Keystone Fiasco: follow the money

02/22/2013 13:12

By: Baden Kudrenecky

 

 

Okay, I spent all day investigating the problem Alberta has with crude oil selling for a huge discount, which is negatively affecting oil sands projects.

 

So, the gist of it all is that the world oil market has two benchmarks, which prices most oil contracts.  There is the world (or tidewater) price, which is called “Brent” and based on North Sea light crude, and there is the Cushing, Oklahoma terminal price, called “West Texas Intermediate” (WTI).  The Albertan Hardisty terminal price has to be additionally discounted to allow for pipeline fees.
The Brent price has been steadily escalating over the past few years, where the WTI has gone down, as the oil is landlocked, with insufficient domestic refining capacity. This has resulted in a 20 dollar spread in the delivery prices, which is probably going to widen, as there is no new refining capacity in the USA, and the supply is steadily increasing from the oil sands and new tight oil production. Basically, pipelines are a magnitude more expensive to ship oil in than on tankers, which are almost free in comparison, so tidewater is where you want to sell your oil.

 

So, what is being done?  The herds are all following increased pipeline capacity to Cushing to relieve an illusionary export problem.  But, the bottleneck IS Cushing where stocks are steadily rising and prices falling.  There seems to be a mindless rush to get the Keystone XL pipeline running to alleviate a glut in Alberta.  The only part of the Keystone project that is sensible and now under construction is the link between Cushing and the Gulf coast, which will help with the current Cushing glut.  The glut itself was exacerbated due to the first Keystone stages supplying Cushing with much more Albertan oil than could be consumed. The cross border XL project will drown Cushing in more oil. One analyst said it’s “the worst place in the world to be selling oil”, and this situation will probably deteriorate in the long term.  The Gulf  refineries cannot process much more oil, and the USA cannot export it, so the bottleneck may only move somewhere else.

 

So, who is benefiting from duping Albertans into building more capacity into Cushing.  The biggest benefactors are the
Midwest USA refineries, who can buy their feedstock at $20/bbl cheaper then their competitors.  Next are the Gulf area refineries who also want some of that cheap canuck oil. And finally are the big pipeline companies who have hoodwinked Albertans into believing that is in their best interests to ship oil 3500 km to the Gulf of Mexico coast for maybe 40/barrel less than the world market price.  In comparison, tidewater on the Pacific coast with world prices is only 1100 km away.

Another proposal (MEC) is to ship oil by train from Alberta to Chicago where it can be transported by barge down the Mississippi River.  This is only a modified version of the foolish pipeline plan, and lacks economic rigour and vision.  First off, Chicago is 2700 km away by rail, where Thunder Bay is 700 km closer.

 

However, this idea leads to the easiest and quickest solution.  Why cannot Alberta oil be transported by train to the Pacific coast?  Each train could haul 100 000 bbl, and the cost would be under $10/bbl.  There are now massive volumes being transported in the USA by train, so many smarter people are making fortunes doing that.  The logistics are simple, and the railways might even be able to start next Tuesday.  This concept is so easy and profitable, it’s a wonder that it still eludes Albertan producers, who continue to be hoodwinked and heisted by the pipelines and USA refiners.

 

http://en.wikipedia.org/wiki/File:Keystone-pipeline-route.png

http://www.econmatters.com/2013/02/goldman-sachs-jeff-currie-continues-to.html

http://www.theguardian.pe.ca/Business/2013-02-07/article-3173033/Report-says-pipeline-squeeze-could-be-devastating-to-Canadian-economy/1

http://www.edmontonjournal.com/business/Bitumen+unit+trains+heading+south+from+Edmonton+reality+producers/7906451/story.html

http://www.prnewswire.com/news-releases/coalspur-and-cn-agree-on-key-supply-chain-terms–logistics-costs-for-vista-project-finalized-183430541.html

http://svmshipping.com/?p=4147

http://www.teamstersrail.ca/TCRC_News_May_14_2009.htm

http://uk.finance.yahoo.com/news/1-u-petroleum-rail-shipments-204719163.html

http://business.financialpost.com/2012/11/06/cn-rail-cp-rail-surging-with-crude-oil-moving-by-trains/?__lsa=b1eb-fb53



Bike rides in France!

08/5/2012 12:56

I finally rode a bike in France. Two bikes, actually. On two different rides during the same day.

