Posts Tagged ‘Keystone Pipeline’

Keystone XL & Venezuela

Tuesday, November 18th, 2014

Caracas Chronicles (emphasis added):
Keystone XL Isn’t a Threat to the Environment; It’s a Threat to Venezuela

The whole idea that if you stop Keystone XL, somehow less oil is produced and consumed is infantile: the question isn’t “how much?” it’s “where from?” (And if you think exploiting the Orinoco Belt is less environmentally dicey than piping oil through Nebraska, there’s a mountain of coke in Jose I’d like to sell you.)

If the Venezuelan government had the bandwidth to think longer term – which it manifestly doesn’t – it would grasp Keystone XL as a key strategic threat. The main reason anyone would want to take Canadian oil to the Gulf Coast is because that’s where the refineries that can handle crappy, high-sulphur, high-tar content crude are. And the whole reason they’re got built there in the first place is to handle Venezuelan crude. This is why KeystoneXL is such an important piece of the North American Energy Independence puzzle: it’s what it takes to shut Venezuela out of the North American market.

Of course, a government that’s long made it positively a policy goal to shift Venezuelan production away from the U.S. may not be able to register that as a threat. Ideology is always going to prevail with them. But that’s only the umpteenth policy mistake the Venezuelan government made today before breakfast.

Even in a post-Keystone XL future where Venezuela doesn’t have access to North American energy buyers, Venezuela will find buyers for its oil, of course. It’s just that it will have to ship that oil further to get it to refineries that will need to be reconfigured (or built from scratch) to handle it, and each part of that costs money: money Venezuela could use for any of the thousand pressing and growing policy problems going unaddressed right now.

The Communist regime in Venezuela finances itself and its parasites, including Cuba, through oil proceeds, all the more reason to approve KXL.

Linked to by Dustbury. Thank you!

The WaPo: Two newspapers in one!

Friday, March 21st, 2014

Newspaper 1, headline:
The biggest lease holder in Canada’s oil sands isn’t Exxon Mobil or Chevron. It’s the Koch brothers.

Newspaper 2, same article, 5th paragraph:

The link between Koch and Keystone XL is, however, indirect at best. Koch’s oil production in northern Alberta is “negligible,” according to industry sources and quarterly publications of the provincial government. Moreover, Koch has not reserved any space in the Keystone XL pipeline, a process that usually takes place before a pipeline is built. The pipeline also does not run anywhere near Koch’s refining facilities. And TransCanada, owner of the Keystone routes, says Koch is not expected to be one of the pipeline’s customers.

John Hinderaker:

I would add this, from Wikipedia: the Athabasca Oil Sands planned production through 2024. Koch isn’t even on the list. Zero. Nada

But, hey, the WaPo’s sources are the far-left International Forum on Globalization via some guy who was arrested during the anti-WTO demonstrations in Seattle back in November 1999, and the reporter is married to Andrew Light, who writes on climate policy for the Center for American Progress.

I couldn’t make up this stuff if I tried.


A proposed pipeline to transport Canadian crude from oil sands in Alberta to U.S. refining centers could further restrict Venezuela’s access to profitable export markets, according to Tissot Associates.

Washington Post Writers Respond to Powerline’s Criticism

Mexico: Obama arrives for summit

Wednesday, February 19th, 2014

Obama Heads to Mexico Amigos Meeting Strained by Keystone

Canadian Prime Minister Stephen Harper’s frustration with U.S. President Barack Obama’s failure to approve the Keystone XL pipeline may make this installment of the North America summit, known as the “Three Amigos,” the frostiest since the annual meetings began almost a decade ago.

At the one-day meeting tomorrow in Toluca, Mexico, with Mexican President Enrique Pena Nieto and Harper, Obama is bringing an agenda focused on trade, education, border security and stopping drug trafficking. Yet 20 years after the North American Free Trade Agreement took effect, the U.S. and Canada are at loggerheads over a $5.4 billion collaboration that would carry oil south from the thick sands of Alberta to American refineries along the Gulf Coast of Texas and Louisiana.

Hey, Canada has the oil, and will sell it.

Obama arrives in Mexico for summit that may show NAFTA strains

Rather than re-debate NAFTA, Obama is expected to press Mexican President Enrique Pena Nieto and Canadian Prime Minister Stephen Harper to speak with one voice as they negotiate the Trans-Pacific Partnership, a proposed trade bloc that includes 12 countries around the Pacific Rim.

