Author Topic: KMI - Kinder Morgan  (Read 123809 times)

SharperDingaan

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Re: KMI - Kinder Morgan
« Reply #380 on: April 10, 2018, 07:17:21 AM »
Practical steps:
Fed's guarantee construction costs to build the BC loading facility - all Canada pays.
Fed campaign of 'non confidence' in the BC government; following existing precedent (Quebec). Collapse the coalition.
Targeted political departures; following existing precedent (Quebec).

Politics is a very dirty business, & the locals want to play.
Break some glass.

SD



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RichardGibbons

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Re: KMI - Kinder Morgan
« Reply #382 on: April 10, 2018, 09:42:51 AM »
You can't have small groups, with no legal authority, block decisions made by an elected government.

Yeah, but I think this is reflective of a bigger issue. Recently politicians in North America have been violating social/ethical norms. For instance, gerrymandering in the USA is preventing fair elections and governments are taking huge amounts of cash from special interest groups to promote the views of a minority.  Similarly, in Canada, we've had the government muzzling scientists, promising a KM review and not delivering it, and implementing policies that have allowed housing to become unaffordable to the vast majority of citizens in the two biggest cities.

The government seems to largely believe that it's irrelevant if it violates social/ethical norms, as long as it meets legal requirements. But every time it does so, it is basically saying that the social norms don't matter, without recognizing that in North America, people are more constrained by social/ethical norms than they are by the law (how many people speed or illegally smoke marijuana?). So, when the government disposes of social and ethical constraints, they should expect the people to similarly ignore those constraints, and then you get not just the legal pipeline protests, but the illegal ones as well.

I'm not arguing that people shouldn't respect the law, but rather that governments should recognize that ignoring social/ethical norms has a dangerous far-reaching results that nobody should want, and this Kinder Morgan dispute is one of them.

It is completely bizarre to me that NDP blocks TMX yet wants LNG investment.

The answer to this one is:
  • BC makes will make piles of money from LNG. It makes basically no money from KM, but does take on the risk of an oil spill. So, for BC, there are huge piles of risk, and no reward from KM.
  • A dilbit tanker spill near Vancouver will kill the ocean, cause a spike in cancer in the lower mainland, kill housing prices, and have many other negative effects costing the province billions. An LNG tanker spill will cause smelly air for a day or two until all the NG evaporates.
  • Natural gas creates far less CO2 emissions than mining the tar sands.  Gas still emits CO2, but for moderates who recognize that it's impossible to eliminate all fossil fuel usage overnight, natural gas is an acceptable alternative.

scorpioncapital

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Re: KMI - Kinder Morgan
« Reply #383 on: April 10, 2018, 10:54:56 AM »
I have seen great societies without natural resources, and I have seen nightmare societies with lots of natural resources.


TBW

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Re: KMI - Kinder Morgan
« Reply #384 on: April 10, 2018, 12:00:25 PM »
Richard, I think we would agree on lots of things but I think you are a bit mistaken in some of your assertions about TMX. 

A couple things to remember:

TMX was brought in conjunction with carbon tax, can't forget that.  I think carbon tax is very important and needed.  So I think the deal was pragmatic, we need capital to move away from fossil fuels, in meantime here is a pipeline that will be safer, save $4.1bil per year and we have increasing future carbon taxes (force closure of coal power plants).  While I would very much agree with you on govt and housing issues, in this case the deal appeared to be fair.  Process was lengthy and elected gov't etc, you can protest and make your voice heard but you can't break the law/constitution.

1) BC does benefit directly.  Clark negotiated that TMX pays $996mil to BC over next 20years.  Does not include other benefits jobs, etc.

2) Agree spill would be bad and worse than LNG.  However, there have been no incidents and while probability is increased, it is still low, and ignores risks to crude by rail.  I think crash of house prices as a result is exaggerated (those things will crash without a spill).

3) Not so sure I agree here.  Apples to apples basis natgas has less CO2 emissions.  But we aren't talking about that.  In this case have to build huge LNG plant (lots of Co2), LNG process to transport lots of CO2, and natgas production has had lots of methane emissions (from well, along pipe etc), that if you take into account unfortunately CO2 footprint from natgas can be much worse than it seems.  I could be wrong, but i think TMX is bringing more crude, but its adding to capacity, so not much CO2 from construction.  While it could still be true that LNG produces less CO2, not sure it is as simple as it seems.

Not to totally bash LNG, I do think BC should have at least one plant.  Just giving you some of the other issues I have been considering.


RichardGibbons

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Re: KMI - Kinder Morgan
« Reply #385 on: April 10, 2018, 02:31:27 PM »
TMX was brought in conjunction with carbon tax, can't forget that.  I think carbon tax is very important and needed.  So I think the deal was pragmatic, we need capital to move away from fossil fuels, in meantime here is a pipeline that will be safer, save $4.1bil per year and we have increasing future carbon taxes (force closure of coal power plants). 

