New pipeline policy could solve Keystone XL problems

New pipeline policy could solve Keystone XL problems 06/08/14
by John Brian Shannon John Brian Shannon

Which are the most dangerous pipelines?

It’s an easy answer. Old pipelines.

Oil companies don’t advertise the first 15 years as the safest pipeline years. All bets are off after 30 years. And almost every pipeline spill in North America shows a pipeline well past 30 years of age.

One of the biggest problems contributing to leaks and ruptures is pretty simple: pipelines are getting older. More than half of the nation’s pipelines are at least 50 years old. — How Safe are America’s 2.5 Million Miles of Pipelines? published by propbulica.org

The average age of North America’s petroleum pipelines is getting older all the time (as there are few new pipelines are being built) so the existing pipeline network continues to age. But some pipelines built 30+years ago are so fragile from a maintenance perspective that they shouldn’t be allowed to transport toxic crude oil, dilbit, petroleum distillate, bunker fuel, or coal oil.

Forty-one per cent of U.S. oil pipe was built in the 1950s and 1960s; another 15 per cent of the country’s 281,000-kilometre network was built before then. In Alberta, 40 per cent of pipe was built before 1990. — Globe and Mail

How long does it take to ‘pay off’ a pipeline investment?

Depending upon the terrain a pipeline is traversing, pipelines can cost anywhere from thousands of dollars per mile up to millions of dollars per mile, especially when laying them through populated areas or under or above rivers and lakes. It can cost billions of dollars to build one pipeline.

Of course, if you want to move petroleum through a pipeline to your oil refinery, you are going to pay a significant dollar amount to transport that oil across the continent. Each oil refinery can refine up to one million barrels of oil per week. The oil refinery has only so much storage available to it on-site so it usually ships the refined product out ASAP via another pipeline system to a rail network, or direct to the customer via yet another pipeline.

U.S. petroleum pipeline map
U.S pipeline map. Toxic liquids show in red colour, while natural gas shows in blue. Image by propublica.org

After 15 years of operation, pipeline companies finally ‘break-even’ on their original investment

“Now we can finally make some money!”

Pipelines are quite costly to gain approval for from national and local regulators, to buy or lease the land, to design, build and operate. It also is the case that oil companies pay millions of dollars per year to the pipeline companies to move their liquids around. It is an annual business of billions, not millions.

We all need to make money and pass the ‘break-even’ point in our investments

We all want and need to make a return on investment (ROI) which is the reason we start businesses in the first place. But, just at the point that a pipeline has finally broken-even investment wise for its investor group, it is beginning to seep oil at the gaskets (called ‘weeping’) and also leak oil at the pump stations, and at areas where the pipeline has been disturbed by ground movement due to frost, ground settling, or earthquake movements. Some of this weeping can continue on for many years before anyone visits that remote area, which may not have been visited since the construction of the pipeline. Running toxic liquids across a continent safely, but economically, are mutually exclusive matters.

But without oil pipelines, our economy would grind to a halt within 90 days

Without pipelines, only coastal cities would be able to receive gasoline, diesel, kerosene, or other liquids used for transportation fuels, via international shipping lines. Other users of petroleum, such as chemical, plastics, and pharma companies would need to relocate to coastal areas to receive their petroleum ingredients.

It is a case of need vs. greed

  1. “We need the oil, keep it coming,” say consumers.
  2. “We need to keep our environment clean,” say a rapidly growing number of citizens/consumers.
  3. “We need to recoup our pipeline investment and make a profit in order to stay in business and we do it all for groups #1 and #2,” say the pipeline companies.

If ever there were a situation calling out for compromise, this has got to be it.

But the simple fact is, old pipelines weep plenty of oil and eventually burst, releasing tons of toxic liquids into the environment. New pipe does not burst or leak — unless it was to be hit by a derailed train, a transport truck, or an airplane crash — all of which are very unlikely events.

A mechanism for safe petroleum transport that works for all

Add a mile of new pipeline | Remove a mile of old pipeline

There are many pipeline systems that have been transporting petroleum for 30+ years in North America. These old pipes weep oil everyday. You might not see it, some of them are underground, or in wilderness areas where pipelines often traverse, or are just not accessible for viewing by the pubic or inspectors for that matter.

Some pipelines in North America are 45+ years old and they are big leakers — and just like purchasing carbon credits — one pipeline company could sell their RRR credits to another company that is ready to build a new pipeline.

It may seem odd for you to hear this solution from a renewable energy proponent; We should build more new pipelines!

What? Yes, but only if we completely remove 30+ year old pipelines on a mile-per-mile basis and remediate the soil and replant native species of plants along the historic route of the removed pipeline.

If pipeline company “A” wants to build a new pipeline, (such as Keystone II, for example) then government regulators should require that for every mile that they want to install new pipeline, the pipeline company is required to completely remove and remediate the soil and plant life, from whence an old pipeline has been removed.

