THE KEYSTONE XL PIPELINEA study on oil sands in comparison to wind energy

Tom Melburn

Oil Sands Introduction

• Oil sands, also known as tar sands, are geologically unique.• Generally, they contain clay, sand, and water mixed with rich

petroleum deposits.• The largest deposit in the world is located in the Alberta, Canada.

Oil sands have only recently been considered for development due to the increasing price for oil and the technological ability to turn oil sands into useable product.

Oil Sands Resource Map

Oil Sand Extraction

• The oil sand deposits in Canada represent the third most oil reserves in the world. • While surface mining is the most common extraction technique, the in-situ

technique, where water is injected underground to break up deposits, is becoming more prevalent. This makes the mining process very energy and water intensive.

• The Alberta Government estimates that 1,300 square miles of land (about the size of Delaware), is suitable for mining in the Athabasca oil sand region. 1

• Canadian oil sands represent 75% of North American oil reserves and if completely developed, it is estimated that about 178 billion barrels of oil will be produced. 2

*The energy input/output ratio for oil sands is equal to or more than 2/1. 3

Thus, 2 barrels of oil are required to produce 1 barrel of oil from oil sands.

Transportation of

Oil Sands• Once oil sands are mined, they must be transported to a refinery. • This makes them much more energy intensive than conventional oil extraction due to

the mining and transportation processes that incur to produce usable petroleum.• Refining plants are incredibly expensive to build, so oil sands in Canada are thought to

produce more economic profitability if they are transported to refineries in the US.• The nearest refinery is located on the Gulf Coast in Texas.

The Keystone XL Pipeline• It will link the oil sands in Alberta to an oil refinery in Texas.• The proposed pipeline will be 1,073 miles long and travel through

Montana, South Dakota, Nebraska, and Oklahoma. • The 36 inch pipeline will transport 830,000 barrels oil/day.*• The presumed cost of building the pipeline is $7.2 Billion.

The Ogallala Aquifer• The aquifer spans eight states.• Provides drinking water for 2 million people. • Supports the $20 billion dollar agriculture industry.• One of the largest fresh water reserves in the world

and the pipeline will cross directly over the aquifer.“We don’t want, for example, aquifers to be adversely affected.

Folks in Nebraska obviously would be directly impacted.” –President Barack Obama (Think Progress)

November 2, 2011

Community Resistance to the Keystone Pipeline

Residents in Nebraska oppose the pipeline because it crosses over their states aquifer.

Environmentalists oppose the pipeline because of the environmental effects the oil sands produce.

(image) Nov 6, 2011. Ten thousand people surround the White House to protest the construction of the pipeline

November 2011, President Obama postponed the decision to build the pipeline until 2013

Tar Sands Action, a nonprofit, is the most outspoken critic of the Keystone XL Pipeline.

Climate Scientists say exploitation of tar sands would make it implausible to stabilize climate and avoid global climate impacts.

KEYSTONE PIPELINE OVERVIEW The expansion of the Keystone Pipeline will reduce the need

for the United States to depend on the disruptive Middle East for oil resources.

While reducing oil demand, it will create 13,000 jobs for Americans.1

The pipeline would allow for gasoline prices to remain relatively steady.

Canadians would earn roughly $307 billion in profits from the Oil Sands.2

Greenhouse gas emissions in Canada are expected to at least triple from 40 million tons to 140 million tons by 2020 if the oil sands are fully developed.3

The environmental impacts from the keystone pipeline could potentially devastate the Midwestern states that the pipeline travels through.

From mine to car exhaust, oil sands produce three times the pollution of conventional oil production.

WIND ENERGY And how to avoid Canadian oil sands

• How do these resources compare?• Wind energy resources in the US.• Which is most economical for the US?• What to expect from wind?• Which will prevail in the end?

How Oil Sandsand Wind Farms

Compare

Land Usage Wind Farms require less than 1% of the land they are built on, while still allowing for farming and other land usage.

Mining decimates the landscape and releases toxic waste from tailings.

Environmental Effects

Wind provides emission free energy.Oil Sands produce three times the amount of pollution than conventional oil.

National Security

Provides domestic energy input. Oil sands require negotiations with foreign countries for energy.

Economic Impacts

Expensive upfront costs with long term payback of 20-25 years.Provides reliable income for communities and investors.

Low development cost and stable gas prices.

Directs revenues to Big Oil companies and foreign nation with oil reserves.

Wind Resources in the USBased on the resource map of average winds in certain locations, wind turbines only in the Dakota’s and Texas could produce enough energy to power the United States. (currently wind provides 2.3%)

According to the National Renewable Energy Lab, the US has the potential to install over 10,000 GW of onshore wind power at a 30% Capacity Factor.That is 9 times more than current US electricity consumption.

Electricity VS. Fuel

• One 2-Megawatt wind turbine Produces 2,000 kWh of energy per hour.

• One 500-Megawatt wind farm is capable of producing 1.9 Terawatt Hours/yr.

• One barrel of oil is equal to 1,700 kWh of energy.

• One million barrels of oil is equivalent to 1.7 Terawatt Hours.

In order to compare fuels, each must be converted into the equivalence.For this research, I will use the measurement of kWh (Kilowatt Hours) and Terawatt Hours.

