Oil Sands Pipeline Moves Closer to Approval, But Will it Save You Money at the Pump?

August 29, 2011

The U.S. State Department has released an environmental assessment declaring “limited adverse environmental impacts” associated with a proposed extension of the Keystone oil sands pipeline—which would transport as much as 900,000 barrels of oil per day from Alberta, Canada, to United States Gulf Coast. Environmentalists have taken news of the report as a sign that the Obama administration plans to back the Keystone XL project, which has galvanized protests outside of the White House calling for it to be blocked.

In a 2010 paper, the Natural Resources Defense Council claims that extending the pipeline is “not in the national interest of the United States,” citing the increased environmental harms of extracting gasoline from tar sands and the overriding interest in decreasing national demand for petroleum. In its analysis, the NRDC says that increased fuel efficiency, a higher reliance on public transportation, and alternative fuels offer more promise in the push end oil dependency and cut greenhouse gas emissions. Those policies, say the group, could reduce gasoline consumption by 2.3 million barrels per day by 2020 and 3 million barrels per day by 2030.

The Obama administration favors a mixed approach to reducing dependence on foreign oil, through expanded domestic petroleum production and increased fuel efficiency standards for vehicles. The White House is yet to officially weigh in on tar sands, but protesters claim that the unspoken policy of the administration has been to expand use of so-called unconventional petroleum resources while avoiding the issue publicly in an attempt to minimize the potential political fallout from such a stance.

Supporters of tar sands extraction point to rising fuel prices and increasing international oil demand as reasons why the 1,700-mile Keystone XL expansion is in the best interest of the United States. But according the the NRDC, tar sands production would not be capable of filling the pipeline’s promised capacity until at least 2025, when petroleum consumption will already have to be cut dramatically to meet the EPA’s proposed 54.5 mpg fuel economy mandate.

Furthermore, the environmental cost of tar sands include 20 to 30 percent higher emissions and the potential for underground contamination from spills. In the first year of the original Keystone pipeline’s operation, there have already been 12 such spills, including one that released as much of 1,000 barrels of oil into the Yellowstone River. Diluted bitumen—as the transportable form of tar sands is often called—is also thought to present special risks to the physical integrity of pipeline.

Regardless of where one comes down on the environmental harms of tar sands, the market justification for their production may not be very strong to begin with—except for the companies extracting and selling them. An increase of 500,000 barrels per day in oil production (which is the production target that supporters of the pipeline say would be possible in the near future,) would have a far smaller effect on international energy prices than, for instance, the recent revolution in Libya, which produces roughly 1.8 million barrels of crude per day. With international demand for oil at more than 80 million barrels per day, an additional 500,000 barrels would have a limited impact on gas prices. Furthermore, the cost of recovering usable petroleum from tar sands is significantly higher than refining conventional crude, which further minimizes its economic benefits to consumers.

For drivers frustrated with high gasoline prices, the best solution doesn’t come from tar sands, offshore drilling or oil exploration in ANWR, but buying more fuel-efficient vehicles.


Posted in Environment, Fuels, News, Oil Dependence
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  • Charles

    Quote 1: “900,000 barrels of oil per day from Alberta, Canada”
    Quote 2: “reducing dependence on foreign oil”

    May I be the first to welcome Alberta as our 51st state.

    I know, I know, at least they say they like us.

    The only way to make a significant impact on our foreign oil imports is through conservation. We simply do not have the resources to drill baby drill our way to energy independence.

  • Max Reid

    We have to accept the fact that Crude Oil is getting scarce.

    From this Tar sands, we get bitumen and the oil refineries mix it with hydrogen to get motor fuels like Gasoline, Diesel & Kerosene.

    Even though it may be dirty, we do need this, otherwise we cannot meet the demand. So in short, we have to use all the sources like drilling, oil sands, bio-fuels, solar, wind, nuclear, natgas, etc.

    Today, the price of London Brent is $112 / barrel and thats the benchmark for 70% of the World’s crude.

    This will also make people realize how dirty the oil is and will start moving to renewable sources.

  • DC

    Q/For drivers frustrated with high gasoline prices, the best solution doesn’t come from tar sands, offshore drilling or oil exploration in ANWR, but buying more fuel-efficient vehicles.

    Sigh, no the best ‘solution’ to high gas prices, is not to drive vehicles-period. Is that so hard to understand? And, yes I know the predicable ‘response’.

    “But I need to drive 80 miles a day to work, or 20 miles in a 6000pound steel and plastic box to get $20.00 worth of groceries”

    Well, too bad, suburbia and big boxes wont be saved with marginally more efficent gas-burners, and you guys made cities that simply cant be salvaged no matter what MPG your government fantasizes amerikan cars will ‘one day’ have. And sorry charles, most of us dont really like you guys all that much, even in alberta, but the Oil industry and there shills sure do, and they tend to talk pretty loud. Besides, NAFTA essentially made Canada an energy colony of the US, and my people dont have the stones to rip that worthless agreementt to shreds. Maybe some day though….

  • James Davis

    I think the solution to the oil and gas problem is electric cars in the country and electric golf carts in the city. While the electric cars and golf carts are parked, solar panels can put a charge back in the battery and when you get home you can fully charge your car. It shouldn’t take long at all to charge a golf cart. Florida is already using golf carts and the seniors love them to run down to the grocery store and back, or out to dinner in the evening. Golf carts are fairly cheap and if each city bought several thousand of them and placed them around the city as “drive your own taxi”, they could make a fortune. -rent your golf cart, take it to your destination – when you are finished, or get off work, rent another one and come back home. That should save billions of barrels of oil a day and the money you save from not having to but gas, you could use to rent your golf cart taxi.

