11.08.2015 05:57 PM

Of pipelines and railways

Very disappointed in Barack Obama, this week.

When Stephen Harper and Justin Trudeau agree about something, it’s worth considering carefully – even if you’re a U.S. President.

I personally aspire to live in a world where we do not need to burn fossil fuels – but, for the foreseeable future, I still live in a world that does. And, as such, I would prefer that something like Lac Megantic never happens again.



  1. The Doctor says:

    The traditional modus operandi of the environmental movement has been to go after “trophy kills”, i.e., larger, high-profile projects that are easily identifiable and give themselves over to mass mobilization, fund-raising and the like. The big trophy kill back in the 70s and 80s was nuclear power. Now it’s pipelines. I can see why the environmental movement does this, because it’s an effective way to fundraise, get publicity etc. But what concerns me is that it doesn’t necessarily result in policy choices or outcomes that are rational or fair or efficient.

    The oil by rail thing that you cite is one example. Another oft-cited example is the way that coal has strangely flown under the radar compared to oil. It’s almost like coal has gotten a free pass compared to the utter demonization of pipelines. Do pipelines really warrant the kind of oversized attention that’s been heaped on them over the last few years?

    • Cory says:

      IMO, if they hadn’t opposed nuclear power in the past, carbon emissions would be much less of a problem today.

      • cgh says:

        True enough, Cory. But, first, the hard greens are more opposed to nuclear than they are about dealing with global warming. That’s become clear with the increased burning of lignite in places like Germany where nuclear is getting phased out and replaced by coal. Antinuclearism has long been their principal fund-raising tool. It’s the issue of nuclear power that is to some extent now fracturing the green movement.

        Second, to some extent, they were hired guns. As little as less than a decade ago, one of Ontario’s leading antinuclear groups, Ontario Clean Air Alliance, was still being funded directly by Enbridge. It’s oil company money from the big charitable foundations that turned the greens into the second largest lobby organization in Washington.

      • HarryR says:

        E = MC squared is the solution.
        for you edification and enlightenment. Note! The environ-mentally challenged may find it somewhat indigestible!

        • cgh says:

          Excellent link, Harry. You can also turn the equation around. Any use of energy involves some destruction of matter.
          It’s easily calculated by switching the equation to m = E/c(2).
          Just for amusement once, I calculated the rough matter destruction rate of the Sun.
          It came out to about several hundred million tonnes per second.

          • HarryR says:

            Big numbers! So, how long before “lights out”?

          • cgh says:

            Fortunately for us, the Sun uses its fuel very slowly and inefficiently. It will be just over a billion years before the Sun has used up enough hydrogen to fall off the main sequence and expand into a Red Giant. It will expand to roughly the orbit of Mars.

            This will be utterly irrelevant for the Earth, because all life will have disappeared from our planet at least 800 million years prior (about 200 million years from now) because of the evaporation and breakdown of all water molecules on our planet. Even before the evaporation of all the water, Earth will be uninhabitable about 100 million years from now for all complex life forms because of the steady heating up of the Sun. Because of the steady buildup of impurities in the Sun (fusion products) the Sun is about 40% hotter today than it was during the beginning of the dinosaur era 300 million years ago. At the same time, over geologic time, the carbon dioxide level in the atmosphere continues to drop. At less than 100 ppm (current level 400 ppm), all plant life more complex than grasses disappears (unable to carry out photosynthesis). This too will happen about 100 million years from now.

            It comes as a bit of a shock to recognize than in the life cycle of our planet, the Age of Plants is about 90 per cent over.

  2. Darren H says:

    Obama cares only for American interests. Mr Trudeau and the LPC should take the lesson and do likewise for Canada.

  3. Ted H says:

    Keystone XL is phase 4 of the project and simply duplicates phase 1 with bigger pipe and a shorter more direct route. Phases 1 to 3 already ensure delivery of Alberta oil to the Gulf Coast, so it’s not like denying XL prevents sale of Alberta oil, it does prevent a larger delivery which would raise the price of oil in Canada since more oil would reach the market at full world price, not the discounted price that applies to some Alberta oil now. So, it really is no big deal and doesn’t change much, the whole issue is political, not economic.

  4. Don Wilson says:

    Warren, at current prices, the business case for shipping difficult-to-refine Alberta crude to the Gulf coast is very weak. The US has lots of oil from other, easier-to-refine sources. There is no buyers’ premium for Ezra Levant’s “ethical oil”. Then again, there is no such thing as “ethical oil”.

    • cgh says:

      Several things. First, infrastructure project economics like pipelines are based on much longer terms than a small part of a normal natural resource price cycle. Or are you imagining that the current low oil prices are going to last indefinitely?