I agree that the carbon tax is important, but I'm convinced that most people believe that linking the carbon tax to the pipeline is bogus. It's likely that Keeney will become the premier of Alberta next year, and he has come out multiple times saying that he intends to scrap the carbon tax, well before this pipeline issue began making national news again. If people actually believed that there was a real link between the carbon tax and the pipeline, then I think the debate would be very different.

I'm curious, actually. If Kenney is elected and eliminates the carbon tax, would your reaction be, "then shut down the pipeline"? I suspect that few people will have this reaction (except those who already oppose the pipeline who just want another argument against it).

1) BC does benefit directly.  Clark negotiated that TMX pays $996mil to BC over next 20years.  Does not include other benefits jobs, etc.

I missed this.  However, a present value of less than $350M (35M per year, 8% discount, 20 years) doesn't actually constitute much value. On top of that, gasoline prices to the lower mainland are expected to increase as a result of the new pipeline. BC consumes about 5.7B litres a year of gas. If you assume a 40% of this is in the Lower Mainland, then the estimated 2c increase in gasoline prices costs residents an extra $45M. So, it's somewhere between a wash to a mild economic disincentive for BCers.

2) Agree spill would be bad and worse than LNG.  However, there have been no incidents and while probability is increased, it is still low, and ignores risks to crude by rail.  I think crash of house prices as a result is exaggerated (those things will crash without a spill).

Crude by rail is a straw man. Equivalent quantities of dilbit won't be shipped by rail. We know this because they can already do this, but they aren't. What's more, cleaning up a spill on land is way easier than cleaning up a spill in the ocean. Looking at "no incidents", there have been about 20 oil spills since 2015. I think real estate will fall either way, but I think it will fall harder if the city stinks for a few months, beaches are covered in sludge and dead wildlife, and cancer rates for residents skyrocket for a few decades.  (Personally, I care a bit about a pipeline spill, but a lot about a tanker spill.)

3) Not so sure I agree here.  Apples to apples basis natgas has less CO2 emissions.  But we aren't talking about that.  In this case have to build huge LNG plant (lots of Co2), LNG process to transport lots of CO2, and natgas production has had lots of methane emissions (from well, along pipe etc), that if you take into account unfortunately CO2 footprint from natgas can be much worse than it seems.  I could be wrong, but i think TMX is bringing more crude, but its adding to capacity, so not much CO2 from construction.  While it could still be true that LNG produces less CO2, not sure it is as simple as it seems.

This is an intriguing argument.  I would really like to see the emissions math on this.  I've said elsewhere that I mildly support LNG because of my argument above (net improvement in emissions), but could be convinced either way.  If the LNG has the same emissions profile as tar sands (which themselves are far worse than regular oil), then that would be enough to flip me around to strongly opposing LNG.

TBW

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Re: KMI - Kinder Morgan
« Reply #386 on: April 11, 2018, 03:35:35 AM »
Fair point about Kenney.  If carbon tax was subsequently repealed I would not be happy.  I think the two should remain linked.

My opinion is that TMX will get built.  Both law and economics is on its side.

Cardboard

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Re: KMI - Kinder Morgan
« Reply #387 on: April 11, 2018, 04:07:32 AM »
I had thought that the Vancouver people were better than all of us: greener, smarter, etc.

High gas prices? Traffic jams? What is this all about? You don't all drive EV's over there, share ride and use public transportation?

So is this hypocrisy or self-inflicted?

http://www.parkland.ca/en/investors/news/article?news-id=20171001005041

The Parkland refinery, which interestingly enough is in none other place than Burnaby B.C., produces 55,000 barrels/day from light sweet crude.

So here is a thought. Why doesn't B.C. start right now a project to upgrade (process heavy) and really increase capacity of that refinery?

This would really solve many problems:
1- Lower gasoline prices in Vancouver.
2- Export to the world refined products or higher value add and use best in class refining methods vs what we see in China with their tea pot refineries.
3- Heavy crude would be processed inland and avoid this dilbit spill debate over water.
4- Canada would supply the world with some of the strictest producing methods which help reduce CO2 emissions instead of letting other countries produce oil anyway while they flare natural gas.

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CorpRaider

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Re: KMI - Kinder Morgan
« Reply #388 on: April 11, 2018, 05:00:32 AM »
I never imagined it would be such a hard slog since there is already a pipeline there.  Canada is interesting. 
« Last Edit: April 12, 2018, 06:02:17 AM by CorpRaider »

TBW

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Re: KMI - Kinder Morgan
« Reply #389 on: April 12, 2018, 01:10:57 AM »
Can't say that I am a Morneau fan, but I thought he did a good job laying out the issues here:

https://www.bnn.ca/video/morneau-government-will-use-all-tools-available-to-get-pipeline-built~1368633