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Obama Approves Major Border-Crossing Fracked Gas Pipeline Used to Dilute Tar Sands

8:39 pm in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog

Kinder Morgan logo

Kinder Magic?

Although TransCanada’s Keystone XL tar sands pipeline has received the lion’s share of media attention, another key border-crossing pipeline benefitting tar sands producers was approved on November 19 by the U.S. State Department.

Enter Cochin, Kinder Morgan’s 1,900-mile proposed pipeline to transport gas produced via the controversial hydraulic fracturing (“fracking”) of the Eagle Ford Shale basin in Texas north through Kankakee, Illinois, and eventually into Alberta, Canada, the home of the tar sands.

Like Keystone XL, the pipeline proposal requires U.S. State Department approval because it crosses the U.S.-Canada border. Unlike Keystone XL – which would carry diluted tar sands diluted bitumen (“dilbit”) south to the Gulf Coast – Kinder Morgan’s Cochin pipeline would carry the gas condensate (diluent) used to dilute the bitumen north to the tar sands.

“The decision allows Kinder Morgan Cochin LLC to proceed with a $260 million plan to reverse and expand an existing pipeline to carry an initial 95,000 barrels a day of condensate,” the Financial Post wrote.

“The extra-thick oil is typically cut with 30% condensate so it can move in pipelines. By 2035, producers could require 893,000 barrels a day of the ultra-light oil, with imports making up 786,000 barrels of the total.”

Increased demand for diluent among Alberta’s tar sands producers has created a growing market for U.S. producers of natural gas liquids, particularly for fracked gas producers.

“Total US natural gasoline exports reached a record volume of 179,000 barrels per day in February as Canada’s thirst for oil sand diluent ramped up,”explained a May 2013 article appearing in Platts. ”US natural gasoline production is forecast to increase to roughly 450,000 b/d by 2020.”

Before Eagle Ford, Kinder Morgan Targeted Marcellus

Pennsylvania’s Marcellus Shale basin was Kinder Morgan’s first choice pick for sourcing tar sands diluent for export to Alberta. It wasn’t until that plan failed that the Eagle Ford Shale basin in Texas became Plan B.

Known then as the Kinder Morgan Cochin Marcellus Lateral Project proposal, the project fell by the wayside in February 2012.

“The company’s Cochin Marcellus Lateral Pipeline would have started in Marshall County, West Virginia, and transported natural gas liquids from the Marcellus producing region of Pennsylvania, West Virginia and Ohio,” wrote the Mount Vernon News of the canned project. [It] would [then] carry the [natural gas] liquids to processing plants and other petrochemical facilities in Illinois and Canada.”

“Kinder Magic”: More to Come?

Industry market trends publication RBN Energy described Kinder Morgan’s dominance of the tar sands diluent market as “Kinder Magic” in a January 2013 article.

“These are still early days for the developing condensate business in the Gulf Coast region,” RBN Energy’s Sandy Fielden wrote. “Plains All American and Kinder Morgan are developing the potential to deliver at least 170,000 barrels per day of Eagle Ford condensate as diluent to the Canadian tar sand fields in Alberta by the middle of 2014.”

Fielden explained we could see many more of these projects arise in the coming years.

“We have a sense that before too long there will be many more condensate infrastructure projects showing up like ‘magic’ in midstream company presentations.”

While the industry press coverage sounds optimistic, it doesn’t account for the concurrent rise of public opposition to dirty energy pipelines and expansion plans in the fracking and tar sands arenas, so only time will tell the fate of Cochin and its kin.

Shale Gas Bubble Bursting: Report Debunks “100 Years” Claim for Domestic Unconventional Oil and Gas

1:56 pm in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog

Food and Water Watch (FWW) released a report today titled “U.S. Energy Security: Why Fracking for Oil and Natural Gas Is a False Solution.”

Rows of gas tanks

Gas from a shale deposit in Pennsylvania

It shows, contrary to industry claims, there aren’t 100 years of unconventional oil and gas sitting below our feet, even if President Barack Obama said so in his 2012 State of the Union Address. Far from it, in fact.

The report begs the disconcerting question: is the shale gas bubble on its way to bursting?

FWW crunched the numbers, estimating that there are, at most, half of the industry line, some 50 years of natural gas and much less of shale gas. This assumes the industry will be allowed to perform fracking in every desired crevice of the country. These are the same basins that advocates of hydraulic fracturing (“fracking”) claim would make the U.S. the “next Saudi Arabia.”

“The popular claim of a 100-year supply of natural gas is based on the oil and gas industry’s dream of unrestricted access to drill and frack, and it presumes that highly uncertain resource estimates prove accurate,” wrote FWW. “Further, the claim of a century’s worth of natural gas ignores plans to export large amounts of it overseas and plans for more domestic use of natural gas to fuel transportation and generate electricity.”

The race is on for the gas industry to export unconventional gas on the global market, implement a gas-powered utilities sector, and create a gas-powered vehicle market. Due to these races, FWW says that the resource is being depleted at a rate far more quickly than the industry would like to admit to the mass public, writing,

The oil and gas industry’s plans to export shale gas, America’s supposed ticket to energy security, reveal that the only thing the industry seeks to secure is its bottom line. But the oil and gas industry’s push to increase U.S. dependence on natural gas in the transportation and electricity sectors is perhaps even more insidious.

The unfortunate reality is that peak domestic production may have passed, and over the coming years, production rates will likely decline. This means short-term, profit-oriented thinking will lead to contaminated air, polluted water, human health impacts, and even the industrialization of university campuses. Most importantly of all, it means a continued assault on the global climate, which makes for deadly and expensive extreme weather events. Think Hurricane Sandy.All for a few decades of further fossil fuel addiction that doesn’t solve any of the problems that future generations will face.

FWW explained,

The United States consumed about 18.8 million barrels of oil per day in 2011, yet it produced only an estimated 0.55 million barrels of tight oil per day. The EIA does project that tight oil production will increase, but to only about 1.2 million barrels per day between now and 2020, peaking at 1.33 million barrels per day in 2029 before starting to decline. This peak would amount to only about 7 percent of the 18.8 million barrels per day consumed in the United States in 2011.

It’s these numbers that have moved analysts to discover that the unconventional oil and gas craze is a potential economic crisis rather than a blessing, not to mention the accompanying climate and ecosystem costs and consequences of fracking the future.