      Second, the operating costs per barrel for a pipeline are much less costly than rail shipment. And with the capital amortized over some significant fraction of the pipeline’s lifetime, the total cost is still much less.

      Third, at current rock-bottom interest rates, now is precisely the time to build large, capital intensive infrastructure. The interest costs will never be lower.

  5. Ronald O'Dowd says:


    There is no downside in killing Keystone for Obama. The pre-built southern section will no doubt be used to transport light oil to the Texas refineries. Obama is looking to the history books. His environmental record is less than stellar. Finally earning a gold star from environmentalists is what counts for him.

  6. Matt says:

    Kinda hard to buy Obama’s excuses re climate change considering:

    A) His own EPA stated the pipeline and any increased activety in the oilsands resulting from it’s construction would have a no impact on emissions.

    B) The oil is still going to be coming out of the ground and the US is still going to be importing the oil. That oil now will only transported by rail which will mean higher emissions from the trains transporting it.

    C) The US imports oil from Nigeria which produces the dirtiest oil in the world. Even the oil produced in California is dirtier than our oilsands.

    D) Obama has approved more pipelines within the US than any other President and even approved drilling in the arctic after saying he would never allow it.

    E) Emissions in the US are INCREASING.

    Have friends who think this was retaliation for Trudeau saying he’ll pull our jets out of the ISIS fight. Nonsense. This permit denial was all about internal US politics and symbolism. Obama was never going to approve it.

  7. P Brenn says:

    I am with you on this…this is about delivering oil not burning fossil fuels….we arent ready to stop that yet as you note….maybe we can build it underground like those drug tunnels from Mexico…

  8. DougM says:

    I agree. Just read about a CP Rail derail (in the US somewhere) and oil spill today.

  9. Maps Onburt says:

    Right you are Warren. The oil will get burned whether it goes by rail, pipeline to the east for refining in Montreal or St. John’s or to China. Keystone was the most economical and greenest way to do it. Obama is being incredibly short sighted here. I guess it’s better to buy oil from Terrorists than from a trusted ally.

  10. Tim White says:

    I think this is one of the big failures of the Harper government. The Conservatives should have kept their mouths shut on Keystone, told TCPL to do the same and let the process run it’s course. They helped turn the pipeline into a climate change poster child. Theirs was a total failure to understand optics and symbolism. Also a failure to understand that the world’s desire to go green is real.

    Alberta media types still seem to be in denial about all of this. The world isn’t going to stop using large amounts of oil any time soon and oil will always be needed, but its use is winding down. The recalcitrant attitudes from the Harper people and the Alberta oil patch have produced a very real risk that other’s oil is going to be burned while ours is left in the ground. As an Albertan, I wish Premier Notley and Prime Minister Trudeau the best of success in finding a way to find markets for our oil resources. The old ways have produced zero results. I hope they are successful in resolving the problems. Waiting around for a Republican government hasn’t really turned out to be much of a strategy.

    • Jack D says:


      That’s a very accurate summation, Tim.

      What’s needed now is a recognition of the realities of the global market and demands for greener energy solutions. I think if both Notley and Trudeau are cognizant of this we may see actual energy sector sustainment for Canada than Harper could have ever provided.

    • Maps Onburt says:

      Give me a break… the Harper Conservatives didn’t start the war against the Oil sands… you can blame the Sierra Club, Greenpeace et al for that. He was a convenient enemy to attack. Whether he opened his mouth (or TCPL did) was irrevelant. They were gunning for us anyway. I doubt that will change much unless PM Trudeau decides to throw our economy in the crapper in Paris (and I don’t think he will). The Oil Sands (like the baby seals) make a very good target. The greenie’s won’t be happy unless it all stays in the ground (as they fly first class to their eco conferences in lush locations every year).

      • Elisabeth Lindsay says:

        …..on other people`s money.

      • littlemissbliss says:

        i couldn’t agree more. How dare those mean greenies care about the future. we are the proud owners of the fossil of the year award. only the stanley cup ranks higher. how dare they interfere with our divine right to turn canada into a landfill. we deserve our suv’s atv’s and jetski’s and burning tons of fuel to get to our cottages. i say put the greenies in jail where they belong and the sooner the better. damn kids ain’t got no respect anymore.

        • Maps Onburt says:

          You’re getting very monotonous. If you bike everywhere, use wooden bowls, heat your home with cow turds, and burn candles then you can talk. Otherwise, you’re nothing more than a huge hypocrite. That computer you are spewing your venom on is made of plastic… which comes from oil. Chances are it came from China… which means that they burned oil to get it to you. Google reclaimed Oil Sands some time to see what those “landfills” really look like when we’re done extracting the oil. They are being turned into Boreal forests that will act as Carbon sinks.