Based on these calculations, we would need to build 163-1,000 MW Wind farms in order to produce the same energy equivalence of one years worth of oil.However, if we consider the input/output ratio of 2/1 for oil sands production, wind power would save the energy required to produce each barrel of oil. Therefore, the need to build 163 wind farms would be cut in half if we chose to include the amount of energy required to produce 1 years worth of oil from oil sands.

Electricity usage in the average US home is 12,000 kWh/year One barrel of oil is equal to 42 gallons of gasoline

Economical Considerations of Wind

• Wind resource development requires large amounts of upfront costs. For example, a 500MW wind farm costs between $600 million and $1.5 billion.1 (Depending on grid connection costs)

• Generally, purchase power agreements are made that ensure stable, low cost energy over a period of time ranging from 20-25 year.

• Based on a research study, 2.6 jobs are created for each 1 Megawatt of energy built.2

• Therefore, wind development of 163-1,000 MW wind farms would create 500,000 direct jobs for Americans.

• Transmission lines must be incorporated into the costs for transportation of wind energy. Transmission lines are eligible for federal subsidizations because these improve grid efficiency.

• Rural development of wind energy can allow for communities to invest in their power source.

• Wind energy is intermittent. When the wind does not blow, wind turbines provide 0 energy.

• Energy storage is the only solution to the intermittency problem. Depending on new technological breakthroughs, energy storage could change the way we produce and consume energy.

• Depending on the regulatory atmosphere and whether or not pollution laws are implemented, the cost margin between wind and other conventional resources could be greatly reduced.

• Economically and Technologically, wind would be able to provide 100% of energy in the entire world.

• The main barriers to large scale development of wind are social and political factors.

Wind Power or Oil Sands?The future remains very uncertain for both oil and wind due to the political factors at play concerning climate change and renewable energy technology. However, based on this research and the research done by others, wind energy is a much smarter investment for the United States. If the pipeline is considered too dangerous to develop, my research suggests that the $7.2 Billion allotted for the pipeline could be directed to the development of wind.

This would allow for:• 10-1,000 MW wind farms, based on $6 billion for turbines and $1.2 billion for

transmission costs.• The creation of 26,000 American jobs, twice as many than the Oil Sands.• Saving the 100 Million tons of pollution the Canadian Oil Sands would release.1

AND by displacing current fuel generation, it would offset 20 million tons/year.2

• Cleaner air and cleaner water. • Steady income for residents and investors of wind powered communities.

“There is no need to develop the Keystone XL Pipeline Project as evidence shows it is possible to switch to alternatives in sufficient quantities at reasonable costs using existing technologies.”

-Matthew McCarville Energy Policy Coordinator, Prince Edward Island

BibliographyAlberta’s Oil Sands. Government of Alberta: Department of Energy. Dec. 2007.http://web.archive.org/web/20080227201038/http://www.energy.gov.ab.ca/OilSands/pdfs/osgenbrf.pdf

Canada's Oil Sands - Opportunities and Challenges to 2015: An Update. National Energy Board. June 2006. p. 17. http://www.neb-one.gc.ca/clf-nsi/rnrgynfmtn/nrgyrprt/lsnd/pprtntsndchllngs20152006/pprtntsndchllngs20152006- eng.pdf

Congressional Research Service. Keystone XL Pipeline Project: Key Issues. 29 Aug. 2011. http://big.assets.huffingtonpost.com/R41668.pdf

DOE, EIA. 2009. “U.S. Carbon Dioxide Emissions in 2009: A Retrospective Review”.

Economic and Investment Information. Alberta’s Oil Sands. Government of Alberta. http://www.oilsands.alberta.ca/economicinvestment.html

Johnson, Brad. Video: “Obama is the Keystone XL Decider.” Think Progress. 2 Nov. 2011http://thinkprogress.org/green/2011/11/02/359160/video-obama-is-the-keystone-xl-decider/

Leahy, Stephen. “U.S. Awash in Oil and Lies, Report Charges | More Oil Development Risks Catastrophe.” 2 Sept. 2011. http://stephenleahy.net/tag/tar-sands/

Labor Agreement For Keystone XL Pipeline To Create 13,000 American Jobs. Pipeline News.http://www.pipeline-news.com/feature/labor-agreement-keystone-xl-pipeline-create-13000-american- jobs

McCarville, Matthew. “Keystone XL Pipeline Project versus Sustainable Energy – U.S. and World.” 6 June 2011. http://www.peieconet.org/sitefiles/File/Public_Comments_Keystone_XL_Pipeline_Project_vs_Sustainable_Energy.pdf

Mech, Michelle. “A Comprehensive Guide To The Alberta Oil Sands: Understanding the Environmental and Human Impacts, Export Implications, and Political, Economic, and Industry Influences.” p16-17. May 2011. http://greenparty.ca/files/attachments/a_comprehensive_guide_to_the_alberta_oil_sands_-_may_20111.pdf

Werner, Carol. “Jobs From Renewable Energy and Efficiency. Environmental and Energy Study Institute.” 8 Nov. 2007. www.eesi.org/files/EEREJobsFactSheet_11-8-07_0.pdf