This would help us to get rid of thousands of miles of old, leaking, and rusting pipelines that even the oil companies have forgotten about. They are environmental catastrophes just waiting to happen.

You can never completely empty a pipeline so they just sit there decade after decade weeping oil into the groundwater. Some old pipelines, although very leaky, are kept in place just in case of emergency so oil can be quickly diverted to the old pipeline for transport to a different junction in the system — and thereby still arrive at the oil refinery (and likely a day late and a few tens of barrels of oil short).

But that isn’t the best solution for the environment.

The best solution is easier approvals for newer and safer pipelines, contingent upon Retiring, Removing and Reclaiming (RRR) the land on the same total mileage of 30+ year old pipeline in the North American petroleum distribution network.

If Keystone II is 3500 miles of shiny new, high-tech, and state-ot-the-art pipeline, that’s great. It’s orders of magnitude less likely to leak, than 3500 miles of old pipeline.

All pipelines over 30 years old should be allowed to qualify for this removal/remediation programme. And the pipeline companies signing up for the Retire, Remove and Remediate (RRR) pipeline plan should receive tax incentives to assist in this regard. And, bonus, they can sell the land, once it is remediated.

Birth of a new industry

With the high prices of metals these days, oil and pipeline companies could find that passing the actual RRR work to another company could be the way to go. Even if the old pipe and pumps and pumphouses, etc, end up being sold for the scrap metal value, millions of tons of 30+ year old pipeline is sitting on the ground or just underground, waiting to be picked up and recycled.

Add in soil and plant remediation, and you have a whole new business model. A business where the workers could feel proud of the work they do!

“What do yo do for a living?”

Wouldn’t it be nice for an petroleum industry employee to be able to reply;

“I remove old, leaky pipelines, remediate the contaminated soil, replant the areas with native plants, and recycle millions of tons of old, leaky, pipeline metal.”

That has got to be the feelgood moment of the year, for any oil company employee.

Not your typical oil company employee job description

Yet, with some executive-level decisions and with a common-sense regulatory framework, RRR could finally solve the problem of the many thousands of miles of dormant but still weeping pipelines — and spawn a whole new business model — while helping to protect our North American ecosystems that wildlife depend on.

The Next Trillion-dollar Business

by John Brian Shannon

High energy costs to pump crude oil from the bottom two-thirds of an oil reservoir is one of two main reasons that some of the largest oil wells have been capped and abandoned. Therefore, until recently much of the global proven reserves have lain dormant in so-called ‘ageing’ or ‘spent’ oilfields.

Carbon Capture and Sequestration (CCS) can allow oil companies to resume extraction of crude oil at previously abandoned facilities.

This kind of CCS is a fine way to alleviate greenhouse gas emissions by storing the CO2 deep underground forever — and helping to help bring crude oil to the surface.

https://i0.wp.com/www.ico2n.com/wp-content/uploads/2010/07/ICO2N-Enhanced-Oil-Recovery-Carbon-Capture-and-Storage.jpg
ICO2N Enhanced Oil Recovery – Carbon Dioxide Capture and Storage

Recently, and where vast quantities of CO2 are available locally from industry, millions of tons of CO2 gas have already been pumped deep into the underground crude, increasing the volume and raising the overall pressure of the oil reservoir, thereby ‘forcing’ more crude oil to the surface. This is starting to become a common practice in Canada, the U.S.A., and in Saudi Arabia.

More often than not, this process has made economic sense based on it’s own economic merit, but government subsidies have also been employed on and off over the years — on an experimental and case-by-case basis.

So, why isn’t this being done everywhere if it is such a great idea? It turns out that much of the industry-produced CO2 that is available for CCS use is already being used for that purpose. But two factors have (so far) limited more CCS injection for oilfield rejuvenation:

  1. The remote locations of some oilfields can limit the use of industrial CO2 emissions for use, as pipelines to deliver the gasses to capped wells are expensive.
  2. The high energy costs of pumping supercritical (liquified) greenhouse gasses deep underground at high pressure — and pumping the crude oil up the pipe and out through the wellhead

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And… Voila! Just like that, high energy costs are no longer a factor in that equation — thanks to the dramatic fall in solar panel prices over the past 26 months! What?

It’s true! Up ‘till now, the high cost of all kinds of energy have prevented many CCS projects from going forward, as Carbon Capture and Storage requires huge amounts of energy. But solar costs have now dropped so dramatically that free energy from the Sun is being harnessed to inject liquified CO2 deep underground to rejuvenate massive oilfields — while at the same time, sequestering millions of tons of harmful greenhouse gasses.

Semprius Inc. 33.9% efficiency solar panel arrays mounted on Solar Tracker

It’s a win-win for the environment. Some might argue that point. But each year, our civilization is consuming more crude oil producing billions more tons of greenhouse gasses.

