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February 02 2012

20:21

Exporting Emissions: Coal Supplies Heading Overseas, But Pollution Will Hurt Everyone

The coal industry in the United States has found a way to increase their profits, while at the same time avoiding the cumbersome environmental standards in place to protect American citizens from coal emissions – they can just ship their filthy products overseas where regulations are scarce. As coal consumption in the U.S. has fallen in recent years, the dirty energy industry has hardly noticed, thanks to the increased demand from foreign buyers.

While the fact that the U.S. is burning less and less coal is a good thing, shipping the excess coal to foreign countries could more than negate the emissions reductions in the U.S. As Ezra Klein from The Washington Post points out:

The U.S. is burning less and less coal each year, thanks to cheap natural gas and new pollution rules. From a climate perspective, that’s a huge deal — less coal means less carbon. But here’s the catch: if the U.S. just exports its unused coal abroad, the end result could actually be more carbon…

So here’s one possible future: If we’re not going to burn our coal, someone else will. One Tokyo shipping company, Daiichi Chuo Kisen Kaisha, says that U.S. coal exports could double in the next three or four years. In Washington state, coal companies are proposing two large export terminals that would help ship tens of millions of tons of coal from the Powder River Basin to countries like China. That, in turn, could make coal even cheaper in places like China — which might spur the country to build even more coal power plants than its current, already hectic pace. And, since carbon-dioxide heats up the planet no matter where it’s burned, this outcome could cancel out many of the global-warming benefits of the U.S. coal decline. (emphasis added.)

read more

January 23 2012

02:15

American Petroleum Institute's Jack Gerard Fact Checked By Activists During Speech

Guest post by Connor Gibson, cross-posted from Polluterwatch.

Two days ago, President Obama denied the permit for the destructive Keystone XL tar sands pipeline, much to the dismay of Big Oil's top lobbyist and propagandist. Speaking at the National Press Club to an audience dominated by oil, coal and nuclear representatives and lobbyists, American Petroleum Institute (API) president Jack Gerard continued to lash out at President Obama over the pipeline decision. However, activists attending their event fact checked Jack's big oil talking points.

Shortly after asking the president, "what are you thinking?!" a group of activists stood and delivered a call-and-response "fact check" over Gerard's speech — see the full Fact Check video. After the event, PolluterWatch's Connor Gibson approached Jack Gerard on camera and repeatedly asked him how much the American Petroleum Institute (API) is spending on its new "Vote 4 Energy" advertising campaign (which, as Mr. Gerard has absurdly claimed, is "not an advertising campaign"). Jack refused to answer:

Vote 4 Energy, which was mocked by a parody commercial during its public release, is the American Petroleum Institute's newest money dump to pretend that most Americans support politicians who represent Big Oil more than their own constituents. Wrapping its talking points in patriotic rhetoric, API's real intent is to continue getting billions of taxpayer dollars each year to corporations like ExxonMobil, Shell and Chevron, which rank among the most profitable companies in the world


Vote 4 Energy sets the stage for API to push its key priorities—unlimited offshore drilling, including in the Arctic, hydraulic fracturing for gas, pushing the rejected Keystone XL tar sands pipeline, and keeping those massive taxpayer subsidies
 
On E&E TV yesterday, Jack Gerard was asked to address the fact that Keystone XL serves as a tool to export large amounts of Canadian tar sands to foreign markets after pumping it across the US. Rather than being able to echo API's dishonest claims of "energy security" through increased access to Canadian oil, Gerard was forced to acknowledge that Keystone XL could be used to boost foreign exports.
 
Despite a rocky week and an advertising campaign mocked by the spoof Vote 4 Energy commercial, Jack Gerard will continue working to increase Big Oil's influence on our election. Numerous API advertisements are airing across the country and API is holding "Energy Forums" in key states, peddling their energy lies to American voters. What voters should keep in mind is that Big Oil's Vote 4 Energy advertising campaign is really about a Vote 4 Big Oil.

 

Guest post by Connor Gibson, cross-posted from Polluterwatch

November 09 2011

14:00

Valero Positioning To Export Tar Sands Oil, Guarding Pot of Gold at End of Keystone XL Pipeline

In the heated Keystone XL debate, the Canadian company TransCanada, which is attempting to build the line, and the Koch brothers, who are throwing their considerable weight behind it in the interest of their Koch Industries’ subsidiaries, receive a lot of attention.
 

