Wednesday, September 7, 2011

Taken for a pipeline ride

Overheard: Asia's View of Alberta, Tar Sands and Pipelines
If this insider is right, Gateway is purely a ploy and Canadians are rubes.

Michael Byers, The As I listen in, I hear from a consultant a startling analysis of what Asia really thinks... 'The Gulf of Mexico coast is the only place in the world with any significant capacity for handling bitumen... If the Asians buy any bitumen from Canada, they'll insist on a very steep discount, because they'll have to ship it to the Gulf of Mexico too.'... He chuckles. 'But we don't tell the Canadians this straight-out.'...

'But what about the Northern Gateway,' I ask,... the proposed 1,200-kilometre-long twin pipelines between Fort McMurray, Alberta, and Kitimat, B.C. 'Enbridge is a major player. Surely they would realize that there's no market in Asia?'

'Enbridge is a pipeline company, not an oil company,' he replies... 'They've promised to find a market, and nothing more. They don't care if it's at a discount.'... 'If the Canadians were smart, they'd build the capacity to refine all their bitumen at source, so as to ship a much more valuable product to Asia and elsewhere.'...

'But surely Northern Gateway isn't just about Canadian oil companies being taken for a ride? I thought that Northern Gateway was designed, at least in part, to put pressure on the U.S. State Department to approve Keystone XL.'... a proposed 3,190 kilometre-long pipeline that would transport bitumen from Fort McMurray direct to the refineries on the Gulf of Mexico coast...

'You're absolutely right,' the consultant nods. 'And not just in part. Gateway is all about putting pressure on the State Department.'

'But the people at the State Department aren't stupid,' I protest. 'Surely they can see right through this?' 'Don't count on it,' he laughs derisively. 'They're focused on the Middle East. They don't understand the Asian energy market. They really don't.' He leans over and whispers: 'And even if they did realize that Gateway is an empty threat, they'd still approve Keystone XL, eventually. No matter what the EPA says, the State Department isn't about to depart from its practice of approving pipelines from Canada. It'll just spin out the decision as long as it can, hoping the project dies for other reasons.'
Image: tar sand; source here.