“Study: Keystone pollution higher” – Politico, 10 August 2014

According to a report from the Stockholm Environment Institute, the Keystone XL pipeline — the 1,700-mile pipeline that would send 800,000 barrels a day of crude oil from Canada sand formations to Texas refineries — could potentially emit four times as much pollution as initially determined by the State Department.

Estimates made by the US federal government didn’t consider that transporting extra oil through the new pipeline can potentially cause prices to fall by almost $3 per barrel. More oil means more consumption, and more consumption means more pollution. Yet, organizations like the American Petroleum Institute (API) view the study as trivial, as the oil will be produced and transported either way; if it wasn’t being shipped through the pipeline, then it would be shipped using the railroad, which could also increase emission levels.

The report projects that the pipeline can raise greenhouse gas emissions by about 121 million tons of carbon dioxide per year. The State Department noted that the pipeline would, at the most, only increase CO2 emissions by 30 million tons this year.

Earlier this year, President Obama was still undecided about approving the pipeline; and his administration’s approval has been extended until after the midterm US elections. Obama has been making an effort to reduce the US’s GHG emissions — the report indicates that the pipeline’s emissions could undercut the government’s new policies to curb pollution.

Many scientists from outside the study claim that the extra 121 million tons produced by the pipeline is insignificant compared to the 36 billion tons that we globally emitted in 2013. Still, approving the pipeline could weaken Obama’s new climate policy, which takes a firm stance on the effects of climate change.

See also:
Keystone pipeline: Obama’s unpleasant options
Pipeline Fight Lifts Environmental Movement

Developed and Written by Dr. Subodh Das and Tara Mahadevan

August 12, 2014

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“Pipeline Fight Lifts Environmental Movement” – New York Times, 24 January 2014

Since June 2011, environmentalists have been rallying together to stop the approval of the 1,700-mile Keystone XL pipeline — XL meaning express line — which would send 800,000 barrels a day of crude oil from Canada sand formations to Texas refineries. Though it is unknown if Obama will authorize the project, environmentalists have taken their protests directly to the him.

In addition to transporting hundreds of thousands of barrels of oil per day, the pipeline will also involve an oil extraction process that expends more greenhouse gas emissions than any other means of production. Those in favor of the pipeline say that the oil will be transported regardless; without the pipeline, it would probably be carried by railway, which would cause more pollution.

The pipeline has been an issue that has banded all American environmentalists together, allowing climate change organizations, like 350.org, to grow to double its size in just two short years. People from all economic and financial backgrounds have donated time, energy and money to the cause, merging national and grassroots environmental groups who often argue over attention and resources.

Keystone XL would create a bypass to the Gulf of Mexico and would expand TransCanada’s current Keystone pipeline, which runs from Alberta to Nebraska, Illinois and Oklahoma; Keystone XL would be a more direct pipeline across the US, to Texas. TransCanada and ally American Petroleum Institute have taken the matter into their own hands by running TV and radio ads advocating the many jobs the pipeline will create.

Whether environmentalists’ protests are successful or not, it is easy to agree that the pipeline issue has forever changed American environmental politics, allowing various environmental groups to rally together, and forming a durable infrastructure.

Developed and Written by Dr. Subodh Das and Tara Mahadevan

January 31, 2014

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“Marathon Oil to Spend More in US” – 12 December 2013, Wall Street Journal

US-based oil and natural gas company Marathon Oil is planning to sell its business in the North Sea and increase drilling in the US, which — along with a 13% boost in spending and $2.5 billion share-repurchase program in 2014 — will aid the company in growing both its production and shareholder returns. Besides the US, its main exploration activities are in Norway, Guinea, Poland, Angola and Iraqi Kurdistan.

Of the company’s capital spending for 2014 — an estimated $5.9 billion — $3.6 billion will be used for drilling in North America.

The company is set to spend billions in Oklahoma, Texas and North Dakota, the latter two housing some of the largest shale formations in the US. For Texas, Marathon is investing $2.3 billion in the Eagle Ford Shale Formation located in South Texas, which is expected to have at least 400 new wells drilled in the coming months. For North Dakota, the company is investing $1 billion in the Bakken Formation, and $236 million in the Woodford Basin in Oklahoma.

Other US energy companies are also moving their businesses back home. LA-based Occidental Petroleum Corp. is planning to sell some of its Middle East business and increase its presence in West Texas’ Permian Basin. Houston-based Apache Corp. sold some of its natural gas business in Egypt in order to concentrate on North America. Houston-based ConocoPhillips is looking to sell some of its Nigerian and Kazakhstan assets for a move back home, as well.

Around 70% of Marathon Oil’s profits originate from manufacturing oil and natural gas; the company projects that it’s oil and gas output will rise by 4% in 2014.

It is very positive for both the US economy and energy independence that US energy companies are now investing more in US oil and gas properties.

Developed and Written by Dr. Subodh Das and Tara Mahadevan

January 7, 2014

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“Shale-Oil Boom Puts Spotlight on Crude Export Ban” – 1 January 2014, Wall Street Journal

The flood of natural gas might have the US rethinking its ban on crude oil exports, which dates back to the 1970s.

The world’s biggest oil refinery is located in the US, along the Gulf Coast, and is pumping out an oversupply of crude. The abundance of oil is causing prices to crash, forcing producers to look at their other options — i.e. exporting. These last few months, the American Petroleum Institute (API) has been fighting to lift export restrictions, as is Exxon Mobil, the US’s largest energy company. US Energy Secretary Ernest Moniz has more or less agreed, noting that the bans were instituted during the period of an energy dearth, not an abundance.

Arguments on the ban pit environmentalists, producers, consumers and the government all against each other. Proponents contend that removing the ban will boost the US’s trade deficit; opponents want to retain supplies in the US so that we rely less on the Middle East; others worry about the negative effects of increased drilling on the environment and climate.

The US currently exports coal, electricity, gasoline, diesel and natural gas — everything, it seems, but crude. Crude production is on an upswing in the US, largely due to shale formations located in Texas and North Dakota. It’s predicted that these formations will generate around 7.7 million barrels/day in 2014, and, according to the Energy Information Administration (EIA), set to grow by 24% to 9.6 million barrels/day in 2019. The onslaught of oil could drive down prices, ultimately slowing the nation’s energy boom.

The only way Congress is likely to immediately act is if the ban induces layoffs of energy workers. Regardless, any revisions to the law won’t be immediate. But the new year might just be Exxon’s, and other major energy companies’, year.

We believe that US oil companies should be allowed to export crude oil as a tool lower trade deficit, and increase export-related high paying domestic jobs.

See also:
Exxon Presses for Exports

Developed and Written by Dr. Subodh Das and Tara Mahadevan

January 3, 2014

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