KMI - Kinder Morgan

[Cardboard]

https://www.theglobeandmail.com/canada/article-tories-blast-trudeau-for-not-meeting-with-bc-premier-horgan-on/

 

Cardboard

[RichardGibbons]

Time to send the army and impose martial law in Lower B.C.:

 

https://www.stockwatch.com/News/Item.aspx?bid=Z-C%3aKML-2591503&symbol=KML&region=C

 

I actually thought of a far easier solution to this that will avoid the constitutional crisis and keep everyone happy.

 

The federal government has jurisdiction over the pipeline, and they've approved it so Kinder Morgan should be allowed to build it. This will make Alberta happy.

 

The BC government has jurisdiction over its highways and Lion's Gate Bridge is a huge bottleneck. So, Horgan should add a second, lower level to the bridge to clear up the traffic snarls. If that makes the bridge too low for oil tankers to pass under it, well, that would be just an unfortunate, unavoidable side-effect. And even better, with all the new oil coming into Burnaby that can't be shipped out by sea, gas prices in Vancouver would fall.

 

Everyone gets what they want! Everyone wins! :)

[rb]

Time to send the army and impose martial law in Lower B.C.:

 

https://www.stockwatch.com/News/Item.aspx?bid=Z-C%3aKML-2591503&symbol=KML&region=C

 

Cardboard

It's always nice when patriotic Canadians advocate for illegal acts. Should our military also run protesters and environmentalists over with their tanks while they're there? You know... to smooth things over for future development.

[Cardboard]

Quite the opposite, I am advocating for the law to be upheld.

 

You guys have elected Trudeau and he with his cabinet selected TransMountain to be the project to be built. Northern Gateway was terminated.

 

Protests have taken place, local meetings were held with concerned citizens and taken into consideration in the design. Final approval was then provided by the government.

 

Now, if people continue to oppose by force or other means, then they are the ones committing illegal acts or just like the two MP's who were in Court yesterday.

 

At some point the demonstration is over and things need to carry on. Regarding some of these protesters, I believe that they should be accused of terrorism: destabilizing the country while using foreign funds.

 

Cardboard

[TBW]

There does seem to be a huge constitutional issue if the pipeline is built.  I agree with Cardboard, except for the last part.

 

You can't have small groups, with no legal authority, block decisions made by an elected government.

 

What practical steps can the gov't do is my question?  Do they have to grant all permits and provide necessary protection to let construction occur, as local officials are not willing to do?  PM and others seems to be saying all the things they need to, but what practical measures are required?

 

I think that KMI's actions here increase the likelihood that this gets built.  But I could be wrong.

 

It is completely bizarre to me that NDP blocks TMX yet wants LNG investment.

[SharperDingaan]

Practical steps:

Fed's guarantee construction costs to build the BC loading facility - all Canada pays.

Fed campaign of 'non confidence' in the BC government; following existing precedent (Quebec). Collapse the coalition.

Targeted political departures; following existing precedent (Quebec).

 

Politics is a very dirty business, & the locals want to play.

Break some glass.

 

SD

 

 

[Cardboard]

https://ca.finance.yahoo.com/news/why-canadian-shale-oil-play-120041948.html

 

Cardboard

[RichardGibbons]

You can't have small groups, with no legal authority, block decisions made by an elected government.

 

Yeah, but I think this is reflective of a bigger issue. Recently politicians in North America have been violating social/ethical norms. For instance, gerrymandering in the USA is preventing fair elections and governments are taking huge amounts of cash from special interest groups to promote the views of a minority.  Similarly, in Canada, we've had the government muzzling scientists, promising a KM review and not delivering it, and implementing policies that have allowed housing to become unaffordable to the vast majority of citizens in the two biggest cities.

 

The government seems to largely believe that it's irrelevant if it violates social/ethical norms, as long as it meets legal requirements. But every time it does so, it is basically saying that the social norms don't matter, without recognizing that in North America, people are more constrained by social/ethical norms than they are by the law (how many people speed or illegally smoke marijuana?). So, when the government disposes of social and ethical constraints, they should expect the people to similarly ignore those constraints, and then you get not just the legal pipeline protests, but the illegal ones as well.

 

I'm not arguing that people shouldn't respect the law, but rather that governments should recognize that ignoring social/ethical norms has a dangerous far-reaching results that nobody should want, and this Kinder Morgan dispute is one of them.

 

It is completely bizarre to me that NDP blocks TMX yet wants LNG investment.

 

The answer to this one is:

[*]BC makes will make piles of money from LNG. It makes basically no money from KM, but does take on the risk of an oil spill. So, for BC, there are huge piles of risk, and no reward from KM.