Comment from prior post:

In the 1980′s Reagan had Saudi Arabia increase oil production to drop the price and hurt the USSR’s cash cow. Why can’t we allow Keystone XL to be completed to kill Venezuela’s cash cow? Canadian heavy blend and Venezuelan crudes are all the same type of crude oil which are used by several very major Gulf Coast refineries. Other crude oils cannot economically replace them.


Monday’s North American summit: Just how bad was it?

Wednesday, April 4th, 2012

The North American summit that the US media ignored was a disaster that the foreign media reported: IBD explains how Obama Alienates Canada And Mexico At Three Amigos

Obama’s neglect of our nearest neighbors and biggest trade partners has created deteriorating relations, a sign of a president who’s out of touch with reality. Problems are emerging that aren’t being reported.

Fortunately, the Canadian and Mexican press told the real story.

Energy has become a searing rift between the U.S. and Canada and threatens to leave the U.S. without its top energy supplier.

The Winnipeg Free Press reported that Canadian Prime Minister Stephen Harper warned Obama the U.S. will have to pay market prices for its Canadian oil after Obama’s de facto veto of the Keystone XL pipeline. Canada is preparing to sell its oil to China.

Until now, NAFTA had shielded the U.S. from having to pay global prices for Canadian oil. That’s about to change.

Canada has also all but gone public about something trade watchers have known for a long time: that the U.S. has blocked Canada’s entry to the eight-way free trade agreement known as the Trans-Pacific Partnership, an alliance of the U.S., Australia, New Zealand, Vietnam, Malaysia, Peru, Chile, and Singapore. Both Canada and Mexico want to join and would benefit immensely.

With the media’s “layers of fact-checkers,”

U.S. media dutifully reported Obama’s false claim that Canada, our top trading partner, is too protectionist

But the Canadians know the truth,

Canada’s take was far more blunt: “Our strong sense is that most of the members of the Trans-Pacific Partnership would like to see Canada join,” said Prime Minister Stephen Harper, in essence revealing that it’s the Obama administration alone that is blocking Canada, and suggesting that payback on energy was coming.

Things were even worse, if you read the Mexican press accounts of the meeting.

Excelsior of Mexico City reported that President Felipe Calderon bitterly brought up Operation Fast and Furious, a U.S. government operation that permitted Mexican drug cartels to smuggle thousands of weapons into drug-war-torn Mexico. This blunder has wrought mayhem on Mexico and cost thousands of lives.

The mainstream U.S. press has kept those questions out of the official press conferences, while Obama has feigned ignorance to the Mexicans and hasn’t even apologized.

In short, the summit was a diplomatic disaster for the U.S. and its relations with its neighbors north and south.

It should have been the easiest, most no-brainer diplomatic task Obama faces.

Go read the whole thing, while at the same time keep in mind that Obama diverted the press conference into the issue of Obamacare and the SCOTUS.

And he got his Constitution facts wrong.

Linked by Moe Lane, and Instapundit. Thank you!
Linked by HACER. Thank you!

And now,
Canadian PM Harper: The Price The US Pays For Canadian Oil Is About To Go Up, Up, Up, Thanks To President Ladies’ Tee. AFTER KEYSTONE, WE’D RATHER SELL OIL TO CHINA (h/t Instapundit)

“Smart diplomacy”, folks, “smart diplomacy”…

Canadian vs Venezuelan oil: The Real Importance of Keystone XL

Saturday, March 31st, 2012

This is an email from Kermit Hoffpauir, which I’m sharing with my readers,

The Real Importance of Keystone XL

After constantly reading all of the media coverage regarding the Keystone XL and its importance, there are some very key facts missing.  This pipeline has geopolitical importance and not because it would be carrying just any grade of crude oil, but a heavy crude oil with an API gravity of 20, or less.  Here I would like to address the fact that Canadian Syncrude is a replacement feedstock for refineries producing an important commodity, Venezuela’s crude problems and the cost of converting “regular” refineries into heavy crude process ones.

I had originally written an email describing this and sent to a friend who posted it as an article, on his website here

For those unaware of crude oil and types of refineries and where sources of crude oil are from for them and certain products, I have already proposed that Venezuela is the sole major beneficiary of the blocking of the Keystone XL.  Meanwhile the chattering class is hollering Warren Buffett’s railroad, there is much more to this than that.

