Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 10-30-2013, 10:35 AM   #21
Thinks s/he gets paid by the post
2B's Avatar
 
Join Date: Mar 2006
Location: Houston
Posts: 4,330
Quote:
Originally Posted by aja8888 View Post
Pipelines can generally carry different products as long as an interface between the two products is maintained. I would suspect this line is designed to handle any crude product. Routinely, gasoline and diesel are sent through the same line and the interface is pulled off and sold back to refiners as "transmix" product for separation.

Ethanol can't be easily pipelined since it is corrosive and causes leaks in pipeline joints, therefore, it is trucked to distribution terminals for blending (thank you Mr. Government).
This is common practice for many pipelines especially those transporting refined products. This becomes a problem with the low sulfur specs for diesel and gasoline.

Europe has dedicated pipelines for diesel and gasoline which reduces their contamination with other products. This allows the sulfur spec to be 10 ppm in Europe but has the US market struggling with 15 ppm. The product is made to the same <10 ppm spec at the refinery.

We could put dedicated pipelines in the US for these products but it's only money and government permits.
__________________

__________________
The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane -- Marcus Aurelius
2B is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 10-30-2013, 11:00 AM   #22
Thinks s/he gets paid by the post
 
Join Date: May 2008
Posts: 3,419
Quote:
Originally Posted by Lsbcal View Post
I used to think this thing was probably about environmentalists vs oilmen or maybe donkeys vs elephants (so to speak). But this Business Week article seems to indicate it's a lot about different foreign interests (Canada, Mexico, even Venezuela) and domestic US interests. And then there are oil exploration interests vs refiners. Some quotes for this Keystone Pipeline's Gulf Coast Leg Will Soon Be Delivering Oil - Businessweek


Seems a confusing picture to me.
All those oil interests are on the oilmen side of the debate.

There are of course environmental concerns.


My understanding is that these heavier crudes, especially from Canada, depend on the price of oil being at a certain level because of the higher extraction costs.

So while the prospect of lower oil and gas prices is being dangled to push for the approval of the pipeline, the economics won't work if there is indeed greater supply than demand and prices fall drastically.

Also, I had heard that they have to use a lot of energy to get this thick crude extracted, that at the end, you might end up using more energy than you get out of the end product?
__________________

__________________
explanade is offline   Reply With Quote
Old 10-30-2013, 11:07 AM   #23
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2004
Posts: 11,615
Quote:
Originally Posted by explanade View Post
So while the prospect of lower oil and gas prices is being dangled to push for the approval of the pipeline, the economics won't work if there is indeed greater supply than demand and prices fall drastically.
I'll let the investors worry about their investment and whether it makes sense. Personally, I like the idea of having a ready supply of oil that becomes economically viable if prices exceed a certain level (a level that has been seen before). That's a good way of reducing the power of existing producers/cartels.

Quote:
Originally Posted by explanade View Post
Also, I had heard that they have to use a lot of energy to get this thick crude extracted, that at the end, you might end up using more energy than you get out of the end product?
And they make it up on volume? Ridiculous (unless there's a government subsidy involved, ala ethanol).
__________________
"Freedom begins when you tell Mrs. Grundy to go fly a kite." - R. Heinlein
samclem is online now   Reply With Quote
Old 10-30-2013, 11:15 AM   #24
Moderator Emeritus
aja8888's Avatar
 
Join Date: Apr 2011
Location: The Woodlands, TX
Posts: 7,147
Quote:
Originally Posted by explanade View Post
All those oil interests are on the oilmen side of the debate.

There are of course environmental concerns.


My understanding is that these heavier crudes, especially from Canada, depend on the price of oil being at a certain level because of the higher extraction costs.

So while the prospect of lower oil and gas prices is being dangled to push for the approval of the pipeline, the economics won't work if there is indeed greater supply than demand and prices fall drastically.

Also, I had heard that they have to use a lot of energy to get this thick crude extracted, that at the end, you might end up using more energy than you get out of the end product?
Canadian heavy crude is one one part of the equation. Athabasca tar sands extraction and processing is only one supply source. There are a lot of other crude producing companies in Canada that produce much different products.

Also, check the map and you will see that the Bakken shale play is really 2/3 in Canada.

Canada is (or will be) building new refineries and that will aid in them processing more of their own supplies.

