration is well aware of the developing dynamics. All the posturing over not issuing the border crossing section of Keystone was just a diversion IMHO. Just as the political outcries from the Canadian politicians who also clearly understood where the profit was being made. Perhaps it's only fair that the US which has been outsourcing some of the pollution from products we import is now letting the Canadians outsource their refinery pollution to the US. Thank goodness for all the parties involved the public has had more important matters to focus on…like the next stage of “American Idle”.

Also a little warning: be prepared for another nationalistic rant from Oily Stuff. This will probably push him over the edge. Sorry bubba. LOL
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Re: "Excess" US Refinery Products Need To Be Exported

Unread postby Loki » Sun 02 Jun 2013, 11:16:31

ROCKMAN wrote:Actually all I've seen from BC politicians so far is fully giddy support. They want the jobs. It's a done deal AFAIK.

Not so much of a done deal. The conservative premier of BC was recently reelected, but even her government has come out against the pipeline (sort of). The province owns most of the land through which the pipeline would pass---they could stymie construction for years if the federal government tries to push it through.

Efforts to expand production from the Alberta tar sands suffered a significant setback on Friday when the provincial government of British Columbia rejected a pipeline project because of environmental shortcomings.

In a strongly worded statement, the government of the province said it was not satisfied with the pipeline company's oil spill response plans.

The rejection of the pipeline – which was to have given Alberta an outlet to Pacific coast ports and markets in China – further raises the stakes on another controversial tar sands pipeline, Keystone XL.

Barack Obama is still weighing a decision on that pipeline, intended to pump tar sands crude to the Texas gulf coast.

British Columbia, in its official submission to a pipeline review panel, said the company had failed to demonstrate an adequate clean-up plan for the Enbridge Northern Gateway project. It set five new conditions for the project's approval.

"Northern Gateway has presented little evidence about how it will respond in the event of a spill," Christopher Jones, a lawyer representing the province, said in a statement to the federal government panel reviewing the project.

"It is not clear from the evidence that Northern Gateway will in fact be able to respond effectively to spills either from the pipeline itself, or from tankers transporting diluted bitumen," Jones added.

Jones said the pipeline would cross over remote and extremely difficult terrain, with pristine rivers that could be devastated in the event of a spill. He said those considerations compelled the province to hold the pipeline company to a higher standard. "Trust me is not good enough in this case."

http://www.guardian.co.uk/environment/2 ... e-enbridge



As for First Nations, not so much support:
The Yinka Dene Alliance, whose members' territories make-up 25% of the proposed Enbridge Northern Gateway pipeline route, say the Premiers' position on Gateway will be a litmus test for the government's new relationship with BC First Nations.

"Christy Clark has expressed a strong interest in building positive relationships with First Nations in Northern BC," said Chief Martin Louie, Nadleh Whut'en First Nation. "She can either start building that relationship by taking a strong, principled stand against the Enbridge Northern Gateway pipeline and respecting our indigenous rights and title, or she can poison the well for future discussions on resource decision-making in Northern BC, including around LNG."

Over 160 First Nations have signed the Save the Fraser Declaration, banning tar sands oil projects from their territories as a matter of indigenous law.
http://www.marketwire.com/press-release ... 792396.htm
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Re: "Excess" US Refinery Products Need To Be Exported

Unread postby ROCKMAN » Sun 02 Jun 2013, 11:58:38

Actually something of an apple/orange situation. It looks like the refinery deal is the alternative plan to the crude line hauling to the coast. As you say neither is a done deal. But a lot more support for the refinery deal than the coast crude line. BC comes out way ahead financilly on the refinery.

And as I just posted nothing is holding up the oil sands development even if it means exporting it's products out of the US. One reason Canada exported more oil to the US then ever before during 2012. And it looks like 2013 will break that record. And that is a done deal done some time ago.
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Re: "Excess" US Refinery Products Need To Be Exported

Unread postby Oily Stuff » Sun 02 Jun 2013, 13:20:34

I guess I need to apologize for my "ranting." It occurred to me as a result of this enlightening and provocative thread that not only is my own country wanting to "outsource" all of it's pollution to my neighborhood, now the Canadians, the Saudis, the Chinese do also. I guess you have to live here to understand.

But, we can handle it. Always have.
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Re: "Excess" US Refinery Products Need To Be Exported

Unread postby Loki » Sun 02 Jun 2013, 13:30:14

I'm assuming the proposed refinery in your OP depends on the Keystone XL (if not, how else will Texas get Albertan oil?). The BC pipeline was the alternative to the Keystone. If neither is built, what then?