Beater Mountain bike with a great name.

First was a delightful early morning ride to the hilltop medieval town called Domme overlooking the Dordogne river. I found a handful of beater bikes in the tool shed behind the garage of our holiday house in Grolejac. All of the bikes were dubious but this one was the best. Note the name on the top tube. Yup. That’s what gave me wings to climb the hill ;-) As I got to the top, the left crank arm started to make an awful sound. By half-way back, it was threatening to come off. Good thing I had the leatherman!

Leatherman to the rescue.

 

I don’t know if the track on Google maps shows the hillclimbing but it was a good pull up to the first ridge.

A second ride was a delightful tour out to a picture ground riding the paved railtrails that are all around this area. Even though I had to trade Jacques Anquetil for an old upright Peugeot with a slipping shifter, it was a fun ride to a riverside picnic ground.

 

 

Two bike rides in one day. Not a bad way to spend a holiday.



Cave art (and lunch in a chateau) in the Dordogne

08/3/2012 7:59

We sure had a real French holiday the past couple of days.

First, we saw real cave art at La Grotte de Cougnac. What a feeling standing only a few feet from these red and black paintings that were actually painted more than 14,000 years ago. These paintings are now among the most extensive of the cave art that you can actually get close to. Most of the others are too small or too delicate to withstand crowds of people breathing on them.

 

Real genuine prehistoric cave paintings

Next morning, we zoomed off to Sarlat-la-Caneda because its weekly market is one of the largest in the Dordogne. Unfortunately, several thousand other people had the same idea to visit the market. We were crawling along in the car for many kilometres just to get into the town and then once we got parked out walked into the market streets, it was a total, claustrophobic crowd-scene. And, to make it worse, there wasn’t really anything there that we hadn’t seen at other, smaller, markets.

After the madhouse of Sarlat we figured we’d head to the next town and look for a quick lunch in a restaurant. Instead, we ended up with this amazing, high-quality lunch in a real chateau.

So far, one of the top two restaurant meals on the trip. Imagine the irony, a gourmet lunch in an old chateau on a day when we couldn’t linger because we had reservations for Lascaux.

Nowadays, when you go see the amazing cave paintings at Lascaux, you don’t really see the cave paintings at Lascaux. You see reproductions in a man-made cave situated about 100 metres below the entrance to Lascaux. That’s because, the real cave paintings started to degrade after about 15 years of a constant stream of visitors. All those humans breathing out their CO2 caused calcite deposits to form of the precious paintings and the real cave had to be closed.

Luckily, in the early 1980′s, after 20 years of work, Lascaux II was opened with two little caves that are exact replicas of the originals and contain exact reproductions of the majority of the paintings (complete with mineral-based dyes that are the same composition as the original “paint”). It was pretty cool.

Famous Cave Art in Lascaux II

So, we saw actual cave paintings, exact reproductions of the most famous cave paintings in the world, and had lunch in a renaissance chateau. A very French holiday.



a week in Paris.

07/28/2012 9:03

I just spent a week in Paris; my 3rd time here although the last time was 19 years ago and the time before that was 32 years ago(!). I always find it surprising that despite the crowds and noise and intensity and heat, I love it this place. There’s something about the practical no nonsense, but respectful, way that Parisiens deal with visitors. That’s a bonus on top of the art and artifacts and history.

I’m always surprised by how much French cultural history relates to us in Canada even though we are nominally descended from the British cultural and political tradition. I wonder if it’s just that in their founding of a liberal democracy back in the 18th century (and again on the 19th century) they developed so many of the principles of democratic citizenry that are our received-truths about democracy, that when I am visiting some of their historical sites I feel like I am drinking in some kind of “eau de source” of democratic culture.

Of course, it doesn’t hurt that the bridges and the river and the trains and the bikes and motorscooters are also all part of what I imagine is the proto-city that Vancouver should aspire to. But that’s another story.



France 2012 – a slideshow from my Flickr feed.

05/30/2012 20:47


Eating and Drinking in San Francisco

08/10/2011 22:00

I finally went to San Francisco. Wow. It’s a cool place. Even only being there for less than four days, I can see that this is a very cool unusual city. Of course, my experience there is far from ordinary.