The oil business is complicated and very fragmented and understanding the dynamics is very challenging, to say the least.
__________________
......."Everybody has a plan until they get punched in the face." -- philosopher Mike Tyson.
aja8888 is offline   Reply With Quote
Old 10-30-2013, 11:24 AM   #25
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2003
Location: Kansas City
Posts: 7,408
Quote:
Originally Posted by REWahoo View Post
Is there an echo in here?

My point, if you missed it, concerns the fact that some will not be able to resist getting into a political cat fight on this thread.
Right! I watched Frontline on PBS last night on retirement - somehow the producer belatedly semi discovered math, Saint Jack(aka Bogle) index funds, the effect of expenses and there was a dearth of the academic and scholarly data we ex engineers so crave.

Political! Political! You bet - I wanted to scream and throw sometime at the TV.

heh heh heh - oh wait we're taking what? Pipelines? Yawn. Saint's won. Chief's are doing good. Saint Louis is another story.
__________________
unclemick is offline   Reply With Quote
Old 10-30-2013, 11:25 AM   #26
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2006
Posts: 11,017
Or we could export it to Asia.

Why B.C., Alberta are ending their pipeline standoff - Canada - CBC News
__________________
Meadbh is offline   Reply With Quote
Old 10-30-2013, 11:29 AM   #27
Thinks s/he gets paid by the post
2B's Avatar
 
Join Date: Mar 2006
Location: Houston
Posts: 4,330
Quote:
Originally Posted by aja8888 View Post
Canada is (or will be) building new refineries and that will aid in them processing more of their own supplies.
I haven't heard of anything substantial. Everything I've heard about is targeted towards getting the oil into a form it will pump easily.
__________________
The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane -- Marcus Aurelius
2B is offline   Reply With Quote
Old 10-30-2013, 11:33 AM   #28
Thinks s/he gets paid by the post
2B's Avatar
 
Join Date: Mar 2006
Location: Houston
Posts: 4,330
Quote:
Originally Posted by Meadbh View Post
And I can't see why Canada wouldn't do that. China is more than happy to take advantage of the available resources. They are busily buying up South American production now.

If the goal of the US was to increase it's energy security and reduce costs, the Keystone Pipeline would already be in operation. It's safe to say that other factors are in play.
__________________
The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane -- Marcus Aurelius
2B is offline   Reply With Quote
Old 10-30-2013, 11:36 AM   #29
Moderator Emeritus
aja8888's Avatar
 
Join Date: Apr 2011
Location: The Woodlands, TX
Posts: 7,147
Quote:
Originally Posted by Meadbh View Post
When I was working on that project as a consultant to Enbridge in 2007(?), if I remember correctly, the big issue at the time was dealing with Indian tribes and their request for a piece of the pie for allowing the pipeline to cross their lands.

It will be good for the Canadian economy to build/complete that line and create a lot of jobs and revenues for the participants.
__________________
......."Everybody has a plan until they get punched in the face." -- philosopher Mike Tyson.
aja8888 is offline   Reply With Quote
Old 10-30-2013, 11:46 AM   #30
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2006
Posts: 11,017
Quote:
Originally Posted by aja8888 View Post
When I was working on that project as a consultant to Enbridge in 2007(?), if I remember correctly, the big issue at the time was dealing with Indian tribes and their request for a piece of the pie for allowing the pipeline to cross their lands.

It will be good for the Canadian economy to build/complete that line and create a lot of jobs and revenues for the participants.
Yes, provided that environmental safeguards are in place. It's probably safer to transport oil via pipeline than by rail anyhow. But there is a lot of NIMBY to overcome no matter which way it goes.
__________________
Meadbh is offline   Reply With Quote
Old 10-30-2013, 11:52 AM   #31
Moderator Emeritus
aja8888's Avatar
 
Join Date: Apr 2011
Location: The Woodlands, TX
Posts: 7,147
Quote:
Originally Posted by Meadbh View Post
Yes, provided that environmental safeguards are in place. It's probably safer to transport oil via pipeline than by rail anyhow. But there is a lot of NIMBY to overcome no matter which way it goes.
Yes, we were there to conduct an environmental assessment. Canada's environmental laws and requirements differ greatly between provinces. Kind of like state laws here, but overseen by government law.
__________________
......."Everybody has a plan until they get punched in the face." -- philosopher Mike Tyson.
aja8888 is offline   Reply With Quote
Old 10-30-2013, 12:03 PM   #32
Thinks s/he gets paid by the post
 
Join Date: May 2008
Posts: 3,419
Quote:
Originally Posted by samclem View Post

And they make it up on volume? Ridiculous (unless there's a government subsidy involved, ala ethanol).
Well it wouldn't make sense globally but for Canada, it's a lot of money.