[*]A dilbit tanker spill near Vancouver will kill the ocean, cause a spike in cancer in the lower mainland, kill housing prices, and have many other negative effects costing the province billions. An LNG tanker spill will cause smelly air for a day or two until all the NG evaporates.

[*]Natural gas creates far less CO2 emissions than mining the tar sands.  Gas still emits CO2, but for moderates who recognize that it's impossible to eliminate all fossil fuel usage overnight, natural gas is an acceptable alternative.

[scorpioncapital]

I have seen great societies without natural resources, and I have seen nightmare societies with lots of natural resources.

 

 

[TBW]

Richard, I think we would agree on lots of things but I think you are a bit mistaken in some of your assertions about TMX. 

 

A couple things to remember:

 

TMX was brought in conjunction with carbon tax, can't forget that.  I think carbon tax is very important and needed.  So I think the deal was pragmatic, we need capital to move away from fossil fuels, in meantime here is a pipeline that will be safer, save $4.1bil per year and we have increasing future carbon taxes (force closure of coal power plants).  While I would very much agree with you on govt and housing issues, in this case the deal appeared to be fair.  Process was lengthy and elected gov't etc, you can protest and make your voice heard but you can't break the law/constitution.

 

1) BC does benefit directly.  Clark negotiated that TMX pays $996mil to BC over next 20years.  Does not include other benefits jobs, etc.

 

2) Agree spill would be bad and worse than LNG.  However, there have been no incidents and while probability is increased, it is still low, and ignores risks to crude by rail.  I think crash of house prices as a result is exaggerated (those things will crash without a spill).

 

3) Not so sure I agree here.  Apples to apples basis natgas has less CO2 emissions.  But we aren't talking about that.  In this case have to build huge LNG plant (lots of Co2), LNG process to transport lots of CO2, and natgas production has had lots of methane emissions (from well, along pipe etc), that if you take into account unfortunately CO2 footprint from natgas can be much worse than it seems.  I could be wrong, but i think TMX is bringing more crude, but its adding to capacity, so not much CO2 from construction.  While it could still be true that LNG produces less CO2, not sure it is as simple as it seems.

 

Not to totally bash LNG, I do think BC should have at least one plant.  Just giving you some of the other issues I have been considering.

 

 

[RichardGibbons]

TMX was brought in conjunction with carbon tax, can't forget that.  I think carbon tax is very important and needed.  So I think the deal was pragmatic, we need capital to move away from fossil fuels, in meantime here is a pipeline that will be safer, save $4.1bil per year and we have increasing future carbon taxes (force closure of coal power plants). 

 

I agree that the carbon tax is important, but I'm convinced that most people believe that linking the carbon tax to the pipeline is bogus. It's likely that Keeney will become the premier of Alberta next year, and he has come out multiple times saying that he intends to scrap the carbon tax, well before this pipeline issue began making national news again. If people actually believed that there was a real link between the carbon tax and the pipeline, then I think the debate would be very different.

 

I'm curious, actually. If Kenney is elected and eliminates the carbon tax, would your reaction be, "then shut down the pipeline"? I suspect that few people will have this reaction (except those who already oppose the pipeline who just want another argument against it).

 

1) BC does benefit directly.  Clark negotiated that TMX pays $996mil to BC over next 20years.  Does not include other benefits jobs, etc.

 

I missed this.  However, a present value of less than $350M (35M per year, 8% discount, 20 years) doesn't actually constitute much value. On top of that, gasoline prices to the lower mainland are expected to increase as a result of the new pipeline. BC consumes about 5.7B litres a year of gas. If you assume a 40% of this is in the Lower Mainland, then the estimated 2c increase in gasoline prices costs residents an extra $45M. So, it's somewhere between a wash to a mild economic disincentive for BCers.

 

2) Agree spill would be bad and worse than LNG.  However, there have been no incidents and while probability is increased, it is still low, and ignores risks to crude by rail.  I think crash of house prices as a result is exaggerated (those things will crash without a spill).

 

Crude by rail is a straw man. Equivalent quantities of dilbit won't be shipped by rail. We know this because they can already do this, but they aren't. What's more, cleaning up a spill on land is way easier than cleaning up a spill in the ocean. Looking at "no incidents", there have been about 20 oil spills since 2015. I think real estate will fall either way, but I think it will fall harder if the city stinks for a few months, beaches are covered in sludge and dead wildlife, and cancer rates for residents skyrocket for a few decades.  (Personally, I care a bit about a pipeline spill, but a lot about a tanker spill.)

 

3) Not so sure I agree here.  Apples to apples basis natgas has less CO2 emissions.  But we aren't talking about that.  In this case have to build huge LNG plant (lots of Co2), LNG process to transport lots of CO2, and natgas production has had lots of methane emissions (from well, along pipe etc), that if you take into account unfortunately CO2 footprint from natgas can be much worse than it seems.  I could be wrong, but i think TMX is bringing more crude, but its adding to capacity, so not much CO2 from construction.  While it could still be true that LNG produces less CO2, not sure it is as simple as it seems.