“The burning of fossil fuels produces around 21.3 billion tonnes (21.3 gigatonnes) of carbon dioxide (CO2) per year, but it is estimated that natural processes can only absorb about half of that amount, so there is a net increase of 10.65 billion tonnes of atmospheric carbon dioxide per year…” — Wikipedia Fossil Fuel

We can continue to allow those gasses to escape unimpeded into the atmosphere, further warming the planet — or we can inject billions of tons of these gasses underground where they will stay for millennia.

The millions of tons of CO2 per year already being injected underground (now) and billions of tons of CO2 per year (in the near future) can only be seen as positive. If only all of the industry-produced CO2 could be so treated! Suddenly, that noble goal seems a lot closer to becoming a reality.

Who could have predicted that the oil industry and the solar industry would become such strong and complementary partners in this great and lofty enterprise?

Highly Recommended CCS articles:
JOHN BRIAN SHANNON

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Harper Should Lobby for Free Trade with China | MY COMMENT

Harper Should Lobby for Free Trade with China — The Huffington Post – Canada
by Yuen Pau Woo, President and CEO, Asia Pacific Foundation of Canada   January 13, 2012

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MY COMMENT — Free Trade agreements are becoming more common world-wide­. It is up to the countries involved to set their own particular free trade agreement rules and conditions­. Every bi-lateral agreement is different.

But it is a trade matter — it is not a venue to browbeat the other country over their human-righ­ts situation etc. it is simple matter of you sell us X and we will pay Y, on as many products or services as both sides decide to include in the accord.

One thing that we like about this scenario is that by engaging in trade with Western nations developing nations learn our ways. This helps them to progress in real time in all matters, including among other things, best practices for the business community, human rights, environmen­tal legislatio­n and the reasons for those standards.

Where there is better communicat­ion — better relationsh­ips result.

A FTA with China, Japan, India and other countries will facilitate better relationsh­ips with those countries AND improve Canada’s economy.

Will an FTA solve every problem? No, obviously not. There will never be one big agreement that will address every identified negative policy or procedure in a developing country. An FTA will however, play an integral part of that process going forward.

Terry Glavin: Canada sells the oilsands to China. Then complains about foreign interference! | MY COMMENT

Canada sells the oilsands to China. Then complains about foreign interference! — National Post
By:Terry Glavin  January 13, 2012

MY COMMENT — Must it always be about extreme positions? Why must it be only about eco-terrorists or big business? Can’t Canada, one of the most developed countries on Earth, extract this resource AND do it in the least harmful way to the environment? Of course we can!

We have world-class technology available now to reduce the impact on the environment, we have a majority government with the necessary expertise to enact legislation to promote more sustainable development and we have ever more billions of dollars being invested by the world’s most powerful countries.

It’s so simple. The government calls a meeting of all stakeholders, who decide upon the “best practices” available, enact legislation with teeth to that effect and invite anyone who doesn’t want to follow that legislation to leave Canada.

Transporting crude oil by pipeline and supertanker is the absolute worst-case scenario. There will be a spill on Canada’s pristine coastline and eventually in BC’s scenic interior.

A better plan from an environmental viewpoint, is to merely ship the raw tar sands product, in the same way that coal has been transported to Asia from BC and Alberta, for decades, with no problems.

Another way that will give Western Canada the opportunity for value-added product (more jobs) is to highly-refine the crude oil into a very clean, fully refined, low-toxicity product and ship it from near Vancouver — a much safer waterway than Kitimat.

In addition to this, tar sands can be highly-refined into ethane gas and sent to Kitimat by a clean gas pipeline and picked up by LNG tanker. LNG tankers are truly innocuous, compared to crude oil tankers. In case of leak, practically zero deaths of ocean life and little, if any destroyed land environment as would be the case with a crude oil spill, LNG merely evaporates into the air, unless ignited — so keep the gas pipeline 5 km back from any populated areas or highway/railway.

See, it’s simple. We merely need a better plan – than the one presently under consideration!

A highly significant visit | MY COMMENT

A highly significant visit — Arab News
January 14, 2012

MY COMMENT — There is no doubt at all that the new China is a powerful balancing force for this world in this 21st century. Under the leadership of President Hu Jintao and Prime Minister Wen Jiaboa China has grown exponentially and not just in the economic sphere.

Holding the Olympics in China, the establishment and enhancement of bi-lateral ties with many nations and the financing and partnership in mega-projects by China, such as the LHPP in Lesotho, would have been unthinkable prior to year 2000.

China has recognized the need to convert it’s electricity grid to renewable energy as this becomes more economically feasible. With over 1.35 billion citizens, many living in close proximity to industry, clean air is at a premium. I wish China’s leaders well and hope their affinity for clean electricity continues and that with lower renewable energy costs now apparent, more of that capacity will be built.

China may have more to gain from this than any other country – and that’s even before factoring in millions or even billions of yuan of value-added green energy products that China can export to other nations. It would rank as yet another transformation China the country, could add to it’s international CV.

I predict, especially as time progresses, that those nations, corporations and individuals which treat China with respect will fare very well, as China has just begun it’s growth to full potential.