Posted on 02/14/2015 6:16:04 AM PST by thackney
Undaunted by the long battle over Keystone XL and current low oil prices, TransCanada Corp. is planning to build another border-crossing pipeline that would ferry North Dakota crude to refineries in Eastern Canada.
TransCanada executives confirmed Friday they have signed contracts with shippers for enough capacity on the proposed 285-mile Upland pipeline to go forward with the project. It would move as many as 70,000 barrels a day of oil away from North Dakota’s Williston Basin, giving producers another alternative to shipping that crude by rail.
“There is no question that production is up in North America, across the board,” said TransCanada CEO Russ Girling, in a conference call to discuss the company’s earnings. “All of that production is moving on rail today, and it wants to get off rail as quickly as possible, and so those producers are talking to TransCanada and other service operators to look for alternatives, to move it off the rails on to a less expensive, more efficient, safer system.”
The project would be subject to regulatory reviews in Canada and the United States — including the same kind of national interest analysis the U.S. State Department is now conducing on TransCanada’s proposed Keystone XL pipeline.
First proposed more than six years ago, Keystone XL has become ensnared in a larger fight over climate change, and it is not known when the State Department will rule on whether the pipeline is in the national interest. In response to a legal challenge by landowners in Nebraska, a judge has issued a temporary injunction blocking TransCanada from invoking eminent domain along Keystone XL’s path through the state.
Keystone XL is largely aimed at giving Alberta oil sands crude a new route to the U.S. Midwest and on to Gulf Coast refineries — though room is reserved on Keystone for some North Dakota supplies.
Related story: House sends Keystone XL bill to Obama
The proposed Upland pipeline, by contrast, would serve U.S. producers.
Girling said he hopes the Upland pipeline won’t encounter the same permitting challenges — an “extraordinarily difficult process” — as Keystone. Typically, it takes about 24 months to permit border-crossing pipelines, Girling said.
I hope (Keystone is) an anomaly in Canada-U.S. trade of energy,” Girling said, “but obviously, the market isn’t waiting for the regulators to catch up with their decisions; they’re moving the oil now. My view is eventually that oil has to move and eventually we will obtain the permits.”
“These are necessary pieces of infrastructure that are required to efficiently move volumes that are being produced today between production locations and markets,” Girling added. “These things have to get completed.”
It is not clear exactly where Upland would enter the United States, though it could be north of Minot, N.D. The pipeline is expected to connect to the proposed 1.1-million-barrel-per-day Energy East pipeline in Moosomin, Saskatchewan.
Even without winning approval to build the northern leg of Keystone XL, TransCanada reported its earnings climbed in the fourth quarter of 2014 to $387 million, thanks to the beginning of oil deliveries on Keystone XL’s southern leg, from Oklahoma to Texas.
TransCanada executives said they would look for ways to optimize Keystone and their other liquids pipelines, including use of drag-reducing agents to boost their flows.
And there are signs the Calgary-based firm will be looking to capitalize on its strong balance sheet and low oil prices to add to its portfolio of pipelines and power plants.
“There are several assets out there in the marketplace that we covet that in certain market cycles are not available to us,” Girling said.
TransCanada has taken advantage of past downturns to nab assets, including Gas Transmission Northwest Corp. in 2004, he noted.
“I do believe that that is a possibility if we see a sustained downturn in commodity prices, there could be really good assets that are freed up and we have…capacity to act on that currently,” Girling said.
To the extent that permitting and construction of Keystone XL is delayed, Girling added, it gives the company more capacity to make those moves “in the short term.”
And....once installed, it will be a simple operational change to have the crude flow in the opposite direction. The O&G industry is likely the most regulated in the history of the US. The O&G industry is thereby the most adept at USING the regulations to their advantage.
Coal industry...take a lesson!
Things are just about full in Cushing, so we’re gonna have to send it north ... :-) ...
I haven’t been over to Cushing yet to look around, although it’s only 50 miles from here. I probably wouldn’t see much except a lit of tanks.
Hard to tell an empty tank from a full tank from the road.
Bring a video enabled drone and post the video....
Ahhh ... that would do it ... :-) ...
I find it interesting that at least one refiner controls it’s own tank and gets it filled with a custom blend of crude. There must be sample ports on the inlet and outlet pipes and a nearby lab for quick analysis.
What better way to spend a grand and a few Saturdays?
I say drop the XL pipeline and build the 3XL pipeline instead...
... LOL ...
I think I would ask a relative of mine to come along, since he got one of those real good drones last year ... about $1,500 ... and it’s a good one for sure.
Check the placards. On railcars you can tell by the sound of the train rolling by, the direction the train is headed, the placards, or an astute observer will note the state of compression of the coil springs on the trucks. 286,000 pounds of railcar and crude will show itself.
Oh, duh... you are talking storage tanks.
No need for all of that.
Dec. 18, 2013 WSJ
Every week, the U.S. Energy Information Administration, or EIA, releases a survey that includes Cushing storage levels.
“CUSHING, Okla.—A helicopter lifted off recently from an airfield in this remote oil town, scudded low across the flat industrial landscape and trained a heat-sensitive camera at the huge storage tanks below.
Its mission: Gather intelligence for Wall Street.
Genscape is at the vanguard of a growing industry that employs sophisticated surveillance and data-crunching technology to supply traders with nonpublic information about topics including oil supplies, electric-power production, retail traffic and crop yields.
Besides monitoring oil supplies in Cushing, Genscape tracks oil shipments leaving European ports using 800 antenna stations, videotapes railcars of crude oil and follows them to their destinations, calculates the amount of coal burned in the U.S. and western Europe, and even studies crop yields using, among other things, satellite imagery.
Genscape has about 4,000 electromagnetic sensors near transmission lines and power plants around the world. It also uses infrared photos of smoke plumes at power plants to determine if they are producing. Plant operators have no say in the matter because Genscape pays private-property owners to place sensors on their land.
http://www.wsj.com/articles/SB10001424052702303497804579240182187225264
Most refineries will do some blending inside the fence. The lab is in the refinery as well, at least for most average size and above.
Around the Houston area, it has become more common to cover the tops of floating roof tanks with geo-domes. Not able to see levels even from above.
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