          You could give every Canadian a SUV and you still wouldn’t make a significant difference in the global CO2 output since ALL of Canada (including the Oil Sands production, all of our energy needs, manufacturing, etc) accounts for less than 1.8% of the global CO2 emissions and transportation (including trains, planes, trucks and automobiles) accounts for only 24% of that so we’re talking about less than 1/2 of one percent – like I said, guppy shit on the bottom of the ocean.

          I’m not advocating everyone drive SUV’s or be wasteful or negligent

    • Dan Forth says:

      As an ex-Albertan it pains me to see the position the province finds itself in. How about a pipeline, or 2, or 3 to the Pacific?…unfortunately the BC Gov’t and the Aboriginal community aren’t keen on seeing any pipes cross their territory unless they get paid off. Can’t go east as Quebec doesn’t want anything to do with the Energy East line. That left Keystone, er did. Maybe Yukon Ho!

      It is hard to sell oil if you can’t ship it.

      I don’t agree that Harper is to blame. Obama is doing what all US Presidents do…look out for his own, and the US best interest. Looking back it is pretty hard to see how Obama was ever going to approve the pipeline. He has thrown thousands of coal miners out of work with his anti-coal policies. I think his decision is in keeping with his environmental views. Nothing little Canada could do was going to change his mind.

  11. Brion Pollon says:

    I concur with your thoughts on Keystone and the single reason Obama is involved is because the pipeline would cross an international boundary. As for Megantic, yes it should never happen again although in that single case 18 separate failures occurred that culminated in the disaster. Unfortunately, instead of being loaded with grain or other bulk commodity it just happened to be loaded with combustible crude oil. Common sense would dictate that crude should move by pipeline, however it looks like lots will be on the rails at least until Obama is no longer in office.

  12. Jack D says:

    On the contrary, this is a big win for Trudeau and Obama.

    Trudeau: Kiboshing a source of huge headache for the Canadian government without having to take the heat for its death is the best Trudeau could ask for. Now he gets to start on a fresh new slate.

    Obama: Legacy stuff; appealing to the environmentalist with the Democratic party and America assures him being remembered very fondly in the long run. Pro-pipeline folk in America already hate Obama, so there’s no winning with that group. Politically, this was an astute decision by the President.

    Lets be honest here, TransCanada has done what must be an historically shitty job at selling Keystone to both Canadians and Americans. What was possibly one of the laziest sales pitch ended up drawing so much negative attention towards Canadian oil-sands. Harper didn’t help all that much either. All he ended up doing was strengthening Obama’s resolve against this pipeline –he ended doing more harm than good, really.

    By the way, oil traveling via rail to America has increased tenfold in past few years while this whole Keystone debacle has been going on. So lets not pretend like we’re any safer today. Oil needs to leave our country no matter what; its gotta get to market. Lets figure out another way and get past this XL failure.

    • Matt says:

      It was astute by Obama only in the sense he know’s he can’t get elected again so he won’t have to face the more than 2/3rds of the American people every poll on Keystone shows support the pipeline.

  13. SG says:

    I believe Energy East is a much better project for Canada anyway. Keep the jobs at home, significantly boost the economies of three provinces (Alberta, Saskatchewan, and New Brunswick), not to mention the jobs created (albeit temporary) to build the pipeline across the country, and help secure our energy future.

    Of all the boneheaded things that the Ontario Liberal government has done, none has angered me more than Wynne’s spiteful attempt to kill this project. Perhaps if Trudeau takes up the cause, she will change her tune (and in any case, highly unlikely the Ontario Libs will win the next election, imo).

  14. cgh says:

    This decision was not a surprise. Obama has been telegraphing for years that he was going to block this project regardless of what State Department assessments and court decisions produced. And that he would do so at a time convenient for his domestic political agenda. What it will do in Canada is increase the pressure to proceed with Northern Gateway and thus end the price discount on Canadian oil. It will be interesting to see if the United States special interest groups succeed in blockading Canadian oil on Canada’s Pacific coast as they’ve succeeded in blocking access to the Texas oil refineries.

    On a larger picture, it should be evident by now that Democrat administrations in Washington are less beneficial to Canada on internal economic matters than Republican ones. Whether it’s KXL or “Buy America” policies, the most damaging hits Canada’s economy takes from US administrations always come from the Left.

  15. Kaiser Helmets 'n Motorbikes says:

    Although I don’t think you can place the entire blame on Jesus Trudeau’s anointed head, this Fortune article does have a point. Butts et al did make a classic negotiating mistake by taking every west coast option off the table.


  16. Maps Onburt says:

    Saw on the news this am that PM Trudeau Jr let Former PM Harper and his family fly home on the Challenger. Very classy move.

  17. Darren H says:

    Wrong. The project was killed by Obama under Trudeau’s watch, not Harper’s. In politics timing is everything and you have to wonder about the timing of the announcement. Perhaps this is a little tit for tat for Trudeau announcing that we are going to cut and run from the ISIS mission.

