America Has Built the Equivalent of 10 Keystone Pipelines Since 2010
The blue lines show expansion since 2005. Note the expansions to Port Arthur and Corpus Christi, Texas.
by Gaius Publius
As you may know, TransCanada Corporation, the owner and builder of the Keystone (KXL) Pipeline, has recently withdrawn its application for approval, hoping, most analysts say, for a more carbon-favorable next president. Obama didn't take the bait, didn't interrupt the approval process, and rejected the proposal anyway: "He announced on Friday that he would not approve the Keystone application, saying the project did not serve the nation’s interests."
That great victory obscures a sobering fact. A virtual Keystone pipeline is being built anyway. Yadullah Hussain at Financial Post:
America has built the equivalent of 10 Keystone pipelines since 2010 — and nobody said anythingWhat does "10 Keystones" look like? Read this and refer to the map at the top:
While TransCanada Corp. has been cooling its heels on its Keystone XL proposal for the past six years, the oil pipeline business has been booming in the United States.
Crude oil pipeline mileage rose 9.1 per cent last year alone to reach 66,649 miles, according to data from the Washington, D.C.-based Association of Oil Pipe Lines (AOPL) set to be released soon.
Between 2009 and 2013, more than 8,000 miles of oil transmission pipelines have been built in the past five years in the U.S., AOPL spokesperson John Stoody said, compared to the 875 miles TransCanada wants to lay in the states of Montana, South Dakota and Nebraska for its 830,000-bpd project. By last year, the U.S. had built 12,000 miles of pipe since 2010.
“That’s the point we make,” Stoody said. “While people have been debating Keystone in the U.S. we have actually built the equivalent of 10 Keystones. And no one’s complained or said anything.”
The 487-mile southern leg of the project, dubbed the Gulf Coast project, between Cushing, Okla. and Texas refineries came on stream in 2014.As I said in this Virtually Speaking Sundays episode (second half of the show), the way to eliminate carbon emissions is to strangle ("disrupt") supply and/or strangle ("disrupt") demand. I favor disrupting supply, since demand for energy coupled with diminished carbon-based supply will accelerate the creation of alternative energy sources. As the article makes clear (there's more in it than I quoted), increased delivery capacity enables as much supply as producers are willing to create. It's hard to disrupt supply when (1) they're digging as much as they can profit from, and (2) there are no barriers to transporting to refineries and users, including foreign ones.
While the northern leg of Keystone XL remains under review, the Lower 48s have seen new oil pipes crisscrossing the country.
“If you look at 2010 versus now we have seen historic realignment that has transformed the infrastructure situation,” said Afolabi Ogunnaike, analyst at Wood Mackenzie. “There has been tremendous investment in pipelines and more investments are coming on.”
The U.S. midstream infrastructure is responding to a near-doubling of U.S. production over the past six years. The U.S. saw an 11.6 per cent increase in crude oil transport via pipelines in 2014, according to AOPL data.
Bottom line — the victory against the pipeline named Keystone is real and important. That said, it's just the first touchdown in the first quarter of a much longer game. It's not over. (Sorry for the sports metaphor; 'tis the season.)