  • Mr. Fusion

    “limited adverse environmental impacts”

    Just look at the picture.

  • AP

    We really don’t need to choose whether to buy the oil from Canada, if they are willing to produce it. If we don’t buy it, China will. Then the oil will be transported by ship across the Pacific, expending much more energy than if it travelled here by pipeline.

    This is a false environmental choice, as far as the US is concerned.

    As far as using electric carts in big cities, I’m sure the trial lawyers in New York would be completely on board with that, especially once the first one gets hit by a taxi. They are not designed for crashworthiness in the least.

  • Shines

    Will it save you money at the pump? This is the problem in America. We want cheap gas so we can drive our herkin’ SUVs and pickups around. Nobody wants to hear this but:
    We could help the environment
    We could improve roads and infrastructure
    We could get more people to buy fuel efficient vehicles
    We could get more people to switch to electric vehicles faster
    We could get off foreign oil faster
    We could pay for our wars in Iraq and Afghanistan
    We could maybe even reduce the national debt
    If we taxed gasoline to the price point that causes enough pain to cause the change. We should have done it years ago.
    Of course it would be a big challenge with today’s economy.
    And of course this would require a politician with the courage and will to do it…

  • Capt. Concernicus

    “For drivers frustrated with high gasoline prices, the best solution doesn’t come from tar sands, offshore drilling or oil exploration in ANWR, but buying more fuel-efficient vehicles.”

    —Well, well, well. Finally someone with the nads to say it. My 2nd gen Prius is averaging exactly 51 MPG. Gas prices in Chicago went up 20 cents in the last 2 weeks. Yeah, it’s painful for most people, but not so much for me. Not that I’m happy that it went up, but this is reality.

  • Max Reid

    When Oil sells for $110 / barrel (Brent Crude), Alberta govt is not a fool to let the American / Chinese companies take their Tar Sands Oil at $ 30 – $40 / barrel. They are going to raise taxes such that it comes to around $ 70 – $80 / barrel.

    Still its better to have a 2 way fight.
    1. Use the Oil in the neighborhood so that OPEC could not apply much influence on us.

    2. Use fuel efficient automobiles to reduce the Oil use.

    Only if we apply both methods, we can control the oil price increase.

    BTW, World’s vehicle population has reached 1 billion. As it skyrockets, the price of Oil will also increase sharply.

  • Max Reid

    Hello Capt. Concernicus.

    My Prius-2007 gives 49 MPG in summer, but in winter, it drops down to 30s / gallon. Do you see any such difference. I am also in Chicago.

  • Capt. Concernicus

    Hey Max,

    I have not noticed that same drop in during the winter. I had reset mine on Nov. 2 last year and let it go until Mar. 21. During that time period I averaged 45.3 MPG. Since Mar. 21 until today the Prius is reading 51.0 MPG. I’m trying to get it as high as possible before I reset it on Sept. 21.

    Maybe you drive your Prius a little harder in the winter than I do. Although I don’t baby it and I don’t hypermile. Since I don’t know your driving style or conditions I can hardly say why there’s such a gap in our winter fuel economy numbers.

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    People should learn how to save energy in order to save more money.

    Robert Benwell

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  • JoeyD12

    This is very great news for car owners and hopefully, it will be approved. I hope that it can help save money for fuel, it will be a great help if something like this came true. merudh patel

  • Alex One

    I don’t know if oil sand is really a long term solution, but I’d guess you are totally right: It’s expensive and once oil prices drop, production becomes ineffective and more expensive than “regular” oil. Mayber it’s time to switch to something without a motor like this here ;)

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  • Farhan

    Oil sands, tar sands or, more technically, bituminous sands, are a type of unconventional petroleum deposit. The oil sands are loose sand or partially consolidated sandstone containing naturally occurring mixtures of sand, clay, and water, saturated with a dense and extremely viscous form of petroleum technically referred to as bitumen.pet post

  • Mark Johnson

    The crude bitumen contained in the Canadian oil sands is described by Canadian authorities as petroleum that exists in the semi-solid or solid phase in natural deposits. Bitumen is a thick, sticky form of hydrocarbon, so heavy and viscous that it will not flow unless heated or diluted with lighter hydrocarbons.dracula discussion

  • Tom Anderson

    The Keystone Pipeline System is a pipeline system to transport synthetic crude oil and diluted bitumen from the Athabasca oil sands region in northeastern Alberta, Canada to multiple destinations in the United States, which include refineries in Illinois, the Cushing oil distribution hub in Oklahoma, and proposed connections to refineries along the Gulf Coast of Texas.2cv raid

  • MR Anderson

    The oil is kept in motion by pump stations along the pipeline, and usually flows at speed of about 1 to 6 metres per second (3.3 to 20 ft/s). Multi-product pipelines are used to transport two or more different products in sequence in the same pipeline. Usually in multi-product pipelines there is no physical separation between the different products. Large Mens Shirts

  • Farhan

    Most of the oil sands of Canada are located in three major deposits in northern Alberta. These are the Athabasca-Wabiskaw oil sands of north northeastern Alberta, the Cold Lake deposits of east northeastern Alberta, and the Peace River deposits of northwestern Alberta.salsa paris

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