First, Keystone XL was to bring HEAVY crude to the Gulf Coast (TX & LA) where 12 refineries use heavy crude as a feedstock.  Primarily this is Venezuelan crude, which is a good bit less expensive and great for producing petroleum coke.  Canadian Syncrude is also a heavy crude, though not as heavy as Venezuelan, and would be a stable supply.  We have imported around 1.2 Million Barrels per Day of this crude in recent years.  Additionally, Hovensa (Hess Oil/PDVSA 50/50 venture) imports a substantial percentage for its refinery in St. Croix, the largest refinery on U.S. soil rated at 500,000 barrel per day crude charge capacity.

Hovensa is shutting down!

That would mean that Venezuela LOSES over 1 Million Barrels per Day of oil exports.  There are very few refineries in the world to utilize its crude as a major feedstock.  It could be used as blending with light crude but not much else.  All the talk about Warren Buffett is a sideshow, and should have nothing to do with the real reason behind Keystone XL.

Petroleum coke technology is a result of squeezing the very bottom of the barrel, into producing more gasoline.  In the late 1970′s a market was developed for fuel grade petroleum coke, and by the early 1980′s the one time nuisance by product, petroleum coke suddenly became profitable.  Almost overnight, Venezuelan crude became desirable for several refineries, located mainly in Texas and Louisiana, which had the ability to cost effectively refine it.  Billions of dollars were poured into these and other regional refineries in upgrades, and export facilities.  By the early 1980′s Lake Charles, LA became the center of the petroleum coke exports for the world, with both the Citgo and Conoco refineries going full bore into producing and exporting, through the newly build state of the art outdoor storage facility connected to the Port of Lake Charles Bulk Terminal No. 1.  By 1982 ships loading from 10,000 to 40,000 tons of this cargo were headed to many part of the world, but in particular to Livorno, Italy for use as a fuel to replace coal in lime kilns for cement manufacturing.  A small West German steel company’s (Otto Wolff) trading division played a key role in this and surpassed the two former leaders, Great Lakes Carbon and International Minerals & Chemicals, in contracts with petcoke producers to supply the new European fuel market.  Heavy crudes are great for producing petroleum coke, not light crudes such as those coming from the new shale oil production or Alaskan North Slope.  The only type of crude equivalent, here in the U.S., is around Bakersfield, CA.

While Houston is NOT a key petroleum coke market (contrary to Newt Gingrich’s claim that it would consume Canadian Syncrude) Lyondell’s refinery there has been a leader in petcoke production and use by building a cogeneration unit with the metalurgy required for the higher btu value, over coal, to use some of its petcoke production.

All of this was BEFORE Venezuela’s state oil company, PDVSA took part ownership position in several refineries in the U.S.

Today, the U.S. is the world giant in petcoke production with over 53,000,000 tons per year being produced annually.  It exports close to 50% of that capacity (8 times the exports of Venezuela).  China has in fact increased its petcoke production capacity to 50% that of the U.S. and imports more from elsewhere.

Since Hugo Chavez came into power, Venezuela’s crude oil production has declined by 35%.  In late 2002 and well into 2003, a large number of management and professional employees of PDVSA went on strike to protest Chavez’s power and policy.  This sent Gulf Coast refiners scrambling for a replacement heavy crude, the declining PEMEX grade of Mayan Crude filled the gap for the several months it was needed.  There is no major source of such a heavy crude outside of Canadian Syncrude.

The capital investment required to refine Canadian Syncrude is nothing to sneeze at.  ConocoPhillips spent $4 Billon on its Wood River, IL refinery in new process units and upgrades.  Marathon spent $2 Billion on its Detroit refinery for the same reason.  ConocoPhillips was lucky that it only had to spend a few hundred million dollars at its Borger, TX refinery and converted a 200,000 bpd pipeline from Cushing to Borger to enable it to handle heavy crude.  Hovensa had spent $8 BILLION in the late 1990′s to enable it to take more Venezuelan crude.  It had successively converted 2 crude units in previous years, into visbreakers, and lowered its overall crude capacity for the the world’s largest at 650,000 bbls per day to approximately 500,000 bpd to capitalize on the lower prices of heavier crudes.

