Keystone no longer economically viable?
Posted by Charles II on November 13, 2014
I wouldn’t let up on the pressure to stop the pipeline and others which carry bitumen, but…Tim Mullaney, CNBC:
As Congress rushes to approve the long-delayed Keystone XL pipeline, it is questionable whether or not the project will make as much of a difference as proponents expect. Since June, crude oil has declined by 28 percent, pushing the price that oil from new wells in Canada may command below what the expected cost will be to produce it.
The so-called “heavy oil” extracted from sand in Alberta, which the proposed pipeline would carry to Nebraska, en route to refineries on the Gulf Coast, will cost between $85 and $110 to produce, depending on which drilling technology is used, according to a report in July by the Canadian Energy Research Institute, a nonprofit whose work is often cited by Keystone proponents. West Texas Intermediate crude oil traded today at $76.67.
The all-of-the-above strategy has brought so much carbon online–and helped to bring solar and wind to commercialization– that heavy oil is no longer cost competitive. It would be really fitting if Keystone were approved and TransCanada folded due to low oil prices. But we need to keep pushing to help that outcome.
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