I stayed in a really nice hotel for a bargain price (courtesy of friends and their hotel-points-plan). We had “happy hour: at a cool bistro and then really nice dinner at a nice restaurant followed by late-night drinks in a dark little bar. The next night, cocktails at a very quiet, dark bar, really nice dinner at a Really nice restaurant. What did we do the night after that? Why, cocktails at a fancy tourist bar followed by a not-quite-so-expensive dinner at a french cafe. That bargain price at the hotel? Well, I guess we spent the savings on food and drink.

Don’t get me wrong, we did lots of walking, sightseeing, and shopping during the (daylight) hours in between but next time I go to San Francisco, I might just have to go a bit further afield.



New Cap

07/21/2011 20:47

I guess I’m going through a phase for cycling caps (aka Biretta). Last Christmas there was my favourite winter cap made by a guy in Vancouver . I wrote about it here. Then I got one in Copenhagen from Cykler Schroeder that I wore during Cycling for Libraries (when it wasn’t raining & cold). Then last week I got another one from the Giro di Burnaby.

Then last weekend at the Vancouver Folk Fest I came upon a booth run by these guys who had a couple dozen charming, nifty, made in Vancouver cycling caps. I bought a nice houndstooth linen one with a racing stripe. Note that these are a completely separate group of cottage-industry cycling-gear makers than the guy who made my winter cap (see above).

And then, just today, Youtube offered to show me, apropos of nothing, this video. It must be fate.



It’s definitely going mainstream

07/18/2011 6:15

I guess, if there was still any lingering doubt, this is enough to convince me that regular urban cycling is going full-on mainstream in this part of the world. Nothing new here in this article, by the way, the interesting to see it in the Globe, nonetheless.



Frances Bula on “car free” Italy

07/11/2011 12:20

Just had to link to this: Frances Bula’s interesting take on car free precincts in the Italian tourist towns (along with the usual interesting-but-all-over-the-map discussion that her site engenders (and much of which I haven’t yet read).



Riding in Berlin

06/28/2011 16:27
Cycle Chic Berlin Alte Schonhauser Allee
Photo by Anne Katrine Harders



I’m going to have trouble properly describing riding in Berlin. Berlin is extremely cool and Berlin bike riders are numerous and of every description. I rode from my hotel on the edge of Kreutzbeg as far south as Freie Universitie Berlin in Dahlem in the southwest and up to Prenzlauer Berg in the northeast: a big chunk of this territory I rode with Hal Loewen. We went fast and tried to learn from the locals. We also learned that motor traffic, while it’s heavy and runs at close quarters, is not threatening. Motorists seem accustomed to operating with bicycles among them and they always leave enough room and yield to bikes when crossing bike lanes.

They have lots of separated bikelanes here but it’s a bit of a trick. Berlin was built with many boulevards with wide sidewalks. To a great extent the bikelanes are simply a 1 metre portion of this sidewalk. This puts bikes into a conflict with pedestrians while leaving cars unimpeded. Well, sometimes it does. Where there are no wide sidewalks available they will certainly paint bike lanes on roads and re-stripe the traffic lanes to accomodate them. In many places, the painted bike lanes turn into separated bikelanes at intersections and there are many cyclist-specific traffic lights. At any rate, it all works to some degree or other. It’s nowhere near as completely thought-out as Copenhagen and our friend Rasmus reminded us regularly that Berlin hadn’t really figured it out yet.

They do, however, have a nifty bike-route finder.


What can we learn from this in Vancouver? I’m not sure I know enough history about the development of riding in Berlin. I don’t know if they, essentially started from a clean slate after the wall came down, for example. However, a dense route network is certainly part of the solution. Berlin, while being extensively built up, is not a compact city and not necessarily a dense city but their cycle route network is quite densely laid out, which means that you don’t usually have to go far from any given location to get onto a route. This is a lesson to offer Vancouver. Another lesson might be that we also have a few grand bouevards. Why, for example, is there no separate bike lane on Pacific Blvd? That street ROW must be 100 ft. wide.



We have a lot of work to do but it’s good to see a large city like Berlin with cycling development and features that we can work towards. One of the problems of constantly using Copenhagen as the ideal cycling city is that it’s development is so far ahead of ours, it’s not easy to always see what steps we should take next. With Berlin, the differences are easier to bridge: with more cycling routes to densify the network and with more separated bikelanes wherever we have right-of-way width, we can start to close the gap.