 

This is an intriguing argument.  I would really like to see the emissions math on this.  I've said elsewhere that I mildly support LNG because of my argument above (net improvement in emissions), but could be convinced either way.  If the LNG has the same emissions profile as tar sands (which themselves are far worse than regular oil), then that would be enough to flip me around to strongly opposing LNG.

[TBW]

Fair point about Kenney.  If carbon tax was subsequently repealed I would not be happy.  I think the two should remain linked.

 

My opinion is that TMX will get built.  Both law and economics is on its side.

[Cardboard]

I had thought that the Vancouver people were better than all of us: greener, smarter, etc.

 

High gas prices? Traffic jams? What is this all about? You don't all drive EV's over there, share ride and use public transportation?

 

So is this hypocrisy or self-inflicted?

 

http://www.parkland.ca/en/investors/news/article?news-id=20171001005041

 

The Parkland refinery, which interestingly enough is in none other place than Burnaby B.C., produces 55,000 barrels/day from light sweet crude.

 

So here is a thought. Why doesn't B.C. start right now a project to upgrade (process heavy) and really increase capacity of that refinery?

 

This would really solve many problems:

1- Lower gasoline prices in Vancouver.

2- Export to the world refined products or higher value add and use best in class refining methods vs what we see in China with their tea pot refineries.

3- Heavy crude would be processed inland and avoid this dilbit spill debate over water.

4- Canada would supply the world with some of the strictest producing methods which help reduce CO2 emissions instead of letting other countries produce oil anyway while they flare natural gas.

 

Cardboard

 

[CorpRaider]

I never imagined it would be such a hard slog since there is already a pipeline there.  Canada is interesting. 

[TBW]

Can't say that I am a Morneau fan, but I thought he did a good job laying out the issues here:

 

https://www.bnn.ca/video/morneau-government-will-use-all-tools-available-to-get-pipeline-built~1368633

[Spekulatius]

I had thought that the Vancouver people were better than all of us: greener, smarter, etc.

 

High gas prices? Traffic jams? What is this all about? You don't all drive EV's over there, share ride and use public transportation?

 

So is this hypocrisy or self-inflicted?

 

http://www.parkland.ca/en/investors/news/article?news-id=20171001005041

 

The Parkland refinery, which interestingly enough is in none other place than Burnaby B.C., produces 55,000 barrels/day from light sweet crude.

 

So here is a thought. Why doesn't B.C. start right now a project to upgrade (process heavy) and really increase capacity of that refinery?

 

This would really solve many problems:

1- Lower gasoline prices in Vancouver.

2- Export to the world refined products or higher value add and use best in class refining methods vs what we see in China with their tea pot refineries.

3- Heavy crude would be processed inland and avoid this dilbit spill debate over water.

4- Canada would supply the world with some of the strictest producing methods which help reduce CO2 emissions instead of letting other countries produce oil anyway while they flare natural gas.

 

Cardboard

 

A refinery is way dirtier than a pipeline and even nowadays, they stink to heaven. People who have been to Bakersfield , CA or New Jersey know.

 

I think Richard makes a good point about the piplinene not being in the self interest of the local population. BC and Vancouver are wonderful places and a spill would be tragedy.

[Cardboard]

You are wrong. Local populations don't dictate whatever they want based on their self interest or desire.

 

When they put up windmills, there are often people who are upset since it ruins their view, landscape and brings even noise. However, these mostly go forward and these people concerns are ignored.

 

There are nuclear plants close to communities. Is there anything more risky to human health than radiation? Yet they are there too and some pretty close to New York city unless you are unaware.

 

Florida, the Gulf of Mexico and California have beautiful beaches yet there are oil vessels carrying crude moving all around. Examples of that are worldwide.

 

Regarding a refinery or oil vessels, they are already there in Vancouver! So the stink and risk is already in place.

 

Cardboard

[scorpioncapital]

It's very simple, BC was not offered enough of a bribe as is commonly done pretty much everywhere in the world. Don't fall for this enviromementalist stuff, they are the most money hungry of all ;)

 

 

[Spekulatius]

You are wrong. Local populations don't dictate whatever they want based on their self interest or desire.

 

When they put up windmills, there are often people who are upset since it ruins their view, landscape and brings even noise. However, these mostly go forward and these people concerns are ignored.

 

There are nuclear plants close to communities. Is there anything more risky to human health than radiation? Yet they are there too and some pretty close to New York city unless you are unaware.

 

Florida, the Gulf of Mexico and California have beautiful beaches yet there are oil vessels carrying crude moving all around. Examples of that are worldwide.

