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.

SOTU speech supports SAFE energy program

SOTU Jan 27, 2014
SOTU Jan 27,2014. (Official White House Photo by Amanda Lucidon)

PRESS RELEASE January 28, 2014

White House Continues Support for an Energy Security Trust to Combat American Oil Dependence

Washington, D.C. – Securing America’s Future Energy (SAFE) applauds the White House’s continued commitment to improving American energy security and protecting our economy by linking supply and demand policies to combat our country’s oil dependence. The White House’s version of an Energy Security Trust Fund (ESTF) is again included in this year’s State of the Union’s broader set of proposed policies. President Obama continues to propose funding the Trust with $200 million annually in mandatory spending transferred directly from federal royalty revenue generated by oil and gas production.

As the author of a similar policy that inspired the President’s proposal, SAFE has proposed the establishment of an Energy Security Trust Fund that would use revenues from oil and gas development on federal lands and waters currently unavailable to the industry to pay for research and development (R&D) of technologies that have the potential to significantly displace oil in the transportation sector, such as improvements to electric vehicle batteries and compressed natural gas (CNG) storage tanks.

After topping $900 billion in 2012, American spending on petroleum fuels remains at near-record levels. Oil dependence continues to pose a severe threat to America’s economy and national security, tying our fate to the highly unpredictable, cartel-influence global oil market.

The Energy Security Trust Fund concept enjoys bipartisan support and is under active consideration on Capitol Hill. Senator Lisa Murkowski (R-AK), Ranking Republican on the Energy and Natural Resources Committee, has released a detailed energy policy blueprint endorsing an approach similar to SAFE’s.

SAFE is encouraged by continued support for the Energy Security Trust Fund and looks forward to the next steps in advancing American energy security.

Key facts about the Energy Security Trust Fund:

What is the Energy Security Trust Fund?

  • SAFE proposed the creation of an Energy Security Trust Fund (ESTF) in its National Strategy for Energy Security, which was released in December of 2012.
  • The fund creates a mechanism to harness revenues from expanded domestic energy production in order to invest in developing the transportation technologies and fuels of the future.
  • President Obama proposed the creation of a similar policy, an Energy Security Trust, in his 2013 State of the Union address and cited SAFE’s Energy Security Leadership Council as the source of his idea. Although the source of funding is different between SAFE and the President’s proposals, the use of oil revenues to fund breakthroughs in transportation is a common theme in both versions.

How would the Fund be seeded?

  • SAFE has proposed that the ESTF be seeded with revenues from oil and gas development on federal lands and waters that are currently unavailable to the industry, up to $500 million annually.
  • President Obama has proposed seeding the Fund from existing royalty streams, up to $200 million annually.
  • Neither proposal would pose any additional financial burden on oil companies.
  • The funding structure should be established as mandatory spending to provide consistent funding to accelerate breakthroughs in technologies that increase America’s energy security.

What should the Fund be used for?

  • The purpose of the fund would be to aggressively invest in research, development and demonstration (R&D) of advanced transportation technologies and fuels.
  • The Fund should be housed and administered by the Department of Energy, and projects will be funded through a competitive, peer-reviewed process.
  • The Fund would not provide direct funding for commercialization activities.
  • The 2011 “Quadrennial Technology Review” asserted that the “DOE is underinvested in the transportation sector, relative to the stationary sector…Yet, reliance on oil is the greatest immediate threat to U.S. economic and national security…”

What is the fiscal impact of the Fund?

  • SAFE’s proposal would not have any fiscal impact because revenues generated by new oil and gas drilling in areas not currently available to the industry are not in the budget.

Who supports the Energy Security Trust Fund?

  • The Washington Examiner endorsed SAFE’s proposal in November 2013: “SAFE has an energy proposal that merits bipartisan support.”
  • Senator Murkowski made a similar proposal in her “Vision 20/20” document and has solicited feedback on her draft legislation.
  • SAFE continues to work with both Democrats and Republicans in the House and Senate and believes that bipartisan and bicameral legislation will be introduced this year.

______________________________________________________________________________________________

Related Articles:

Massive Cape Wind Project Kicks Into High Gear

by Tina Casey.

The global wind turbine leader Siemens has just inked a deal to provide its offshore turbines to the massive new Cape Wind wind power project, and that one contract could shake the offshore wind power market to its core. You know what they say about waking the sleeping tiger, right?

For the past several years, other nations (notably the UK, China, Belgium, and Denmark) have been going at the offshore wind industry hammer and tongs while the US industry has been practically comatose, with just a couple of demonstration-scale projects to its credit. Cape Wind is going to change all that.

