tar sands

Fri, 2014-06-20 10:25Steve Horn
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Heather Zichal, Former Obama Energy Aide, Named to Board of Fracked Gas Exports Giant Cheniere

Heather Zichal, former Obama White House Deputy Assistant to the President for Energy and Climate Change, may soon walk out of the government-industry revolving door to become a member of the board of directors for fracked gas exports giant Cheniere, who nominated her to serve on the board. 

The announcement, made through Cheniere's U.S. Securities and Exchange Commission Form 8-K and its Schedule 14A, comes just as a major class-action lawsuit was filed against the board of the company by stockholders.

In reaction to the lawsuit, Cheniere has delayed its annual meeting. At that meeting, the company's stockholders will vote on the Zichal nomination.

The class-action lawsuit was filed by plaintiff and stockholder James B. Jones, who alleges the board gave stock awards to CEO Charif Souki in defiance of both a stockholders' vote and the company's by-laws. 

Souki — a central character in Gregory Zuckerman's book “The Frackers“ — became the highest paid CEO in the U.S. as a result of the maneuver, raking in $142 million in 2013, $133 million of which came from stock awards.

Cheniere CEO Charif Souki; Photo Credit: Getty Images

Zichal was nominated to join Cheniere's audit committee of the board, and will be paid $180,000 per year for the gig if elected.

Among the audit committee duties: “Prepare and review the audit committee report for inclusion in the proxy statement for the company's annual meeting of stockholders,” which is now set for September 11 after the push-back following the filing of the stockholder class-action lawsuit.

“The audit committee’s responsibility is oversight, and it recognizes that the company’s management is responsible for preparing the company’s financial statements and complying with applicable laws and regulations,” Cheniere's audit committee charter further explains.

Thu, 2014-06-19 09:57Steve Horn
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Silent Coup: How Enbridge is Quietly Cloning the Keystone XL Tar Sands Pipeline

While the debate over the TransCanada Keystone XL tar sands pipeline has raged on for over half a decade, pipeline giant Enbridge has quietly cloned its own Keystone XL in the U.S and Canada. 

It comes in the form of the combination of Enbridge's Alberta Clipper (Line 67), Flanagan South and Seaway Twin pipelines.

The pipeline system does what Keystone XL and the Keystone Pipeline System at large is designed to do: ship hundreds of thousands of barrels per day of Alberta's tar sands diluted bitumen (“dilbit”) to both Gulf Coast refineries in Port Arthur, Texas, and the global export market.

Alberta Clipper and Line 67 expansion

Alberta Clipper was approved by President Barack Obama and the U.S. State Department (legally required because it is a border-crossing pipeline like Keystone XL) in August 2009 during congressional recess. Clipper runs from Alberta to Superior, Wis.

Map Credit: U.S. Department of State

Initially slated to carry 450,000 barrels per day of dilbit to market, Enbridge now seeks an expansion permit from the State Department to carry up to 570,000 barrels per day, with a designed capacity of 800,000 barrels per day. It has dubbed the expansion Line 67.

As reported on previously by DeSmogBlog, Line 67 is the key connecter pipeline to Line 6A, which feeds into the BP Whiting refinery located near Chicago, Ill., in Whiting, Ind. BP Whiting — the largest in-land refinery in the U.S. — was recently retooled to refine larger amounts of tar sands under the Whiting Refinery Modernization Project.

Tue, 2014-06-17 07:28Ben Jervey
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Tar Sands on the Tracks: Railbit, Dilbit and U.S. Export Terminals

Last December, the first full train carrying tar sands crude left the Canexus Bruderheim terminal outside of Edmonton, Alberta, bound for an unloading terminal somewhere in the United States.

Canadian heavy crude, as the tar sands is labeled for market purposes, had ridden the rails in very limited capacity in years previous — loaded into tank cars and bundled with other products as part of so-called “manifest” shipments. But to the best of industry analysts’ knowledge, never before had a full 100-plus car train (called a “unit train”) been shipped entirely full of tar sands crude.

Because unit trains travel more quickly, carry higher volumes of crude and cost the shipper less per barrel to operate than the manifest alternative, this first shipment from the Canexus Bruderheim terminal signaled the start of yet another crude-by-rail era — an echo of the sudden rise of oil train transport ushered in by the Bakken boom, on a much smaller scale (for now).

This overall spike in North American crude-by-rail over the past few years has been well documented, and last month Oil Change International released a comprehensive report about the trend. As explained in Runaway Train: The Reckless Expansion of Crude-by-Rail in North America (and in past coverage in DeSmogBlog), much of the oil train growth has been driven by the Bakken shale oil boom. Without sufficient pipeline capacity in the area, drillers have been loading up much more versatile trains to cart the light, sweet tight crude to refineries in the Gulf, and on both coasts.