Maybe they use natural gas generated electricity and heat to extract, since natural gas is cheaper than oil.
__________________
explanade is offline   Reply With Quote
Old 10-31-2013, 07:15 AM   #33
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
clifp's Avatar
 
Join Date: Oct 2006
Posts: 7,450
Oh cool I love experts*, if any of you want to hazard a guess as to companies that would be winners and loser if the northern portion of the Keystone was built I'd be interested. I also promise to say nothing bad if your predictions turn out badly, and praise your brilliance if they are right.


I'll start
Loser: Berkshire, BRKB Burlington Northern is owned by Buffett and it is a significant source of revenue, hauling oil has been a real profitably business for the railway.

I own the following related stocks are they winners or losers?
Kinder Morgan (KMP) The largest pipeline company is Keystone good bad for them.
Magellan Midstream Partners MMP? operates in the region
Buckeye Partners pipelines BPL are primarily in the midwest and northeast
Crosstex Energy XTXI and Devon (DVN) These two firms are merging lots of pipelines and operations in Texas and Louisiana. Primarily a natural gas distribution and processing.

*Expert anybody who know more than twice as much as I do about a subject.
__________________
clifp is offline   Reply With Quote
Old 10-31-2013, 07:46 AM   #34
Thinks s/he gets paid by the post
 
Join Date: Dec 2009
Location: Alberta/Ontario/ Arizona
Posts: 3,127
Quote:
Originally Posted by 2B View Post
And I can't see why Canada wouldn't do that. China is more than happy to take advantage of the available resources. They are busily buying up South American production now.

If the goal of the US was to increase it's energy security and reduce costs, the Keystone Pipeline would already be in operation. It's safe to say that other factors are in play.
Envireonmentalists and "First Nations" are holding the thing up to ransom. Doubtful at this point even though the rational is obvious.
__________________
Danmar is offline   Reply With Quote
Old 10-31-2013, 08:42 AM   #35
Moderator Emeritus
aja8888's Avatar
 
Join Date: Apr 2011
Location: The Woodlands, TX
Posts: 7,147
Quote:
Originally Posted by clifp View Post
Oh cool I love experts*, if any of you want to hazard a guess as to companies that would be winners and loser if the northern portion of the Keystone was built I'd be interested. I also promise to say nothing bad if your predictions turn out badly, and praise your brilliance if they are right.


I'll start
Loser: Berkshire, BRKB Burlington Northern is owned by Buffett and it is a significant source of revenue, hauling oil has been a real profitably business for the railway.

I own the following related stocks are they winners or losers?
Kinder Morgan (KMP) The largest pipeline company is Keystone good bad for them.
Magellan Midstream Partners MMP? operates in the region
Buckeye Partners pipelines BPL are primarily in the midwest and northeast
Crosstex Energy XTXI and Devon (DVN) These two firms are merging lots of pipelines and operations in Texas and Louisiana. Primarily a natural gas distribution and processing.

*Expert anybody who know more than twice as much as I do about a subject.
I am an engineer and own stocks in my IRA portfolio. Whatever stock I usually buy falls in price immediately so I am not an authority in the game. Although I feel I have a special power over the market and can cause a drop in any stock just by me purchasing it.

However, I do own KMP, EPD and MMP in my IRA and have for years. (Schwab does the K-1 tax reporting for me free within the IRA). Midstream companies that have solid balance sheets and can cover return of capital to unit holders are favorable to own, IMHO. Or, its not your fancy, you can buy one of several EFTs specializing in MLPs, like the Alerian. Or you can buy Kinder Morgan (the company, not the MLP version).

I would caution anyone interested in MLPs to shy away from those that are solely in production of hydrocarbons and not in regulated transportation of liquids and gases. These companies rely on the price of the commodity to support operations and that can fluctuate wildly, and so can their production.