Cape Wind artist rendition (cropped)
Cape Wind artist rendition (cropped) courtesy of Energy Management Inc.
How Significant Is Cape Wind?

To give you an idea of offshore wind power potential in the US, a Stanford University study from 2009 estimated that the Atlantic Coast alone could provide enough offshore wind power for about one-third of the US, which translates into every major city along the eastern seaboard and everything in between.

As the first commercial offshore wind farm in the US, Cape Wind will be the anchor for a coordinated, multistate effort to tap into that potential, through an initiative launched by the Obama Administration called the Atlantic Offshore Wind Consortium.

As the first of its kind, Cape Wind illustrates the many hurdles faced by the US offshore wind industry, including local, state and federal permitting issues as well as lawsuits from landowners and other stakeholders in the Cape Cod region.

The expectation is that lessons learned from getting Cape Wind off the drawing board will help streamline the process in other coastal states. The Department of Energy is already anticipated that nationally, installed US offshore wind capacity will grow from virtually zero to 3.5 gigawatts in the next five years.

The Cape Wind Project and Siemens Wind Turbines

Cape Wind started picking up speed in 2011, when the project got its Department of Energy permit.

Cape Wind will consist of 130 wind turbines with a combined capacity of up to 420 megawatts. Its developer, Energy Management Inc., estimates that even in average winds the turbines will generate enough electricity for about three-quarters of Cape Cod and its islands.

Last spring, the project passed an important financing milestone, and the new contract with Siemens was just announced earlier this week, on December 23.

The contract calls for Siemens to provide its 3.6 megawatt offshore wind turbines along with a 15-year service agreement.

Green Jobs And Offshore Wind Power

Although Siemens’s global home is Germany, the company is careful to note that its US projects come along with US jobs and investment. According to company figures, about 60,000 people already work for Siemens in the US, and management of the Cape Wind contract will be conducted from US offices:

Siemens opened its North American Offshore Wind Office in Boston in 2010 to be closer to its U.S. and Canadian customers, and specifically to work with Cape Wind. Project management for the Cape Wind project will be managed from the Boston office, while the ESP [electric service platform] scope of work will be managed from the Company’s Transmission operations in Cary, North Carolina, and the long-term maintenance program will be managed from the company’s Americas headquarters located in Orlando, Florida.

Components for the Cape Wind’s offshore electric service platform (the part of the project that converts voltage from the turbines) will also be manufactured in Maine under a subcontract to the US firm Cianbro.

It’s worth noting that Maine’s political image has been somewhat mixed under the leadership of Governor Paul LePage, who has touted global warming as a good thing for the state’s economy, but Maine Senator Angus King has been a vocal advocate for climate management and he had this to say about the state’s role in Cape Wind:

I am very pleased that Cianbro, a Maine-based company and partner in UMaine’s floating offshore wind project, will join forces with Siemens and Cape Wind of Massachusetts to produce the offshore substation for an industry-leading offshore wind farm. By helping to generate renewable energy, and by putting New Englanders to work in the process, projects like this will not only benefit our environment, but our economy as well.

About Those Offshore Wind Turbines…

Energy Management went with an established global leader when it selected Siemens for the contract. The turbines are the same model used in a number of existing offshore wind farms and Siemens already has contracts to provide it for eight upcoming offshore projects.

Siemens’s SWT-3.6-120 model is designed specifically for sites with constrained capacity (the company also offers a model with a slightly higher capacity of 4.0 MW).

As part of an integrated offshore system, the turbines are equipped with a generous helping of automatic and remotely operated equipment, including Siemens’s proprietary WebWPS SCADA system, a vibration monitoring system that enables web-based reprogramming, and a self-diagnosing controller.

The turbines are also designed to start up automatically when wind speeds average about ten mph, increase their output at a steady rate as wind speed rises up to about 30 mph.

The turbines automatically “feather” into shutdown mode when wind speeds get too high (about 56 mph), and automatically reset once wind speeds drop.

The Solyndra Of Wind Power, Or Not

Let’s note for the record that Representative Darrell Issa (R-CA), head of the House Committee on Oversight and Government Reform, had Cape Wind in his sights last year, which is no surprise considering the Congressman’s reputation as a climate change denier.

With Issa sniffing around Cape Wind’s approval process, the predictable result was that conservative media began comparing Cape Wind to the notorious Solyndra bankruptcy.