Sat, 2014-06-14 12:35Guest
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Why Are Pipeline Spills Good For the Economy?

oil spill

This is a guest post by David Suzuki.

Energy giant Kinder Morgan was recently called insensitive for pointing out that “Pipeline spills can have both positive and negative effects on local and regional economies, both in the short- and long-term.” The company wants to triple its shipping capacity from the Alberta tar sands to Burnaby, in part by twinning its current pipeline. Its National Energy Board submission states, “Spill response and cleanup creates business and employment opportunities for affected communities, regions, and cleanup service providers.”

It may seem insensitive, but it’s true. And that’s the problem. Destroying the environment is bad for the planet and all the life it supports, including us. But it’s often good for business. The 2010 BP oil spill in the Gulf of Mexico added billions to the U.S. gross domestic product! Even if a spill never occurred (a big “if”, considering the records of Kinder Morgan and other pipeline companies), increasing capacity from 300,000 to 890,000 barrels a day would go hand-in-hand with rapid tar sands expansion and more wasteful, destructive burning of fossil fuels — as would approval of Enbridge Northern Gateway and other pipeline projects, as well as increased oil shipments by rail.

Thu, 2014-06-05 10:55Steve Horn
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Navy SEAL Commander Behind Bin Laden Killing: Keystone XL Vulnerable To Terrorism

Dave Cooper, Command Master Chief SEAL (Retired) for the Naval Special Warfare Development Group (DEVGRU), has authored a threat assessment concluding TransCanada's Keystone XL tar sands pipeline is potentially at-risk of a terrorism attack. 

In the report, Cooper concluded operational security vulnerabilities for the pipeline have been overlooked by the U.S. government. Cooper —  most famous for overseeing the Abbottabad, Pakistan Osama Bin Laden raid as the commander of Navy SEAL Team Six — wrote the report as a consultant for billionaire Tom Steyer's advocacy group NextGen Climate Action

“The very nature of Keystone XL’s newsworthiness, should it ever be built, increases its attractiveness as a target to terrorists: Keystone XL, aside from being a 'soft' target just like any other pipeline, has a built-in emotional impact that can’t be denied or wished away,” he wrote in the report's introduction.

“That simple fact, a newsworthy proposal that engenders strong passions, should clue in pipeline owners and government officials to the very real possibility of intentional attack.”

For the report, Cooper utilized a “red cell” methodology, parlance for U.S. special operations forces performing pre-mission reconnaissance, using open source data readily available to terrorists on the internet. In so doing, the special operations forces snuff out operational security (“OpSec” in military lingo) weaknesses, which they use as actionable intelligence in defense missions.

In the report, Cooper explained he “designed [the methodology this way] to showcase weaknesses in the current reality by exploiting the same information to which an outside terrorist group would have access.”

Cooper's probe included a due diligence trip out three redacted Great Plains locations*, where Phase I of the Keystone Pipeline System is currently operational (the northern leg of Keystone XL is Phase IV). Going out into the field, Cooper came away shocked by his discoveries.

His findings raise a troubling question: have real Keystone XL terrorism threats been ignored, while non-violent activists have been labeled potential eco-terrorists? Cooper offered his take on this question to DeSmogBlog.

Wed, 2014-06-04 05:00Don Lieber
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European Activists Protest First Major Tar Sands Shipment from Canada, Threaten Escalating Actions

Protests erupted in Spain last week at the site of the first major delivery of tar sands crude imported from Canada via the United States.  

According to a news report by EurActiv.com, an online news service focused on EU affairs, 600,000 barrels of Western Canada Select (WCS) crude were due to arrive at the port of Bilbao, Spain, imported by the Spanish oil company Repsol. According to MarineTraffic.com data on the tanker's location, it appears the delivery at Bilbao occurred on 29-30 May.

The Spanish oil giant is using this delivery as ‘a test’ to determine if future bulk deliveries are feasible.   

On 29 May, about 50 protesters staged a demonstration outside Repsol's Bilbao refinery, after rumours spread that the dirty fuel shipment had already arrived.  

The protesters, including local residents and environmentalists from all over Europe, have vowed to increase the scope and organization of the protests if shipments continue.  

Thu, 2014-05-08 08:10Carol Linnitt
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New Report Names Alberta Oilsands as Highest Cost, Highest Risk Investment in Oil Sector

A total of $1.1 trillion USD earmarked for risky carbon-intensive oil sector investments need to be challenged by investors, according to a new report released today by the Carbon Tracker Initiative.