As far as corporations involved in energy development and production, EOG, XOM and CHV are safe bets for the long run. (where's my disclaimer?)
__________________
......."Everybody has a plan until they get punched in the face." -- philosopher Mike Tyson.
aja8888 is offline   Reply With Quote
Old 11-01-2013, 02:10 AM   #36
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Ed_The_Gypsy's Avatar
 
Join Date: Dec 2004
Location: the City of Subdued Excitement
Posts: 5,292
Quote:
Originally Posted by aja8888 View Post
Canada is (or will be) building new refineries and that will aid in them processing more of their own supplies.
I don't think so. There was talk several years ago about building something as simple as an upgrader (which reduces viscosity to be able to pump the bitumen through a pipeline and sell it to refineries), but it cost too much. Some existing facilities are being debottlenecked but no new refineries are in the works. One popular step is for a Canadian producer like Husky to partner with a refiner south of the border. It will be a long time before a new refinery will be built anywhere in North America--if ever (my opinion).
__________________
my bumpersticker:
"I am not in a hurry.
I am retired.
And I don't care how big your truck is."
Ed_The_Gypsy is offline   Reply With Quote
Old 11-01-2013, 02:21 AM   #37
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Ed_The_Gypsy's Avatar
 
Join Date: Dec 2004
Location: the City of Subdued Excitement
Posts: 5,292
Canada will continue to expand bitumen production from the oil sands, no matter what.

They are trying to build a pipeline west to the Pacific so they can sell it to the Chinese but there public resistance to this in British Columbia and I think this unlikely. An existing (natural gas, IIRC) pipeline is being reversed to send bitumen to the East Coast. Bitumen is being transported by rail which is demonstrably more dangerous than a pipeline, but it will continue anyway.

Not approving the XL pipeline will not stop oil from getting to market. It will only prevent the US from benefiting from it.
__________________
my bumpersticker:
"I am not in a hurry.
I am retired.
And I don't care how big your truck is."
Ed_The_Gypsy is offline   Reply With Quote
Old 11-01-2013, 09:06 AM   #38
Moderator Emeritus
aja8888's Avatar
 
Join Date: Apr 2011
Location: The Woodlands, TX
Posts: 7,147
Quote:
Originally Posted by Ed_The_Gypsy View Post
I don't think so. There was talk several years ago about building something as simple as an upgrader (which reduces viscosity to be able to pump the bitumen through a pipeline and sell it to refineries), but it cost too much. Some existing facilities are being debottlenecked but no new refineries are in the works. One popular step is for a Canadian producer like Husky to partner with a refiner south of the border. It will be a long time before a new refinery will be built anywhere in North America--if ever (my opinion).
Our company does work on site selection and permitting for new facilities. No real big (throughput wise) refineries have been built in N.A. many years, but we have been working with several companies on development plans for new refinery complexes. This effort changes from hot to cold from time to time. Right now, the latest interest in permitting and plant completion timelines is for gas to liquids plants and refinery expansions.

Your opinion on it being a long time before a new refinery being built in N.A. is a popular one and the biggest bottlenecks for that happening are obtaining air emissions and other permits and guessing the price of crude and refined products out 5-7 years in the future. The last major refinery built in the U.S. was Marathon's Garyville, Louisiana one in 1977. ARCO built one in Cherry Point, Washington just before that (I worked there briefly). These were 100,000+ BBL units and have been expanded. There were several small (less than 30,000 BBL) refineries built in the U.S. in the last 20 years.

While N.A. seems to be OK with refining capacity (thanks to less refined product demand), at some point in the future, this may change and our need for additional capacity will be there. Not sure how this will be managed, though.
__________________
......."Everybody has a plan until they get punched in the face." -- philosopher Mike Tyson.
aja8888 is offline   Reply With Quote
Old 11-01-2013, 10:00 AM   #39
Full time employment: Posting here.
Redbugdave's Avatar
 
Join Date: Apr 2006
Location: Columbia, SC
Posts: 959
My thinking...building a refinery is maybe a billion dollar enterprise? A long term investment. That's a lot of money, maybe comparable to the electric company building another nuclear reactor for electricity. I think it is wise for the companies to not build more refineries. For them, that keeps profits up. No need for competition when profits can be amicably shared as they seem to do, now.
__________________
"I either want less corruption, or more chance to participate in it." Ashleigh Brilliant
Redbugdave is offline   Reply With Quote
Old 11-01-2013, 11:31 AM   #40
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,382
Quote:
Originally Posted by Ed_The_Gypsy View Post
Not approving the XL pipeline will not stop oil from getting to market. It will only prevent the US from benefiting from it.
True, but this will keep a major and vocal administration constituency happy. And we all know that this is more important.

Ha
__________________

__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 03:53 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.