As with so many of the Congressman’s investigations, the Cape Wind query appears to have gone nowhere, especially now that the Siemens wind turbine contract has been signed, sealed, and delivered.

However, as recently as October 13, Human Events, which bills itself as a platform for “powerful conservative voices,” was still pounding the “another Solyndra in the making” drum, so stay tuned.

Follow me on Twitter and Google+.

Psst, wanna get all the latest wind power news from CleanTechnica? Subscribe to our Wind Energy newsletter.

This article, Massive Cape Wind Project (Finally) Kicks Into High Gear, is syndicated from Clean Technica and is posted here with permission.

About the Author

Tina Casey Tina Casey specializes in military and corporate sustainability, advanced technology, emerging materials, biofuels, and water and wastewater issues. Tina’s articles are reposted frequently on Reuters, Scientific American, and many other sites. You can also follow her on Twitter @TinaMCasey and Google+.

China Moving To Distributed Solar Over Utility-Scale

by Giles Parkinson.

China solar installation
China currently has around 2GW of distributed solar PV, according to Bloomberg data, but wants to increase this ten-fold to 20GW by the end of 2015.

Originally published on RenewEconomy

China is looking to switch the emphasis of its booming domestic solar market towards the “distributed” market – essentially rooftop and small, local, plants – rather than large, utility-scale solar farms.

China, for several years the largest exporter of solar modules, is widely expected to emerge as the world’s largest consumer of solar modules in 2014. The official target stands at 12GW, although some private forecasters such as Deutsche Bank think this could rise as high as 15GW.

Most major solar manufacturers expect China – along with Japan and the US – to account for most of their growth in coming years. But what’s got them a little worried is a draft proposal that will require two thirds of this growth to be from distributed systems.

The solar companies make higher margins, and bigger profits, from large scale installations, but it seems that the Chinese administration is worried about the potential transmissions issues and costs.

According to a Credit Suisse analyst report quoted in Barron’s, the solar market is also concerned that the central government’s focus on distributed generation, at the potential expense of utility scale projects, may make the ~12 GW target unrealistic if utility scale projects are capped at 4 GW.

“The emphasis on the distributed generation segment may make utility scale project approvals from the central government less obtainable,” the report said. And it noted there were concerns about how quickly the rooftop market could grow, given ambiguity about rooftop ownership, and the fact that new feed in tariffs for distribution generation do not commence until the new year.

However, another report from Nomura Securities says it would  make more economics sense for the government to install distributed systems instead of utility scale projects.

“The policy makes economic sense as retail/commercial tariffs are high in the eastern provinces and thus the policy’s focus on distributed installations will generate higher economic returns. In addition, lack of land availability will constrain utility scale projects.”

But that may disappoint some of the major manufacturers, who had big plans for utility-scale projects. These include GoldPoly (which had a pipeline of 1~3GW of large scale projects), Shunfeng (3GW), Hareon Solar (1~3GW), GCL (1GW), Jinko Solar (~300MW), JA Solar (~300MW), Trina Solar (500~800MW), and Yingli Solar (500~800MW). It is thought at 6-7GW of projects are already in development. Some Chinese solar stocks have taken a hit on the stock market in recent days as a result.

China currently has around 2GW of distributed solar PV, according to Bloomberg data, but wants to increase this ten-fold to 20GW by the end of 2015. That would require around 8GW to be installed in 2014, and another 10GW the following year.

Most of the installations are targeted for the major population and industrial centres around Shanghai, Guangzhou and Beijing.

This article, China Looking Towards Distributed Solar Over Utility-Scale, is syndicated from Clean Technica and is posted here with permission.

About the Author

Giles ParkinsonGiles Parkinson is the founding editor of RenewEconomy.com.au, an Australian-based website that provides news and analysis on cleantech, carbon, and climate issues. Giles is based in Sydney and is watching the (slow, but quickening) transformation of Australia’s energy grid with great interest.

11,000+ support ‘3000MW-by-2030’ Colorado solar plan

by Zachary Shahan.

Colorado Solar
A growing number of Colorado residents want to go solar.

Originally published on Cost of Solar.

A passionate coalition of over 11,000 citizens and 280 businesses are pushing hard for their state, Colorado, to become a true rooftop solar power leader. They are pushing for 1 million solar rooftops, or 3,000 megawatts of solar power capacity, in the state by 2030. Currently, the state’s solar power capacity is equal to 300 megawatts.

According to some estimates, the Colorado solar industry has already brought $1.42 billion and 10,000 full-time jobs to the Colorado. With a ten-fold increase, that could mean $10.42 billion and 100,000 jobs.