The research identifies oil reserves in the Arctic, oilsands and in deepwater deposits at the high end of the carbon/capital cost curve. Projects in this category “make neither economic nor climate sense” and won’t fit into a carbon-constrained world looking to limit oil-related emissions, Carbon Tracker states in a press release.

The report highlights the high risk of Alberta oilsands investment, noting the reserves “remain the prime candidate for avoiding high cost projects” due to the region’s landlocked position and limited access to market.

The isolated nature of the [oilsands] market with uncertainty over export routes and cost inflation brings risk.”

Mon, 2014-05-05 10:33Steve Horn
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For First Time, TransCanada Says Tar Sands Flowing to Gulf in Keystone XL South

TransCanada admitted for the first time that tar sands oil is now flowing through Keystone XL's southern leg, now rebranded the Gulf Coast Pipeline Project. The company confirmed the pipeline activity in its 2014 quarter one earnings call.

Asked by Argus Media reporter Iris Kuo how much of the current 300,000 to 400,000 barrels per day* of oil flowing from the Cushing, Oklahoma to Port Arthur, Texas pipeline is tar sands (“heavy crude,” in industry lingo), TransCanada CEO Russ Girling confirmed what many had already suspected.

“I don’t have that exact mix, but it does have the ability to take the domestic lights as well as any heavies that find a way down to the Cushing market, so it is a combination of the heavies and the lights,” said Girling. “I just don’t know what the percentage is.”

The Keystone Pipeline System — of which Keystone XL's northern leg is phase four of four phases — is and always has been slated to carry Alberta's tar sands to targeted markets. So the announcement is far from a shocker.


Image Credit: Wikimedia Commons

More perplexing is why it took so long for the company to tell the public that tar sands oil now flows through the half of the pipeline approved via a March 2012 Executive Order by President Barack Obama

Wed, 2014-04-30 21:55Steve Horn
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Explosive Virginia Train Carried Fracked Bakken Oil, Headed to Potential Export Facility

Platts confirmed CSX Corporation's train that exploded in Lynchburg, Virginia was carrying sweet crude obtained via hydraulic fracturing (“fracking”) in North Dakota's Bakken Shale basin. CSX CEO Michael Ward has also confirmed this to Bloomberg.

“Trade sources said the train was carrying Bakken crude from North Dakota and was headed to Plains All American's terminal in Yorktown,” Platts explained. “The Yorktown facility can unload 130,000 b/d of crude and is located on the site of Plains oil product terminal.”

In January, the U.S. Department of Transportation's Pipeline and Hazardous Materials Safety Administration issued a Safety Alert concluding Bakken crude is more flammable than heavier oils. Hence the term “bomb trains.”

At least 50,000 gallons of the oil headed to Yorktown is now missing, according to ABC 13 in Lynchburg. Some of it has spilled into the James River, as previously reported on DeSmogBlog.

A map available on CSX's website displaying the routes for its crude-by-rail trains offers a clear indication of where the train was headed.


Map Credit: CSX Corporation

Formerly a refinery owned by Standard Oil and then BP/Amoco, Plains All American has turned the Yorktown refinery into a mega holding facility. 

Yorktown may become a key future site for crude oil exports if the ban on exports of oil produced domestically in the U.S. is lifted. 

Tue, 2014-04-29 13:14Steve Horn
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TransCanada Charitable Fund Launches Keystone XL "Good Neighbor" Charm Offensive

TransCanada has taken a page out of former U.S. President Franklin Delano Roosevelt's playbook and deployed a public relations “charm offensive” in Texas, home of the southern leg of its Keystone XL tar sands pipeline now known as the Gulf Coast Pipeline Project.

In the 1930s and 1940s, Roosevelt utilized a “good neighbor policy“ — conceptualized today as “soft power” by U.S. foreign policy practitioners — to curry favor in Latin America and win over its public. Recently, TransCanada announced it would do something similar in Texas with its newly formed TransCanada Charitable Fund.

TransCanada has pledged $125,000 to 18 Texas counties over the next four years, funds it channeled through the East Texas Communities Foundation. In February, the company announced the first non-profit recipients of its initial $50,000 grant cycle.  

“The fund is designed to help improve East Texas communities and the lives of their residents through grants to qualifying non-profit organizations in the counties where TransCanada pipeline operations and projects exist,” explained a press release. “All funded projects and programs fall within three charitable categories: community, safety, and the environment.”

TransCanada utilizes the “good neighbor” language in deploying its own public relations pitch.

“At TransCanada, being a good neighbor and contributing to communities is an integral part of our success,” TransCanada's Corey Goulet said in a press release. “The establishment of the fund is another example of our commitment to long-term community investment and our dedication to the people of East Texas.”

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