What's holding up further development of the tar sands is the landlocked geography of Alberta. I think if we can stop the Keystone pipeline, BC will do its part and stop pipelines to their coast. Alberta will have to be happy with their current exports to US refineries and China will have to find some other source of oil.
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Re: "Excess" US Refinery Products Need To Be Exported

Unread postby ROCKMAN » Sun 02 Jun 2013, 13:36:35

OS - No apologies needed. You're just a little ahead of the learning curve from the rest of the pop. They'll be catching up in a few years. Maybe sooner if we have some very high fuel prices this sumer. I figure by the time the next presidential election cycle gets into full steam this may become THE campaign issue. All depends on what else is going in with the POD at that time.
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Re: "Excess" US Refinery Products Need To Be Exported

Unread postby pstarr » Sun 02 Jun 2013, 14:15:20

Loki, it appears Glacier and Banff national parks may be another obstacle to a Kitimat oil terminal. A Calgary-Kitimat pipeline would need to go north (and extra thousands of miles) north around the Rocky Mts? Rock, could the market afford the extra capex?
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Re: "Excess" US Refinery Products Need To Be Exported

Unread postby ROCKMAN » Sun 02 Jun 2013, 18:05:09

Pstarr – The project is still in its formative stage. Details yet to be determined. But in one version no pipeline is required. From: http://www.troymedia.com/2013/03/11/5-r ... -go-ahead/

“But that opposition can have perverse results. For example, strong demand for energy in Asia without a pipeline to deliver it means transportation will be by rail, a more expensive and somewhat less safe alternative to a pipeline. But the necessary rail infrastructure is already in place and no permitting would be required to proceed.”

IOW the plant can go forward tomorrow if the railing option doesn’t kill the economics. The town of Kitimat has already approved the construction site. And the current BC govt has given its support. It’s starting to look similar to the developing rail transport to the east coast of the US. The theoretical gains look good at least for now on paper. What actually evolves remains to be seen. And they are:

“No. 1: The 6,000 construction jobs and the 3,000 jobs for the on-going operation would be well paid and many would be unionized. In fact, Tom Sigurdson of the B.C. Building Trades Council offered his support while mentioning the role the union would play in providing the necessary skills training. Sigurdson also pointed out that projects such as this offer on-going, family-supporting work close to home for First Nations and others in the smaller communities of B.C.

But the 6,000 jobs are the result of direct employment only. An equal number of jobs could result from petrochemical operations producing plastics and other value-added products that would grow up around the refinery. Further, all this new wage income would be spent creating even more work in retail and other sectors.

No. 2: The $3.75 billion in new tax revenue between now and 2020 the refinery would generate is a major benefit to governments looking for ways to continue to provide the health care, education and other public services we expect, without excessively adding to the burden of existing taxpayers, and without the limitations governments face in their ability to operate by increasing debt.

No. 3: The proposed refinery would be very competitive and cost effective. Being on tidewater is a significant advantage. Transportation to Asia from B.C. would be $22 per barrel less than going through Houston. The lower construction costs in B.C. will save some $10 million compared to a refinery in northern Alberta. Even after paying Alberta producers higher prices for their product than they are currently getting, the feedstock for this refinery will still be much cheaper than what is currently available to refineries in Asia. Finally, the large size of the new plant will generate money-saving economies of scale.

No. 4: Environmentally, the use of new refining technologies will drastically cut emissions and shipping lighter refined products rather than heavier bitumen makes tanker transport safer.

No. 5: A refinery on tidewater in B.C. gives Canada access to world markets, especially to the growing markets on the Pacific Rim. As long as Canadian energy is landlocked, the U.S. will continue to take advantage by paying well-below world prices. And the American market will only get worse for Canada as the U.S. reduces demand by increasing energy efficiency and its domestic supply from shale. And a pipeline to the Atlantic is no panacea: it would also face shrinking energy demand in North America and Europe.”

That’s a lot of financial incentive backing up the Canadian politicians. Of course, there will be very vocal opposition to any plan that allows exploitations of the oil sands at any level. But voices won’t alter the path Canada is on IMHO. In the end right and wrong won’t be a determining factor. The Canadian economy will be the critical factor and the balance of that power appears very lopsided at the moment.

And one final editorial comment: “What happens if we do not build refineries, pipelines or otherwise develop our energy production and infrastructure? We face reduced demand in the U.S., our only accessible market. We sell smaller energy volumes at lower prices. Jobs and tax revenues decline, hurting government services and our standard of living. And finally, the environment is no better off, as other countries will fill the void by producing carbon based-energy, often in ways that are less environmentally-friendly than is the case in Canada.”

But, again, it’s all just theoretical at the moment.
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