How much will solar save you?
Find out in about 60 seconds!

5 Reasons Colorado Should Go For 1 Million Solar Roofs By 2030

We’re a solar-focused website, so we’re obviously quite supportive of the idea that Colorado could and should aim for this 1 million solar rooftop target. But we’re not thoughtlessly for solar power — we promote going solar because it makes sense to do so!

Below are 5 key reasons why the state should get behind this strong citizen and small business push:

1. $10 Billion, 100,000 Jobs

Let’s start with the obvious. Of course, the numbers extrapolated above don’t come out of a thorough study, but it’s clear that a ten-fold increase in solar power development in the state would considerably boost the state’s economy and provide jobs for many more Coloradans. Whatever the billion-dollar total and jobs total would be, homegrown electricity would be a huge win for Colorado.

2. Cleaner Air, Healthier & Happier People

Coal power costs the US about $500 billion a year in health costs alone, according to a study conducted by the former director of the Harvard Medical School. Colorado residents pay their fair share of that at the hospital and through premature death caused by coal pollution. The human suffering is actually incalculable. Asthma, cancer, loss of life, and so on — who wants that? Colorado can quickly move away from this electricity source of the past, and also avoid many of the health and water problems associated with natural gas through strong development of solar power and wind power. This would be a clear win for the beautiful state and its residents.

3. A Clean Climate Conscience

I don’t think people who decide to do nothing to fight global warming actually “get off the hook” for it. Not acting to fight global warming surely wears on their conscience. It’s hard to quantify, but it certainly has an effect on people’s contentment. Avoiding problems is not a good thing, and we know that. With a 3,000-megawatt-by-2030 push, Colorado residents could certainly feel better about themselves in this regard.

4. Citizens & Small Businesses Would Save Money

Aside from the health savings briefly mentioned above, solar equals long-term electricity bill savings. Electricity from rooftop solar power doesn’t compete with wholesale electricity; it competes with retail electricity. Getting electricity from a rooftop solar power system is akin to cutting your electricity use, not akin to selling power on a wholesale electricity market. Solar panel prices have fallen off a cliff in recent years. With solar incentives that correct for the market failures related to pollution from natural gas or coal power plants, rooftop solar is a cost-competitive option for homeowners and business. It also helps that solar power systems generate electricity at times of peak electricity demand, when electricity is the most expensive. Of course, the indirect benefit of all of this for the state as a whole is that people who go solar have more money to spend in the local economy. (Pro tip: check how much you’re projected to save from switching to solar.)

5. Democratization of the Electricity System

Overall, a very decentralized network of power provides actually creates a more secure and reliable grid. It also means that the financial benefits of producing electricity are democratized, spread amongst the populous to a much greater degree, rather than hogged by energy monopolies. A more empowered citizenry and a stronger middle class benefits the state’s economy and culture. It improves morale and residential satisfaction. And, to put it bluntly, it’s simply much more equitable or fair.

Putting power production in the hands of citizens is also proven to make them more energy conscious and energy efficient. There’s no point in wasting energy and money, and there are large economic and environmental benefits to be had from a more energy conscious and energy efficient populous.

Colorado is often seen as a beautiful place to visit and a wonderful place to live. It’s also a leader in a number of respects. Becoming a, if not the, leading solar power state would certainly add to those credentials. It would put Colorado in an even more positive light. It would benefit the the US; it would benefit the world; and it would offer many strong benefits to the people of Colorado. Indeed, it would benefit the citizens of Colorado more than anyone else. A 2030 target of 3,000 MW of solar power capacity, the majority of it being on the roofs of homes and businesses, should be pursued. And Colorado isn’t the only state that should be pursuing it!

How much will solar save you?
Find out in about 60 seconds!

Repost.Us - Republish This Article

This article, 11,000+ Citizens Push For 1 Million Colorado Solar Roofs By 2030, is syndicated from Clean Technica and is posted here with permission.

About the Author

Zachary ShahanZachary Shahan is the director of CleanTechnica, the most popular cleantech-focused website in the world, and Planetsave, a world-leading green and science news site. He has been covering green news of various sorts since 2008, and he has been especially focused on solar energy, electric vehicles, and wind energy for the past four years or so. Aside from his work on CleanTechnica and Planetsave, he’s the Network Manager for their parent organization – Important Media – and he’s the Owner/Founder of Solar Love, EV Obsession, and Bikocity. To connect with Zach on some of your favorite social networks, go to ZacharyShahan.com and click on the relevant links.