One more thing.  Canadian crude sells for $68 per bbls at terminal of origin in Hardesty.  Venezuelan sells for the same as Brent but with a $5 –10 discount at port of origin loaded aboard ship which makes it above $110 per bbl.

Here is a little more about fuel grade petroleum coke

Who gains from the Keystone cancellation? Venezuela

Tuesday, February 21st, 2012

Mary O’Grady asks,
Keystone XL and National Security
Who gains the most from Obama’s rejection of a new oil pipeline?

the U.S. should be seeking to defund the Chávez machine, and there is no better way to do that than with approval of the Keystone XL. The Alberta crude that will travel through the XL is of a similar quality to Venezuelan oil, and the U.S. could begin buying from Canada instead of from Venezuela if a pipeline were put in place.

There is one thing that Mr. Lugar and Venezuelans who don’t believe that Chávez has an oil weapon agree on, and that is the Venezuelan dictator’s vulnerability. “Divisions in Venezuela’s Russian-armed military, an inflation rate over 30 percent, a dilapidated oil infrastructure, widespread food and energy shortages, and soaring crime rates are all putting heavy pressure on [him],” the senator writes. Losing a customer like the U.S. might just push him over and with him, Iran’s strongest base of support in the hemisphere.

Read the whole thing.


The Carnival of Latin America and the Caribbean

Monday, January 23rd, 2012

Stop trying to intimidate Falklanders, Hague tells Argentina

Video: Argentinian protesters burn Union flag outside UK embassy

Argentines Continue to Eat Less Beef

Bolivia signs anti-drug deal with US and Brazil
Bolivia has signed an agreement with the US and Brazil to help reduce the production of illegal cocaine

Bolivia is the world’s third biggest cocaine producer, and the main supplier to Brazil.

The deal was signed after months of negotiations and repeated delays as Bolivia sought changes to the document.

Bolivian Interior Minister Wilfredo Chavez said Bolivia had insisted on respect for its sovereignty as well as for the traditional consumption of coca leaf, which is used for medicinal and ritual purposes.

Reminds me of one of my relatives, who died of alcoholism, and used to say “it’s for purely medicinal purposes” as he swigged down from a flask.

Fernando Henrique Cardoso on Brazil’s future
More personal security, less inequality

Brazil’s Emerging Market: Crack
Hampered in the U.S., Drug Traffickers Find a Replacement; Skeletal ‘Zombies’ Rule São Paulo’s Cracolândia After Dark

Chilean government puts a stop to bill that would have allowed warrantless access to media archives

Colombia’s Farc rebels destroy radar station
Farc rebels in Colombia have destroyed a radar installation, disrupting civil aviation in the south and west of the country, the government says

Maritza Peregrino, widow of slain Cuban prisoner of conscience, being harassed by Castro State Security to stay quiet

Cigars and Law Schools in Havana

Gov. Cuomo’s ex wife Kerry Kennedy in $40 million anti-oil deal

Guatemala’s new president
Quick march
A former general must move fast to meet expectations

The Loneliness of the Guyanas

In Haiti, former dictator ‘Baby Doc’ Duvalier is thriving

Honduras named murder capital of the world
An unholy alliance of cops, crooks, prisoners and politicians has turned the nation into a shooting gallery.

Most violent city in the world award goes to …

Mexico’s do-nothing legislature
The siesta congress
Reforms languish while overpaid, underworked lawmakers bicker

Mexico’s drug war
Not so fast
The simmering controversy over Operation Fast and Furious

Mexico’s 2012 vote is vulnerable to narco threat

Two die of A(H1N1) swine flu in Mexico: official

What If: The Greatest Threat – An Al Qaida-Drug Cartel Alliance

Puerto Rico to Boot Dozens of Politicians

Venezuela and international arbitration

Chávez appointment – a slap to Colombia?

Chávez Gets Bluster Back and Reclaims the Spotlight, as if he didn’t have it all along.

Is Leopoldo López Venezuela’s Rick Perry?

Virgin Islands refinery shutdown to hit Venezuela hard
This week’s announced shutdown of a major oil refinery in the Virgin Islands could have major ramifications for the Venezuelan oil company, PDVSA.

Video: Ezra Levant talks about why the Keystone Calamity benefits Venezuela the most , via Babalu and Gerard,

Another Lie, Another Cynical Day For PDVSA’s President Rafael Ramirez

The week’s posts:
Cuba: Building collapse kills 4
Where the coke comes from