Seeing the Round Corners

July 3, 2017

The Keystone XL pipeline has been a news headline for many years now. The first application for a cross-border permit was filed with the U. S. State Department in 2008 by TransCanada Corp.

The date, 2008, is a long, long time span in the oil industry. What few people realize is that that pipeline was meant to carry Canadian crude oil and the price of oil in 2008 was more than $130.00 per barrel. Here in 2017, the price of oil is $45.00 a barrel, give or take a few dollars.

A recent article in the Wall Street Journal headlined, “Glut Kills Appetite for Keystone,” has four mind boggling points responsible for the appetite killing of TransCanada’s crude oil pipeline known as Keystone XL:

  • Kinder Morgan Trans Mountain plans to increase capacity to 890,000 barrels a day from 300,000 barrels per day. Estimated completion: 2020.
  • Enbridge Line 3 Replacement line into Enbridge’s existing crude system will restore 760,000 barrels per day of capacity by replacing an older pipeline. Estimated completion: 2019.
  • Trans[c]anada Keystone XL – White House has approved pipeline but company is struggling to line up customers. Estimated completion: 2020-2021.
  • Trans[c]anada Energy East company seeking to convert part of an existing natural gas line to send oil east for export. Estimated completion: 2021.

   According to the Wall Street Journal, TransCanada is having problems getting commitments for “90 percent of Keystone[XL]’s capacity before it proceeds with construction.” There has been a great change in the outlook of refiners toward Canadian crude “with the emergence of American shale drillers.” 

Since 2008 when TransCanada filed its application for a cross-border permit, long-term agreements have fallen “out-of-favor” because of “uncertainty about growth from Canada’s oil sands,” some saying “for space on a pipeline they may not need.”

Also of concern is TransCanada must still gain final approval from the State of Nebraska, and of course, faces the possibility of protests from anti-pipeline protestors.

TransCanada appears to be undeterred, according to the Wall Street Journal, counting on demand from the “Gulf Coast’s demand for Canadian crude oil to replace the decline of oil imports from Venezuela and Mexico.”

In the world of journalism and what garners far too many headlines on fake news, one must ask what is the true story?

While the Wall Street Journal portrays a real uncertainty for the Keystone XL, another pipeline garnerd headlines earlier this year has more positive news.

On June 8, 2017, Bakken Pipeline majority owner Energy Transfer Partners, L.P. announced that the Dakota Access Pipeline is now pumping Bakken crude oil, stating “the Dakota Access Pipeline is now pumping Bakken crude oil,” and “will serve the North Dakota counties of Mountrail, Williams and McKenzie.”

Additional remarks state, the Dakota Pipleine and the Energy Transfer Crude Oil Pipeline from Illinois to the Gulf Coast together make up the $4.8 billion Bakken Pipeline System.” Seeing the Round Corners will revisit the Bakken pipeline in the near future.

In the mean time, please see the “Careful What You Ask For” from this writer’s 2013 archives for the other side of the subject.

CAREFUL WHAT YOU ASK FOR!                           May 13, 2013

It is opinion time so bear with me.

A recent edition of Indian Country magazine carried a political cartoon by Marty Two Bulls targeting the Keystone XL Pipeline (KP). Think before you shoot this one down.

Surrounding a person in full protective hazardous materials gear and equipment, “KEYSTONE PIPELINE:  Providing employment for the next hundred years. Future jobs for your grandchildren created today! Employment of hazardous removal workers is expected to grow 23 percent from 2010 to 2020, faster than the average of all occupations.” (Source:  Bureau of Labor Statistics, U.S. Department of Labor.)

Now, in all the rhetoric on just how grand and glorious the KP XL is, at the head of the list, how many jobs it will create – the solution to the entire unemployment problem in the United States. Yet, where are the solid facts and figures to prove this point, what types of jobs, the construction ones are temporary for pipeliners, a very select segment of the population.

Today’s edition is a prelude to more in-depth columns over on Seeing the Round Corners which begins in June. In the meantime, take note of the following information.

  • May Boeve, executive director of, an environmental advocacy group:  “The tar sands oil that would flow through the KP XL is the dirtiest form of fuel on the planet, and burning it would have a devastating effect on our climate.”
  • In 2007, a journalist reviewing documents filed with the federal Pipeline and Hazardous Materials Safety Administration found TransCanada’s waiver. The waiver, along with other information available in federal agency records revealed that, “TransCanada will be allowed to use a design factor and operating stress level of 80 percent of the steel pipeline’s specified minimum yield strength in rural areas.” (Maximum yield strength refers to a higher pressure-to-strength rating.)
  • Under U.S. regulations, the maximum yield strength in rural areas is 72 percent. Canada’s allowed maximum yield strength?  You guessed it, 80 percent! 
  • A professor at the Balsillilie School of International Affairs in Waterloo, Ontario, Canada, writes in the New York Times:  “. . . Many Canadians want the industry stopped – it is relentlessly twisting our society into something we don’t like. Canada is beginning to exhibit the economic and political characteristics of a petro-state.”

   Mark Twain once said:  “The rule is perfect – in all matters of opinion our adversaries are insane.”

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