 

Regarding a refinery or oil vessels, they are already there in Vancouver! So the stink and risk is already in place.

 

Cardboard

 

It’s a big difference if something is already there or if you build something new. Also keep in mind that while there are tankers in the Bay Area (Richmond) and LA to supply refineries, Offshore drilling pretty much stopped after an oil spill near Santa Barbara.

 

Local residents cannot always stop new projects,  it they can fight them with tooth and nails - sometimes they win, sometimes they lose. I am not saying it is right or wrong, but there is solely self interest at work, and I have to say, I can’t blame them.

 

I am fairly sure that most board members would do the same if they were in the same situation, I don’t have the impression that most here would put community interest before themselves, not if they work in the financial sector for sure. 8)

[RichardGibbons]

I think it's kind of interesting that Cardboard and Andrew Weaver (BC Green Party Leader) think refining the dilbit might solve this problem. Cardboard wants the refinery in BC, while Weaver wants it in Alberta.

 

Cardboard, how would you feel about the dilbit being refined in Alberta and only refined products being sent over the new pipeline? I'm curious if there is actually a compromise here.

 

That solution wouldn't make me completely happy (because I care about CO2 emissions), but it would be far more palatable than the current situation.

 

(I think the reason that this isn't a no-brainer solution for the pro-oil folks is because it's more costly to ship refined products.)

[Spekulatius]

I think it's kind of interesting that Cardboard and Andrew Weaver (BC Green Party Leader) think refining the dilbit might solve this problem. Cardboard wants the refinery in BC, while Weaver wants it in Alberta.

 

Cardboard, how would you feel about the dilbit being refined in Alberta and only refined products being sent over the new pipeline? I'm curious if there is actually a compromise here.

 

That solution wouldn't make me completely happy (because I care about CO2 emissions), but it would be far more palatable than the current situation.

 

(I think the reason that this isn't a no-brainer solution for the pro-oil folks is because it's more costly to ship refined products.)

 

Building a refinery is very expensive and I think it is actually more dangerous to transport refined products, even in a pipeline, because they are more volatile and flammable. I agree that every solution should be discussed.

[Cardboard]

I am open to all kinds of solutions. And unless you missed it, the Sturgeon refinery is starting up this summer in Alberta.

 

Let's face it folks. The world wants oil and WILL get it no matter what Vancouver people think, say or do. That is the reality. So isn't better for Canada to be in the game and do it in a responsible manner than let other countries do it with much less care: flaring natural gas, little to no SOx regulation?

 

Right now Canada is U.S.'s ....... for oil. We give it away to them, they refine it and export it to the world. Even some to Canada! Then they fund protest groups so that it remains landlocked so that the good times can continue.

 

And it goes further than that. As a country, we are not even smart enough to be self sufficient. Canada imports over 700,000 barrels/day of oil to feed East Coast refineries, even some comes from the U.S.!

 

https://www.neb-one.gc.ca/nrg/ntgrtd/mrkt/snpsht/2017/02-04cndncrlmprtsdcln-eng.html

 

Is this done for economical reasons? No. Western Canadian Select sells right now for $52 U.S. (after quite a rally to reduce the discount!!!), Edmonton light sells for $61 U.S. and we pay $72 U.S. to import through the St Lawrence River. It took years to reverse the direction of flow of Line 9 from Sarnia to Montreal and expand capacity by a tiny 60,000 barrels/day (don't even think the expansion is done yet). Then people complain at the pump  ::)

 

Cardboard

 

 

[Cardboard]

While they are worried about dilbit spills in double-hull vessels, see what our Vancouverites are up to:

 

https://georgiastrait.org/2013/12/the-greenest-city-or-the-biggest-coal-exporter-in-north-america/

 

Coal country baby!!! They must love Trump over there.

 

Cardboard

[Cardboard]

Climate Barbie agrees. Our reputation is at stake.

 

https://www.bnn.ca/business-day-pm/environment-minister-trans-mountain-s-construction-about-more-than-just-a-pipeline-being-built~1369730

 

Cardboard

[RichardGibbons]

While they are worried about dilbit spills in double-hull vessels, see what our Vancouverites are up to:

 

https://georgiastrait.org/2013/12/the-greenest-city-or-the-biggest-coal-exporter-in-north-america/

 

Coal country baby!!! They must love Trump over there.

 

Hmm, so your argument is essentially, "environmentalists lost the fight against coal, therefore they shouldn't fight Kinder Morgan."  No wait, that doesn't make sense.  "Environmentalists lost the fight against coal, so they're hypocrites." No, that doesn't makes sense either. "Environmentalists lost the fight against coal, and dilbit isn't as bad as...."  No, that's not right....

 

I'm pretty confused about what your argument is here. Are you just suggesting that we should lower coal exports? Because if that's your point, I'm good with that.