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The Battle for Keystone

By Michael Evans - 12 Mar 2013 12:2:38 GMT
The Battle for Keystone

Oil Pipeline Image; Credit: © Shutterstock

It all seems so beautifully simple. The might of the United States has an almost inexhaustible thirst for oil and across its northern border in the Canadian province of Alberta are 98% of Canada's oil reserves.

A major problem for environmentalists is that 99% of these reserves are found in oil sands and in spite of extensive lobbying and protest, the perceived need for oil has led to the intensive development of these oil reserves.

Further controversy has been raised by the plan is to transport the oil from the tar sands of Alberta to the US production plants in the Gulf of Mexico by means of a 2,000 mile pipeline as part of what is known as the Keystone Project.

The US State Department has recently published a detailed report looking at alternatives to the Keystone Project and the conclusion that was reached was that the oil from the Canadian tar sands would still be developed regardless of whether the pipeline was constructed,.

Such is the need for oil in the US that even if no pipeline was constructed, some other means would be found to transport the oil to the Gulf of Mexico refineries. This would most likely be done by rail and although this would be quite feasible, it would involve around 15 trains a day, each made up of 100 tank trucks.

While the problem is not insurmountable, it should be born in mind that transport of oil along this route is already extensive, having doubled between 2010 and 2011 and tripled between 2011 and 2012. CO2 emissions from that number of trains would be significant and far greater than transporting oil by pipeline.

If the US did not take the oil, Canada would find some other market, most likely in Asia where demand is booming. Transportation costs would be considerable and would create even more CO2.

As things stand, if the US did not get its oil from Alberta it would still need to get it from somewhere else. Venezuela, Mexico or Saudi Arabia are the most likely alternatives. The problem here is that some of these oils are heavy crude and the refining and burning process is thought to be more harmful to the environment than using fuels from refracted Canadian oil sands.

The most likely alternative to refracted oil sand from Canada would be Venezuelan crude and the reduction in greenhouse gas type emissions would be minimal. Added to this, more expensive oil would encourage people to begin to use more coal for electricity generation.

Even the influential scientific journal Nature has argued in favour of Keystone's approval.

The bottom line is that as long as there is a demand for oil, there will continue to be a supply - whatever the cost. A very convincing argument is that if it is possible to reduce the demand, then the need for the supply will fall.

There are many calls for more research into alternative sources of energy. A possible answer would be an energy tax that could be used to fund research into alternative sources. This might be regarded as political suicide, but currently the US government spends $73 billion per year on defence research, but only $3 billion on energy. Massive increases in research could make a real difference.

Environmentalists continue to vehemently oppose Keystone, but the counter argument is that to abandon the project would be something of a slap in the face for the US's closest trading partner by spurning easily accessible energy in favour of Venezuelan or Saudi crude.

The debate has now become one where emotion and ideology are squared up against analysis and science - it will be interesting to see which side triumphs, but it is clear that there will be no true winners either way.

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Topics: Oil and Gas / Pollution