But there are other benefactors that are worth a closer look, as nobody stands to benefit as much in the longer term (if the Keystone XL pipeline is ever built) as the companies that operate the refineries on the Gulf Coast.

Let’s step back and review what the refineries actually do. The diluted tar sands bitumen (or “DilBit”) that would flow through Keystone XL is an ultra-acidic, highly viscous mess, that doesn’t at all resemble the refined petroleum products like diesel or gasoline or even jet fuel that are sold on the commercial markets. DilBit is, in the words of Keith Schneider, ”thick as peanut butter and more acidic, highly corrosive, and abrasive” than typical crude.

This tar sands DilBit needs to be refined before it can be sold. But only certain refineries are capable of handling the corrosive DilBit.

Refiners along the Texas Gulf Coast, where the Keystone XL pipeline would ultimately deliver tar sands DilBit from Canada, are eager to accomodate. The company that appears positioned to receive and refine more of TransCanada’s crude than anyone else is the Valero Energy Corporation (NYSE: VLO).

Valero "Dedicated" To Keystone XL - And Ready To Profit From It
Valero is the world’s largest independent refiner, with 15 refineries that have a collective capacity to process 2.9 million barrels per day. While their commitments to TransCanada are confidential, Valero is publicly “dedicated” to the Keystone XL project, and their 310,000 barrels per day Port Arthur, Texas refinery would receive the Alberta-born crude. Valero has invested heavily to upgrade the Port Arthur plant to handle “heavy” “sour” crude (a.k.a. tar sands DilBit) for the past few years, anticipating the pipeline’s completion.

The company has long hoped for a steady supply of Alberta’s tar sands crude, first signing on to Keystone in July of 2008. In 2010, when the Texas company was pouring money into California’s Prop 23 battle, spokesperson Bill Day urged that Alberta is “a tremendous potential supplier for us.”  

While their involvement with Keystone XL has largely flown under the radar, Valero was exposed in the bombshell “Exporting Energy Security: Keystone XL Exposed” (PDF) report by Oil Change International in September. The report found that, despite constant claims by TransCanada and other Keystone supporters of increased “energy security,” much of the crude that flows through Keystone XL would be exported. Valero was held up as a prime example of how and why. From that report:

Valero, the top beneficiary of the Keystone XL pipeline, has recently explicitly detailed an export strategy to its investors.  The nation’s top refiner has locked in at least 20 percent of the pipeline’s capacity, and, because its refinery in Port Arthur is within a Foreign Trade Zone, the company will accomplish its export strategy tax free.


Shell’s subsidiary Motiva and Total, both “shippers” with long-term contracts with TransCanada, also operate in this Foreign Trade Zone, meaning that they are exempt from customs duties on imports and exports, and also from state and local taxes.

In other words: they can sell the Keystone XL crude overseas without paying American taxes. Combine that with the fact that the Port Arthur plants are conditioned to take low-grade tar sands crude and refine it to diesel—which has much higher demand overseas— and the incentive for Valero to export the Keystone XL crude is huge.

The Oil Change International report caused quite the stir, and put Valero on the defensive. Company spokesperson Bill Day told Platts EnergyWeek that "the vast majority of products that Valero makes in the US are sold in the US…As far as I know, we've never said anything about exporting products to China, nor do we have plans to.”

On China, Day was referring to a statement by Sierra Club president Michael Brune, which was technically inaccurate. Despite Brune’s error, Valero’s overall export strategy is clear and obvious to anyone who takes the time to read their September report to investors.

Here are two telling slides.

This map shows clearly the company’s strategy to export diesel from the Gulf Coast refineries (like Port Arthur) to European, Mexican, and South American markets, while importing gasoline from overseas.




And here is a slide showing explicitly Valero’s plans to export diesel to the strong European market.

Finally, here's their slide on the Port Arthur plant, which is ready "to process over 150,000 barrels/day of high-acid, heavy sour Canadian crude," and which produces "high-quality diesel and jet fuel for growing global demand for middle distillates, and is "located at large, Gulf Coast refinery to leverage existing operations and export logistics." (Emphasis mine.)

If there's any doubt that Valero intends on exporting the tar sands crude that Keystone XL delivers, this investor presentation should put that to rest.

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