  18. Derek Pearce says:

    You keep telling yourself that, it’s okay. Conservatives, meet wilderness…

  19. Derek Pearce says:

    Also Warren, maybe we could not have any Lac Megantics again regardless of whatever is being transported by rail anywhere. That’d be good too.

    • billg says:

      So what your saying is, lets do away with human error.
      Oil and gas will be pumped out of the ground. Oil and gas will be burned for the next 100 years.
      There were many NDP and Green voters who turned to the Liberals in the last election.
      How does the LPC grow the economy without trucking, railing or pipelining oil and gas all over Canada and keep those NDP and Green voters happy who think that our resources should be left in the ground.
      Keystone is just the beginning of a big headache for Mr Trudeau.

  20. Lance McLean says:

    With the risk of sounding cold, Lac Megantics was minor as compared to what that accident could have caused if it was in a higher populated area. These trains run through very densely populated areas daily. It is a matter of time before it happens again, especially with the increase in rail shipments and illogical hate for pipelines. I don’t recall a pipeline incident with quite the amount of damage Lac Megantic caused. That being said, the railways are improving their safety as can be seen from derailment numbers, less or the same in the last 7 or so years as compared with the previous number of years. http://www.bst-tsb.gc.ca/eng/stats/rail/

  21. Kelly says:

    Canada needs to be ready to move beyond petroleum. At current prices the tar sands are uneconomic because they’re, well, tar. They are expensive to extract and refine. Sadly the world economy has trouble functioning when oil prices are high enough that tar sands projects can make money. As a result, unprecedented levels of investment are going into alternatives, as well as better transit infrastructure so as to reduce and conserve. Canada needs to be at the forefront of this research so the patents and technology are owned here. Otherwise we will be hoofed when we wake up to realize the vast majority of our “resource” will never be extracted and its effectively worthless.

    • Lance McLean says:

      ?? beyond petroleum, yeah right, still the cheapest source of energy out there and even at 100+ a barrel it is still cheapest. Maybe one day way way in the future yes, and guess who will be leading the charge, the current large energy companies. They are in the business of making money for shareholders, they do not care what the energy product is. When the “green alternative” is economically viable and is proven to be able to supply what the world needs, as far as power/energy then perhaps it may take over. Not going to happen for a very long time though. The world economy is oil based, as much as people would like to dream for a less polluting alternative but it is not going to happen for a very long time.

      to replace the amount of oil consumed per year you would have to construct or have in place any one of these:
      4 Three Gorges Dams, developed each year for 50 years, or 200 dams right now
      52 nuclear power plants, developed each year for 50 years, or 2600 more right now
      104 coal-fired power plants, developed each year for 50 years, or 5200 more right now
      32,850 wind turbines, developed each year for 50 years, or 1,642,000 right now
      91,250,000 rooftop solar photovoltaic panels developed each year for 50 years, or 4,562,500,000 more right now

      Now increase these numbers by 140% because natural gas and coal are burned at a rate that is 1.4 times that of oil.
      I know people here have probably already read up on this, but check out the cubic mile of oil and why it is used for measuring replacements etc. The world uses an eqquivelent of 3 cubic miles of oil a year (1.06 is actual oil, 1.4 is coal and gas, .5 is biomass, hydro, geothermal, nuclear, and < .005 is wind and solar).

      There is not going to be any world without oil or carbon based energy for a very very long time, no matter what people want to believe. So in the meantime we may as well extract, refine and transport this stuff safely and securely, pipelines are the best method.

      Oh and watch the US change their tone if we can ever get our own major pipeline to tidewater. I bet the idea of a large pipeline to the US, full of our "dirty" oil will be welcomed no matter the party in power in the US. The US wants to control our oil, we are very big reserve to them.

      • Kelly says:

        I don’t want to get into a long argument and go all off topic but you are mixing up transportation fuels with fuels used for other purposes such as electricity generation. The tar sands aren’t used to generate electricity. Coal and natural gas are. The point is bitumin is worthless unless it can be extracted and processed at a profit. Right now it can’t. When it can, the price of oil is too high for the rest of the economy to function well. Oil companies are not in the business of playing by the rules. Their strategy has been to fight anything that gets in their way…including funding junk science and phony scientists to make their case. Other kinds of companies will develop alternatives. Yes it will be a very long time before oil is no longer a significant source of transportation fuel flobally but already most of the tar sands are stranded assets because they are so uncompetitive. The market will wreak havoc on our economy for awhile until we develop alternatives and that is happening now (Green energy already employs more people in Canada than the tar sands http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/green-energy-sector-jobs-surpass-oil-sand-employment-total/article21859169/ )

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